30 years later: new steps at J&J, former CEO Burke dies

October 09, 2012

The company that once taught the value of corporate candor in crisis faces new tests today—and commits to reformulate beauty and personal care lines.

Many current retailer and CPG executives weren’t in the industry exactly 30 years ago when Johnson & Johnson CEO James Burke showed the nation what corporate leadership could accomplish. Victimized by (unsolved, to this day) the cyanide tampering of its Tylenol brand that killed and injured consumers, this was a crisis rarely seen in the food and HBC trade.

To save the brand and keep confidence in the company’s reputation, Burke recalled all 31 million packages from distribution—and reissued with safety packaging. He kept open lines to media rather than act secretive or use intermediaries to funnel small doses of information to the public. He became the face of J&J, the company whose brands sat on bathroom counters, medicine chests and babies’ dresser tables across the nation. Now, his face filled living rooms on TV.

There was no Internet then. No social media. No major consumer trends like today for health and wellness that involve food, beverage and HBC products across the store. If the tampering happened today, could Burke—who died on September 28—have brought the brand back from the brink? The Lempert Report thinks yes, his demonstration of corporate responsibility would work again—though it would require new communications skills for a public made skittish by so many product recalls, BPA in packaging, environmental threats, and more.

As it turns out, J&J has faced new ethics questions in recent years—across consumer brands (multiple product recalls), medical devices (safety concerns about its artificial hips), and prescriptions (questionable marketing) divisions.   While an outside force created the Tylenol crisis, J&J’s latest behavioral questions seem both self-imposed and systemic. Analysts attribute recent shortcomings to profit pressures, according to Knowledge@Wharton.  

While J&J works to straighten out those matters, it recently announced it will “phase out or reduce certain ingredients that are safe by scientific standards” because of consumer concerns. The Campaign for Safe Cosmetics, a non-profit coalition, says J&J confirmed to it the company “will reformulate its hundreds of cosmetics and personal care products” in all of its global markets.

Specifically, the Campaign says J&J has committed to:
•    Remove carcinogens 1.4 dioxane and formaldehyde from baby products by the end of 2013.
•    Reduce 1.4 dioxane in adult products to a maximum of 10 parts per million by the end of 2015. It will also phase out formaldehyde-releasers in adult products, limit parabens in adult products, eliminate triclosan from all products, and phase out diethyl phthalate (DEP) from all products.

Lisa Archer, co-founder of the Campaign, called this “a major victory for public health,” and called on other cosmetics giants to “meet or beat J&J’s commitments.”

If J&J is aiming to lead again in corporate responsibility, it has taken good initial steps.  The direction and timing are right to sway a public that has learned lately how easy it is to switch brands and stores.