Johnson & Johnson's response to the 1982 Tylenol cyanide contamination crisis

¶ … Tylenol Crisis

The Case

Chicago, Illinois, was the setting for one of the greatest and most responded to consumer emergencies in the United States. In the fall of 1982, seven people died after taking Extra Strength Tylenol that they had bought over the counter (Science News, 1982). The response was rapid, and Tylenol's parent company, Johnson & Johnson, pulled all Tylenol off the shelves across the country before the eighth death could occur (Ruquet, 2004). An examination of the incident after it was recognized unveiled that someone, still unknown to this day, had tainted the capsules with cyanide.

The reaction from this tragic event was immediate and profound with the United States Food and Drug Administration. Within months, all companies selling any type of cosmetic, over the counter, or medicinal product were required by federal law to include tamper resistant packaging on all products. In addition, they were required to include a statement on the packing stating that any sign of tampering should be considered for contamination (Science News, 1982).

The cost of the crisis was monstrous for Johnson & Johnson. By the end of the year, the cost of pulling products off shelves for destruction was figured at $100 million, with another $50 million of loss figured from lost sales (Edwards, 1999). Overall the total amount of company devaluation was figured to be about $3 billion by the end of the same year. The diversity of the product line of the company allowed it to survive in the long-term, however. In the 2005 fiscal year, Johnson & Johnson reported net earnings of over $10 billion (Johnson & Johnson 2006 Annual Report, 2006).

Grazier's Factors of Motivation

Crisis management requires a solid team to create and implement strategies to drive an organization out of a current situation and an actual clear plan for the prevention of future incidents. Peter Grazier is a professional who helps teams create purpose and cohesion, among many other factors of motivating teams (2005). The reaction to the Tylenol crisis involved several of Grazier's factors of motivation, including the presence of a real purpose and a true challenge.

After the Tylenol contamination process, the management teams at Johnson & Johnson had the advantage of a real purpose. With a true and shared goal to attain, teams have a much better chance to succeed. With each death reported from the contaminated Tylenol, the urgency for not only the entire management team became heightened but also with each individual employee. The crisis created a movement within all levels to resolve the issue, whether to save the bottom line or to save their job.

Another factor of motivation that was present in the crisis management of the Tylenol crisis was a challenge. Although some challenges can be created and presented to increase motivation, the incident of the lethal contaminations was an enormous challenge to deal with immediately as well as continuously. No one had a moment to get bored or to lose focus on the issue since the issue was so grave and immediate. One of the greatest challenges that faced Johnson & Johnson right away was the decision and then implementation of the widespread recall and destruction of any Extra Strength Tylenol on the market.

An excellent organization is much more than a great idea or a great product. The team which manages and creates the opportunities for the ideas are at the core of that success. The ability to motivate teams is essential for the health of the overall organization. The continued success of Johnson & Johnson are a result of the strong team management techniques in practice at that corporation.