The old adage that actions speak louder than words is all the more apposite in the age of always-on global digital communications, which makes it more or less certain that someone, somewhere will call you out if your behavior fails to live up to your rhetoric. Which is why eschewing hypocrisy and acting with integrity is a critical component of any organization's communications strategy.
By Dex McLuskey
Johnson & Johnson, facing about 16,000 suits alleging cancer-causing asbestos contamination in its iconic Baby Powder talc, said on May 20 it will stop selling the product that it began marketing in the 1890s.
At first blush, this seems to be a responsible decision by a company that touts its "longstanding reputation as ‘the Baby Company’.”
But there are caveats.
First, sales will only end in the US and Canada. Second, J&J is not withdrawing the product. Instead, Kathleen Widmer, chairman of the company’s North America consumer unit, said existing inventory will continue to be sold until supplies run out.
Rather than pulling Baby Powder from the shelves on concern that it might cause cancer among American and Canadian users, the company has made a “commercial decision” to phase it out because sales are falling.
“Demand for talc-based Johnson's Baby Powder in North America has been declining due in large part to changes in consumer habits and fueled by misinformation around the safety of the product and a constant barrage of litigation advertising," the company said in a statement.
Baby Powder was one of J&J's first launches following its 1886 founding. From the font used in the branding to the “no more tears” tagline and shape of the bottle, the iconic product became a byword for trust and authenticity for generations of moms, especially new mothers, the key demographic for the company’s consumer franchise. By walking away from Baby Powder in North America, the company is signaling that the product is no longer an asset to the J&J brand and is probably even a liability.
The decision to end sales follows investigations in late 2018 by Reuters and the New York Times that said J&J knew for decades that its talc-based powder was sometimes tainted with asbestos and that it kept this from regulators and the public.
The company’s May announcement came about three months after a New Jersey jury awarded $750 million in punitive damages to four people who claimed that Baby Powder use had caused their mesothelioma. State limits mean the judge will likely reduce the amount to $185 million, according to reports.
J&J said it will appeal that ruling and others, including a $4.69 billion award in 2018 to 22 plaintiffs in Missouri who said Baby Powder caused their ovarian cancer. According to Reuters, J&J “has blamed its losses on juror confusion, ‘junk’ science, unfair court rules and overzealous lawyers looking for a fresh pool of asbestos plaintiffs.”
In a rebuttal, J&J called the 2018 Reuters story “false and inflammatory” and doubled down on that stance in announcing the withdrawal of talc products, saying that it “remains steadfastly confident in the safety of talc-based Johnson’s Baby Powder.”
“We will continue to vigorously defend the product, its safety, and the unfounded allegations against it and the Company in the courtroom,” the statement said. “All verdicts against the Company that have been through the appeals process have been overturned.” J&J won eight talc-related cases in 2019, according to Bloomberg.
Because it stands to reason that, if there was something wrong with its talc-based products, J&J wouldn’t continue to potentially expose customers outside of the U.S. and Canada to cancer-causing asbestos, right? And it would immediately withdraw all remaining product from North American shelves, wouldn’t it?
J&J’s move comes about nine months after the Business Roundtable, an influential group of the chief executive officers of some of the biggest US companies, redefined the “Purpose of a Corporation” to embrace constituents other than shareholders. Members signed a commitment to deliver value to customers; invest in employees; deal fairly and ethically with suppliers; support communities; and create long-term value for shareholders.
“This new statement better reflects the way corporations can and should operate today,” Alex Gorsky, who chairs the Business Roundtable’s corporate governance committee, said in the Aug. 19 announcement. “It affirms the essential role corporations can play in improving our society when CEOs are truly committed to meeting the needs of all stakeholders.”
Mr. Gorsky’s day job is chairman and CEO of Johnson & Johnson. In the same week the Business Roundtable announced its commitment to more responsible corporate behavior, J&J said it would appeal the award of $572 million in restitution to the state of Oklahoma for the role played by its Janssen unit in the opioid epidemic. It was the first time a court held a company accountable for helping to fuel the crisis.
J&J and Janssen “did not cause the opioid crisis in Oklahoma, and neither the facts nor the law support this outcome,” the company’s general counsel Michael Ullmann said in a statement following the verdict.
These examples are a far cry from how the company acted in the past. In what is widely regarded as the first mass product recall, J&J spent an estimated $100 million in late 1982 pulling 31 million bottles of Tylenol from the market and replacing them with tamper-proof packaging after seven people died in the Chicago area by ingesting sabotaged capsules that had been laced with cyanide.
Within a year, Tylenol’s share of the analgesic market, which plunged to 7% from 37% following the crisis, recovered to 30% and the episode became a blueprint for how to deal with a crisis.
Why? Because J&J acted with integrity by putting customers before profit and the interests of all stakeholders ahead of its own.
Just as Mr. Gorsky pledged to do 37 years later.
It takes little effort to say you have integrity, but as the experiences of Johnson & Johnson through the Tylenol, opioid and Baby Powder episodes show, it’s a whole different matter behaving with integrity.