Organizational Excellence

We teach by what we do. What isn't so obvious is how many bad lessons we teach by what we allow. Every one of our actions sends a message to the people around us about our values, our standards, what we'll tolerate, and what we consider unacceptable.

- Rob Lebow and William L. Simon
Lasting Change

It's easy to have a standard and be committed to it as long as things are going your way. It's not so easy when faced with difficulties and obstacles. It is in these problematic situations that you will discover the true measure of an organization or individual's standards.

Here's a great example of a company that, when faced with a significant obstacle, decided to STEP UP! Members of the company proactively took responsibility and responded quickly and effectively to protect their customers. Rather than having a negative impact on profits, their behavior produced just the opposite.

In the Tylenol scare of 1982, seven people died in Chicago as a result of ingesting Tylenol capsules laced with cyanide. Evidence suggested the capsules had been taken from the store, tampered with, then returned to the shelf, i.e., it wasn't technically the fault of the manufacturer. Tylenol makers Johnson & Johnson could have easily shunned the blame and responsibility, but instead did exactly the opposite.

Johnson & Johnson's top management put customer safety first, before they worried about the company's profit and other financial concerns. They stepped up and took full responsibility. They immediately alerted consumers across the nation not to consume any type of Tylenol product. They told consumers not to resume using the product until the extent of the tampering could be determined. Johnson & Johnson also recalled all Tylenol capsules from the market. The recall included approximately 31 million bottles of Tylenol, with a retail value of more than 100 million dollars.

That is what I mean when I say, "Step Up!" On the other hand…

In many other crisis situations, companies made excuses and put themselves first, which produced a predictable result – greater damage to their reputations and their bottom line than if they had immediately taken responsibility for the crisis. Perrier is such a company.

Traces of benzene were found in Perrier bottled water. Instead of holding itself accountable for the incident, Perrier insisted that the contamination resulted from an isolated incident. The company recalled only a limited number of Perrier bottles in North America. By minimizing the danger, Perrier set a trap for itself and stumbled into it.

Benzene was found in Perrier bottled water in Europe. An embarrassed Perrier had to announce a worldwide recall on its bottled water. Apparently, consumers around the world had been drinking contaminated water for months. Perrier was harshly attacked by the media. The company was criticized for having little integrity and for disregarding public safety.

Let's look at the bottom line impact resulting from those two different approaches.

Johnson & Johnson showed its corporate values by protecting consumers first. The company did the right thing and got the right results. Its management chose to STEP UP. Financial damage from the Tylenol scare was minimized and Johnson & Johnson's behavior actually helped strengthen the brand and ensure future profitability.

Perrier's corporate values seemed to include self-serving and self-protection at a higher level than consumer safety. The company made excuses and failed to step up. Perrier lost market share and performance continues to lag. Where its bottled water once held top-of-mind recall before this crisis, it opened the door to competitors. Perrier has never recovered. For that, the company is forever regretful.

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