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Tylenol Case Study

Essay by   •  March 18, 2012  •  Case Study  •  2,464 Words (10 Pages)  •  1,723 Views

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In September of 1982, seven innocent people died due to consuming a poisoned Tylenol capsule that had been laced with cyanide. A national crisis was about to unfold. McNeil Consumer Products was the producer of Tylenol and was owned by the health care industry giant, Johnson & Johnson. James Burke was the chairman of Johnson & Johnson and was responsible for managing the crisis. Never having dealt with anything like this in the past, Burke needed to act swiftly and intelligently to come up with a plan on how to handle the situation. Not knowing what the outcome would be, Burke's decisions would be the vital piece to the project that would eventually lead to Johnson & Johnson overcoming insurmountable obstacles that would continue Tylenol's dominance in the self-medication market.

Case Analysis

According to Kerzner (2006), "Crisis management focuses on the 'unknown unknowns,' which are tragedies without precedent," (p. 488). That is exactly what Burke and Johnson & Johnson were dealing with, unknowns without a model to follow. Extreme project management is a type of project management that deals with vague goals in which the solution is not easily defined (Wysocki, 2009). Burke and some of the other executives at Johnson & Johnson were in fact tasked with the duty of project management. Wysocki (2009) defines a project as a sequence of unique, complex and connected activities that have one goal or purpose and must be completed on time, on budget, and according to specification. The initial strategy Burke came up with was breaking the crisis down into three distinct stages. The first being information gathering, the second being containment of potential damage and the third and final stage was to implement a recovery plan (Kerzner, 2006). These three stages provide evidence that undertaking a project is what Johnson & Johnson was achieving. The second stage could not begin until the all the information was gathered and the final stage was also dependent on successful completion of the prior stage. Thus, connecting these unique and complex activities in a sequence lends to the definition of a project. Once it was established project management was being utilized, the goal needed to be defined. This, however, proved to be difficult because of all of the unknowns that surrounded the initial reports. The original goal was simply, to manage the crisis, a very broad purpose that would be refined as the project progressed. Also indicative of extreme project management is the time that it needs to be completed. Tragedies are sudden, in response, crisis management needs to respond quickly and be resolved promptly and as cost effective as possible while at the very least regaining the original requirements in which it operated in prior.

James Burke's original plan was to have McNeil Consumer Products take this project away from Johnson & Johnson to avoid damaging the entirety of the organization. He appointed David Collins to lead phase one of the project. Collins was a newly appointed member to Johnson & Johnson's twelve-man executive committee and was also serving as the chairman to McNeil (Kerzner, 2006). After nearly twenty-four hours of acquiring information, mostly by communicating with different media outlets, it was decided that the meddling with the pills did not happen at the manufacturing plants. Once the first step reached completion and enough information was gathered, step two could begin. To Burke's dismay, the attention was unavoidably surrounding Johnson & Johnson, and the first change to the plan was incorporated. Originally it was the management of Johnson & Johnson that wanted phase two to contain the potential damage to the realm of McNeil. Burke recognized that this next step was very crucial to the project and he had to change the scope of the project entirely. Burke made several crucial decisions at this point that put the project on a trajectory that may have led to the success of the project. One decision he made was to take over as the project manager. He would now be the spokesperson for this crisis. Another decision he made at this juncture was to bring in all one hundred and fifty sister companies and pull their resources to fight for McNeil and the Tylenol brand name (Kerzner, 2006). Of all the changes he made, the most significant may not have been his choice. He was driven to discuss everything they knew at Johnson & Johnson by the magnitude of the tragic events. Though this decision could have been made for him by the the constant media attention, he took advantage of open channels for communicating and opened up lines through the media straight to the consumers. Ultimately this form of open communication took over as phase two of the project.

The media virtually became a member of the team and built a great working relationship with Burke and other Johnson & Johnson executives. During the first stage, the media served as McNeil's main source of information. In typical project management life cycles, information would be gathered in a more formal setting where the client would request certain conditions (Wysocki, 2009). In this case for Johnson & Johnson, their information gathering was constant and erratic due to the extreme project life cycle coupled with the open lines of communication that were established. What is most troubling about gathering information in this fashion is it did not offer a clear idea of what to do next. What Burke did do, was keep the lines of communication open and offer an open and honest relationship within all their communication networks. Now in the second stage the media was serving as the company's messenger. It was necessary for Burke to reach the public to send a sense of assurance so not to cause any wide spread panic. Before Burke stepped into the spokesman role for the project, the executives at McNeil felt abandon despite the reassurance from Burke that they would have all the resources they would need to handle the crisis. After Johnson & Johnson established themselves in the middle of the predicament, they also began reaching out to all their employees, both past and present to keep them updated with the latest information and plans (Kerzner, 2006). Communication lines also extended to government agencies such as the Federal Bureau of Investigation and the Food and Drug Administration, working in complete cooperation with their investigations. Due to variety of open lines of communication extending to stakeholders, stockholders, media outlets, lending agencies, government agencies and the consumers, Johnson & Johnson had put themselves on a successful path to managing this crisis. Ultimately they put a bunch of their eggs in one basket. They had many man hours invested into the constant

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