James E. Burke
Encyclopedia
James E. Burke was the chief executive officer
(CEO) of Johnson & Johnson
from 1976 to 1989, a company for which he worked forty years.
. He earned his BA
at the College of the Holy Cross
in 1947 and his MBA
from the Harvard Business School
in 1949.
would step down as CEO as of November 1, 1976, and be replaced by Burke. As CEO, Burke is credited for the growth of Johnson & Johnson to its current size and prominence, but he is perhaps best known for his crisis management in 1982, when it was found that Tylenol
capsules had been poisoned with cyanide
.
According to a Fortune article, Burke's "defining moment" actually came six years earlier when he challenged his fellow executives to either recommit to the company credo or "tear it off the wall."
Penned by J&J scion and legendary chairman General Robert Wood Johnson II in the 1940s, the credo proclaimed that J&J's "first responsibility" was to its customers and then to employees, management, communities, and stockholders-in that order.
By the mid-1970s, however, Burke was troubled by a sense that the credo had lost its influence in the organization. "When I asked people what they thought of it, I got vague answers," he says. But during a series of "challenge" meetings he arranged, executives debated the credo in the context of the company's history and mission. "It became clear that our value system had been vital to our ability to outperform the competition for nearly one hundred years," Burke recalls.
"Whenever we cared for the customer in a profound-and spiritual-way, profits were never a problem."
The Tylenol crisis could have been a death blow to the brand and, potentially, the company itself, continues Burke. "Innocent people were killed. Industry analysts and advertising experts told us that Tylenol was finished."
As several HBS case studies point out, Tylenol was the country's best-selling over-the-counter pain reliever at the time of the poisonings, with 35 percent of the market-more than the next three brands combined. Yet within a year of the crisis, thanks to decisions by Burke and his team to recall millions of bottles and replace them in a matter of weeks with pioneering tamper-resistant packaging while keeping the media and public well informed, the product had regained 85 percent of its market share. By the mid-1980s, Tylenol had rebounded completely. The customer confidence and goodwill Johnson & Johnson had built up also enabled it to overcome another poisoning incident in 1986-an event that resulted in the replacement of capsules with caplets.
Following his retirement, he was made chairman emeritus of the Partnership for a Drug-Free America
(PDFA), his work for which led US president Bill Clinton
to award him the Presidential Medal of Freedom
, the highest civilian award in the United States. Fortune magazine named him as one of the ten greatest CEOs of all time and he has a membership in the National Business Hall of Fame.
He also received the Bower Award for Business Leadership in 1990.
Chief executive officer
A chief executive officer , managing director , Executive Director for non-profit organizations, or chief executive is the highest-ranking corporate officer or administrator in charge of total management of an organization...
(CEO) of Johnson & Johnson
Johnson & Johnson
Johnson & Johnson is an American multinational pharmaceutical, medical devices and consumer packaged goods manufacturer founded in 1886. Its common stock is a component of the Dow Jones Industrial Average and the company is listed among the Fortune 500....
from 1976 to 1989, a company for which he worked forty years.
Early life
Burke was born in Rutland, VermontVermont
Vermont is a state in the New England region of the northeastern United States of America. The state ranks 43rd in land area, , and 45th in total area. Its population according to the 2010 census, 630,337, is the second smallest in the country, larger only than Wyoming. It is the only New England...
. He earned his BA
Bachelor of Arts
A Bachelor of Arts , from the Latin artium baccalaureus, is a bachelor's degree awarded for an undergraduate course or program in either the liberal arts, the sciences, or both...
at the College of the Holy Cross
College of the Holy Cross
The College of the Holy Cross is an undergraduate Roman Catholic liberal arts college located in Worcester, Massachusetts, USA...
in 1947 and his MBA
Master of Business Administration
The Master of Business Administration is a :master's degree in business administration, which attracts people from a wide range of academic disciplines. The MBA designation originated in the United States, emerging from the late 19th century as the country industrialized and companies sought out...
from the Harvard Business School
Harvard Business School
Harvard Business School is the graduate business school of Harvard University in Boston, Massachusetts, United States and is widely recognized as one of the top business schools in the world. The school offers the world's largest full-time MBA program, doctoral programs, and many executive...
in 1949.
Career
J&J announced that Richard B. SellarsRichard B. Sellars
Richard Beverland Sellars was an American business executive who served as chairman and CEO of Johnson & Johnson as part of 40 years with the healthcare product firm...
would step down as CEO as of November 1, 1976, and be replaced by Burke. As CEO, Burke is credited for the growth of Johnson & Johnson to its current size and prominence, but he is perhaps best known for his crisis management in 1982, when it was found that Tylenol
Tylenol
Tylenol is a North American brand of drugs advertised for reducing pain, reducing fever, and relieving the symptoms of allergies, cold, cough, and flu. The active ingredient of its original, flagship product, paracetamol , is marketed as an analgesic and antipyretic...
capsules had been poisoned with cyanide
Cyanide
A cyanide is a chemical compound that contains the cyano group, -C≡N, which consists of a carbon atom triple-bonded to a nitrogen atom. Cyanides most commonly refer to salts of the anion CN−. Most cyanides are highly toxic....
.
According to a Fortune article, Burke's "defining moment" actually came six years earlier when he challenged his fellow executives to either recommit to the company credo or "tear it off the wall."
Penned by J&J scion and legendary chairman General Robert Wood Johnson II in the 1940s, the credo proclaimed that J&J's "first responsibility" was to its customers and then to employees, management, communities, and stockholders-in that order.
By the mid-1970s, however, Burke was troubled by a sense that the credo had lost its influence in the organization. "When I asked people what they thought of it, I got vague answers," he says. But during a series of "challenge" meetings he arranged, executives debated the credo in the context of the company's history and mission. "It became clear that our value system had been vital to our ability to outperform the competition for nearly one hundred years," Burke recalls.
"Whenever we cared for the customer in a profound-and spiritual-way, profits were never a problem."
The Tylenol crisis could have been a death blow to the brand and, potentially, the company itself, continues Burke. "Innocent people were killed. Industry analysts and advertising experts told us that Tylenol was finished."
As several HBS case studies point out, Tylenol was the country's best-selling over-the-counter pain reliever at the time of the poisonings, with 35 percent of the market-more than the next three brands combined. Yet within a year of the crisis, thanks to decisions by Burke and his team to recall millions of bottles and replace them in a matter of weeks with pioneering tamper-resistant packaging while keeping the media and public well informed, the product had regained 85 percent of its market share. By the mid-1980s, Tylenol had rebounded completely. The customer confidence and goodwill Johnson & Johnson had built up also enabled it to overcome another poisoning incident in 1986-an event that resulted in the replacement of capsules with caplets.
Partnership for a Drug-Free America
The Partnership for a Drug-Free America is a non-profit organization that helps parents prevent, intervene in and find treatment for drug and alcohol use by their children...
(PDFA), his work for which led US president Bill Clinton
Bill Clinton
William Jefferson "Bill" Clinton is an American politician who served as the 42nd President of the United States from 1993 to 2001. Inaugurated at age 46, he was the third-youngest president. He took office at the end of the Cold War, and was the first president of the baby boomer generation...
to award him the Presidential Medal of Freedom
Presidential Medal of Freedom
The Presidential Medal of Freedom is an award bestowed by the President of the United States and is—along with thecomparable Congressional Gold Medal bestowed by an act of U.S. Congress—the highest civilian award in the United States...
, the highest civilian award in the United States. Fortune magazine named him as one of the ten greatest CEOs of all time and he has a membership in the National Business Hall of Fame.
He also received the Bower Award for Business Leadership in 1990.