Recognizing a Business' Role in Society Helps Build Its Brand

The Tylenol scare. It's been thirty years since someone poisoned Tylenol capsules and eight people died.

Given the panoply of horror stories since then - 9/11, Syria, university and movie theater shootings - the Tylenol murders seem almost quaint. But it was Johnson & Johnson's reaction rather than the actual crime for which they became famous.

What was astonishing was that even in that less interactive, blogosphere-dominated and 24/7 news world, a corporate chief executive chose to voluntarily update the global community, take the medication off retail shelves until it could be vouchsafed and otherwise demonstrated a degree of unprecedented responsibility for the actions of his business.

Which should all make us feel good, but for one thing; J&J's handling of the Tylenol story remains the iconic feel-good public relations story of all time. Can we think of another one? Umm, probably, with some googling and a little time. But nothing else pops quite like that one.

And what does that tell us - about business and about our expectations and about whether the twain shall meet. Because brand is a promise, so it is unalterably wrapped up in a web of expectations and aspirations to meet them. Yet, businesses remain notably reticent to acknowledge their central role in the larger community of voting consumers and consuming voters. When asking why we are met with a welter of ideological and economic arguments having to do with free choice and the proper role of the corporations. But the fact remains that the corporation ceases to exist as a productive entity (forgetting for a moment the uses financial engineering might find for it)if it has no customers who wish to buy.

So, as we contemplate the company's role in society, it is worth remembering that we cant have one without the other. And that to get a little - or a lot - it often makes sense to give a little, as well. JL

Dean Krehmeyer comments in the Washington Post:

The big idea: Business can positively affect how we live through cooperation, innovation and increased trust.
The scenario: Thirty years ago, seven people in the Chicago area died after taking extra-strength Tylenol capsules that had been poisoned with potassium cyanide. Investigators established that at least eight bottles of the Johnson & Johnson product had been taken from store shelves, laced with cyanide and returned to stores. At the time, medicine bottles lacked inner seals or other safety components that enabled consumers to determine whether someone had tampered with the medications.

The sudden deaths caused panic in Illinois and beyond.

Johnson & Johnson’s then-chief executive James E. Burke decided immediately, and without government urging, that the company had to take action. With no way to determine whether other poisoned products were sitting on store shelves, Johnson & Johnson recalled 31 million bottles of Tylenol, which had a combined retail value of more than $100 million. This event remains one of the largest consumer product recalls in history. To this day, the culprit has not been found.

While the recall decision was swift, the foundation of this action had been laid six years earlier during a company-wide initiative that engaged all employees in committing to the company values. Its values statement declares that the company’s first responsibility is to its customers and that the organization must enact good citizenship. This credo provided the leadership and all employees with a framework for making business decisions that have a positive impact on society.

The resolution: Although Tylenol market share dropped from 35 percent to 8 percent after the 1982 recall, it rebounded within a year. Johnson & Johnson innovated a triple-sealed package, which quickly became the industry standard. Additionally, working with Johnson & Johnson and other industry leaders, the Food and Drug Administration developed more stringent product tampering regulations. These guidelines led to the replacement of drug capsules with caplets.

Burke, who died in September, left a lasting legacy. Beyond a seminal event of crisis management, his recall decision provided a blueprint for corporate and public leadership. Many other leading companies have followed his example by viewing society as a partner in creating value and driving innovation.

For instance, recognizing the shared economic interests in preserving and replenishing the world’s freshwater resources, Coca-Cola has conducted hundreds of community water projects in 94 countries.

The telecom company Digicel employs 70,000 people in Haiti. After a devastating earthquake hit the country in 2010, the company partnered with Port-au-Prince’s mayor, Jean Yves Jason, to rebuild the capital city.

The lesson: Understanding the role that business plays in society is a core competency for current and future business leaders. Given the ever-increasing complexity of the global environment, this business in society mind-set must be embedded in the way we operate every day — not just a point of focus when responding to a crisis — if we are to create value for society. Paying attention to social needs spurs innovation. It is “good” business, in every sense of the word.