I have been following the Tylenol story for some time now, with increasing amazement.
How could a company that once wrote the book on crisis management fail at it so completely? By management design, writes Inder Sidhu of Cisco.
The company has a deliberately decentralized management structure, so when CEO William Weldon pulls his Sgt. Schultz routine he may be telling the honest truth. (Picture from Wikipedia.)
When I called Tylenol’s owner, McNeil Labs, the next BP a few months ago I got no pushback — readers here get exercised when I criticize corn syrup.
What began last year with a few recalls has now mushroomed:
- The total number of recalls involving poor manufacturing has grown to five.
- Johnson & Johnson, parent to McNeil, now faces state and federal subpoenas.
- Generic alternatives are eating Tylenol’s lunch.
- Weldon has been called before Congress, and his attempts to squirm out of it are not drawing cheers.
- A new study conducted in Ethiopia has now found a direct link between acetaminophen, the active ingredient in Tylenol, and childhood asthma.
All this is drowning out the good news. Warren Buffett has doubled his holding in the stock. The company recently sold $1.1 billion in bonds at good rates. A University of Florida study shows acetaminophen may be good for hurt feelings.
Tylenol is not a new drug. It has been around since the year I was born. Its history goes back almost as far as that of aspirin, which was first produced commercially in 1897.
If all this can happen to Tylenol, in other words, no drug is safe. That’s your take-away.
