Every individual and organization will eventually face a crisis of some sort. In most cases only the timing of the crisis should be a surprise. Successfully managing a crisis typically requires a plan documenting the steps to be taken when a crisis occurs. Let’s take a look at a successful example of a crisis response.
In October of 1982, Tylenol was the leading painkiller medicine in the United States. Seven people in Chicago died after taking Tylenol capsules laced with cyanide. Tylenol’s market share dropped from 37% to 7% immediately after the seven deaths.
Johnson & Johnson (maker of Tylenol) took the following actions:
- All capsules were recalled (31 million bottles worth about $100M)
- Capsules were reintroduced with tamper resistant packaging
- Public warnings were made concerning the capsules
- Tylenol promoted caplets that are more resistant to tampering
- Created pricing promotions when the capsules were reintroduced
- Took steps to restore confidence in their product after reintroduction
- Stopped producing capsules 1986 after another death due to tampering
The basis or building block for successful crisis management starts with your organization’s mission, vision, values, and goals. Johnson & Johnson describes their values and goals via their credo that starts with “We believe our first responsibility is to the doctors, nurses and patients, to mothers and fathers and all others who use our products and services.” The third paragraph in their four paragraph credo states “We are responsible to the communities in which we live and work and to the world community as well.” If Johnson & Johnson was going to stay true to their credo, their only choice was to recall a product that had already killed seven people. This is true even though the deaths were caused through no fault of the company.
What were the steps taken that allowed Tylenol to not only survive this crisis, but to actually thrive? First, they had a written plan with specific objectives and actions based on company values (credo). Second, they spoke with one voice. Even though there were internal concerns about the recall, once the decision was made to recall the product everyone got behind the plan. Third, they were open and honest. Share what you know with all stakeholders as early and as often as possible using social media and other communication methods (social media was obviously not available in 1982).
All organizations will eventually deal with significant crisis management issues. Many will stumble because they do not have a plan in place to manage the crisis or goals and values to support the decision making process. If your organization does not have a crisis management plan, make the creation of one a priority!