http://online.wsj.com/article_email/SB10001424052748703657604575004981703096228-lMyQjAxMTAwMDEwNzExNDcyWj.html
http://www.nytimes.com/2010/01/18/business/18drug.html?emc=eta1
The role model at the Harvard Business School (and many other educational institutions) for crisis management is how Johnson & Johnson handled the tragedy surrounding Tylenol in 1982. Now, almost 30 years later, J & J is embarrassed at how it has mishandled a much less serious product problem - and, once again, its Tylenol!
30 years ago seven people died from cyanide poisoning after taking Tylenol for headaches. Without knowing what was causing the deaths, J & J management immediately recalled all Tylenol from all outlets in the U.S. This cost in excess of a billion dollars. Management didn't care. What they cared about was the customer.
While initially, after the problem was diagnosed (a person or persons were injecting the pills with cyanide), Tylenol lost market share when it returned to store shelves, that did not last long. Tylenol roared back to a market share larger than it had before! For those of us who lived thru that time, J & J's action created great admiration and loyalty for the product.
Today's Tylenol issue seems to be associated with a "smell" problem. The "stalling" that went on with recalling/investigating the problem was serious enough that the Food and Drug Administration (FDA) has had to intervene. While the problem first surfaced in 2008, there was no complete investigation or report to the FDA until a year later.
So much for "role models."
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Yeah I heard about this and also immediately flashed back to the cyanide scare and how well J&J had handled it.
ReplyDeleteIt's amazing what a couple decades can do.
Sadly, management turnover is a bigger factor than business schools make it out to be. Sometimes it's generational as in the CEO thought he/she promoted the right person to replace themselves as they retire. Sometimes it's a gradual deterioration of the overall culture that made a company great - that can be do to size (the company grew too fast, got too big), or the regulatory environment (too many lawyers and accountants - not enough customer-centered marketing people), etc.
ReplyDeleteGood point about the management turnover.
ReplyDeleteI attended a presentation by Chris Brogan this week, and he spoke extensively on building relationships as a core competence to your business. It seems to me that this concept of you move to a new company every 2 years and the employee today is going work for 20 (?) companies in their lifetime has led corporations to not foster a relationship with their own employees.
Is your company engaging it's employees, allowing them to step outside their traditional roles and make an impact on the company? Are you fostering future leaders? Build that relationship with your employees, and why not have an average employee tenure that can be measured in decades rather than years? Why shouldn't I want to work for my company for 20+ years?
Of course this issue could work in reverse if your company is in decline - keep the bad employees and bad management and you'll be gone before you know it :)
Marcelo - as always, great points! Turnover can sink a company. Key executive turnover will sink a company!
ReplyDeleteWell said Marcelo! Companies treating the workforce like sheep... its a shame. I'm hopeful that this mindset will turnaround, personally I don't think it is sustainable.
ReplyDelete