The brand premium Johnson & Johnson (J&J) historically earned for Tylenol and its other leading brands will undoubtedly shrink following events of the last two years. Why pay for peace of mind when the quality that created the peace of mind is now in doubt? J&J has long held a reputation as a champion of product safety that put the consumer first, even if it meant compromised profits. The company’s handling of tampering with its McNeil Tylenol brand in 1982 is a case study in crisis public relations. Yet, J&J’s recent history includes enough US Food and Drug Administration repeat visits and citations to cost J&J CEO Bill Weldon much of his 2010 bonus (if not his job this year). With product quality processes in doubt, McNeil and its parent J&J face an even graver set of concerns than those facing Toyota following…
Honesty Advances Business Model Innovation
Milwaukee Brewers owner Mark Attanasio demonstrates one of the most important qualities of a strategic leader – an honest assessment of the status quo. “We know we’ve got a problem, which is starting pitching. We as an organization need to face that reality and address it, as opposed to shrink from it or excuse it. Our offense is so good, if we were just average in pitching, we’d be a contender. We’ve had two seasons now of having a top offense and extremely poor pitching.” Attanasio then admits there is no one coming up through the ranks to solve the problem, suggesting a trade may be necessary. Imagine if someone somewhere in the J&J leadership team spoke up, “Our drive for earnings is leading plant managers to compromise quality to meet earnings expectations. If we don’t address our quality issues, I’m calling the…