Tylenol as a Case Study in How to Address Corporate Crisis

Taylor Hallman is a Franklin Lakes, New Jersey, professional who serves as a business continuation associate with Prudential Financial, in which role he sets in place strategies to ensure viable operations during moments of disruption and crisis. Taylor Hallman of Franklin Lakes has a strong understanding of the leadership qualities that have carried companies through strong headwinds and back to sustained profitability. 

One prominent example of this came in 1982, when seven people died after taking Extra Strength Tylenol to which cyanide had been added. With over-the-counter (OTC) drug safety in question, James E. Burke, then CEO of Tylenol parent company Johnson & Johnson, needed to take quick action. A first step involved the announcement that no further OTC capsules would be sold, as capsules were more susceptible to tampering than solid caplets. 

At the same time, 32 million Tylenol bottles were recalled nationwide, with the expense borne by the company whose products had been targeted. All new products shipped were equipped with a newly developed tamper-resistant, triple-seal packaging system geared toward consumer peace of mind. 

Finally, Burke issued an unequivocal apology and admitted failure in public, with the stated wish that his company had taken action earlier, before the crisis unfolded. These actions resulted in recovery for both Johnson & Johnson and the Tylenol brand, and Burke received recognition as one of Fortune magazine’s 10 greatest CEOs.