Tylenol Crisis Management

I decided to take a look at a classic case study that I went over a few years ago.  On September 29, 1982 Johnson and Johnson had to recall their Extra-Strength Tylenol product from shelves.  The product was recalled off the shelves because it killed seven people because it was tampered with cyanide, which is a highly toxic chemical compound.  They recalled over 31 million Tylenol bottles with no charge and lost millions as a result. While many predicted that Tylenol wouldn't repossess the image it once had, it took them about two months for the company to get back into the market after a horrific incident.  Although they spend millions on recuperating they were able to bounce back and gain a better name for the actions they took to bounce back from this crisis.

It's clearly evident that the five steps in decision making was used in order to resolve issue that they were placed in.  As stated in the text the first step is to Identify what the problem is.  In this case the problem was that the Tylenol medicine was laced with cyanide and in result killed several people.  Step two is to generate and evaluate alternative courses of action.  What Johnson and Johnson did was come up with a plan to recall every piece of Tylenol Extra-Strength that was on the shelf and pull them off the market.  Step three is to decide on a preferred course of action, and in this case Johnson and Johnson decided to go with the recall idea even though it hurt them financially.  The fourth step is to implement the decision.  As stated in the article, about 31million bottles of Tylenol were recalled and the company lost over 100 million in making this decision.  The fifth and final step is to evaluate the results.  Sure Johnson and Johnson did lose millions during the recall, but they did something that was never done before.  At that time items weren't recalled, although many presume they would crumble, it took the company two months to bounce right back.  Their stocks went up and the chairman, James Burke, was commended for how well he was able to manage this tragic event.

After learning about the steps in decision making and reading this Tylenol article about crisis management, it is safe to say that the manager who was managing Tylenol at the time did a fantastic job in abiding by the six rules of crisis management.  He was placed in a very horrendous predicament, and instead of folding under pressure he identified the issue, made a plan, pulled it through and garnished wonderful results.  A perfect example of how crisis management should be handled.





Links
http://www.nytimes.com/2002/03/23/your-money/23iht-mjj_ed3_.html