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Defining Crisis Management

Brian Perkins, WG'80, on the Front Lines of Corporate Responsibility

It was one of the most sensational news stories of the 1980s, placed tremendous pressure on one of the world's most admired companies and became a bellwether case study for business ethicists and public relations professionals alike. It also gave Brian D. Perkins, WG'80, a first-hand glimpse of how a company should deal with a crisis.

In 1982, seven people in the Chicago area died after taking Tylenol^TM, a popular pain-killer manufactured by McNeil Consumer Healthcare, a division of New Brunswick, N.J.-based Johnson & Johnson. The Tylenol had been laced with cyanide, and for weeks it wasn't clear whether the capsules had been tampered with during the manufacturing process or after leaving the factory.

Perkins, who had joined McNeil two years earlier as a product director and was assigned to help manage the Tylenol brand, vividly remembers September 29, the day the news broke. Chicago authorities phoned the company with news of the incident, and at that moment, Perkins says, "the world changed" and McNeil and J&J went into overdrive.

"It was a massive corporate effort from the chairman to the folks in PR to people in security and marketing and sales, and other J&J divisions Ð everybody had a hand in responding to what was a really tragic and terrifying event," says Perkins, who today is worldwide chairman of J&J's Consumer Pharmaceuticals and Nutritionals Group.

Some 31 million bottles of Tylenol, worth $100 million, were recalled. J&J sent 500,000 letters outlining the situation to physicians, hospitals and Tylenol distributors, and set up a toll-free hotline for consumers.

Pundits had a field day, predicting that the Tylenol brand would never recover. Perkins still has a copy of a quote from one advertising executive who opined that consumers would never again see "the name Tylenol in any form. I don't think they can ever sell another product under that name."

Eventually, a massive investigation revealed that the capsules had been sabotaged outside the manufacturing process, though no arrests were ever made.

The brand, of course, did recover, and J&J and its then-chairman, James Burke, were widely lauded for their immediate response to the crisis. J&J also developed tamper-resistant packaging, now broadly used by food and drug product manufacturers, as a result of the incident.

And Perkins learned volumes about corporate responsibility by observing his employer's reaction and response to the case. He cites the company's long-standing credo, which puts the well-being of customers first, followed by employees and the communities J&J serves, as the compass of the Tylenol incident.

"Working for J&J, you don't walk around reading the credo every day, but you do try to live it every day," Perkins says. "I'm convinced that the Tylenol brand and our reputation are better now than before the incident because of the way this case was handled. We tried to do the right thing and the public and the press recognized that."

Since those early, pivotal days of his career, Perkins has steadily risen through J&J's ranks. He was appointed to McNeil's management board in 1989 and promoted to vice president of marketing in 1991 and has managed brands including Motrin, Imodium and Lactaid over the years.

In 1993, he was named president of J&J's Personal Products North America division. He rejoined McNeil in 1994 as president and was promoted to company group chairman of Consumer Pharmaceuticals Worldwide in January 1999. In September of that year, he was named to his current post as well as to a seat on the J&J executive committee.

Perkins spends virtually all of his free time with his wife, Lois, and sons, D.J., 15, and Michael, 11, at their home at the New Jersey shore, where he likes to take his kayak out into the ocean and "get tossed around." He also enjoys coaching his younger son's baseball team and juggles a heavy overseas travel schedule. "Our over-the-counter and nutritionals business is dominated by North America, but we have fairly ambitious goals in Latin America, Europe and Asia," he says.

Since the Tylenol scare, Perkins has visited Wharton and other business schools to lead student discussions on the ethical dilemmas that arise when marketing products. "I'm always amazed at the students' response," he says. "They come in sleepy in the morning and within five minutes they're energized, and I'm surprised how little clock-watching there is."