PETER GEORGESCU and The Source of Success
"Can Business Do Good, and be Good?
The New Imperatives"

Chautauqua July 9, 2002
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Was Michael Eisner personally to blame for the change at Disney? He may not have ordered it to happen, but the cultural shift couldn't have taken place without his style of leadership. A brutal take-no-prisoners arrogance had now become the Disney way. I can't imagine it's a good way of attracting or keeping the best talent in any industry. Let alone in the creative fields Disney specializes in. And nothing could be more at odds with the Disney brand image. Why create an atmosphere where some people who work for you, are secretly rooting for your departure? There's a grave danger Disney runs with their cutthroat approach to human relations.

I wouldn't give up on Disney yet. There's hope Eisner will see the light. I have often seen where there is evil in business, there is also the opportunity for evolution.

So let me repeat the question. Is business bad? Again, yes, in part.

But the great, vast majority of business is not bad. I have seen it up close, in person. I have worked with dozens of Arthur Andersen professionals. Honest men and women. Competent, professional, courageous. There lies the real tragedy. A corrupt management, sold out 50,000 plus professionals around the world. And so did Ken Lay at Enron.

Let me be direct about it. Those businessmen who are found guilty of crimes should go to jail. Our justice system must be collar-blind. A crime is a crime. White collar or blue collar. Examples must be set. Deterrents, at this stage of our human development, work.

But again, most people don't behave like Ken Lay, or Gary Winnick of Global Crossing. Joe Nacchio of Qwest, Or Kozlowski of Tyco. Fortunately not.

And I would ask the media, and all of us not to treat thousands of honest businesses guilty until they prove their innocence.

One of my heroes is Jim Burke. He was Chairman of Johnson and Johnson in the 1980's.

You may remember the Tylenol crisis.

In September 1982, someone tampered with capsules of Extra-Strength Tylenol in two suburban communities near Chicago, tainting them with cyanide. Several people were poisoned after taking some of the capsules. Investigators found cyanide in other Tylenol capsules, as well.

At the time, Burke had been CEO for six years. So he bore the responsibility of shepherding the brand, and the company, through one of the most profound crises in corporate history. For several weeks, Burke and his team had to manage, amid an atmosphere of hear-hysteria. Millions of Americans were terrified. Rumors abounded, and any death that occurred in proximity to a Tylenol capsule set off alarms. Under the circumstances, many observers doubted that the faith of the public in Tylenol, and perhaps in any over-the-counter medication, could ever be restored.

Burke and his team at Johnson & Johnson proved them wrong.

First, they responded with total candor, openness, and willingness to tell the truth, beginning with the very first reports of poisonings. Jim believed the public had the right to know, everything the company knew. Second - and this was the toughest part - they made every decision with one over-riding goal in mind: the well-being of their customers. Public safety. For example, both FBI director William Webster and FDA head Arthur Hayes urged J&J not to withdraw Tylenol from stores. They feared a national panic and worried that it might encourage copycat attacks. But Jim considered the risk of more poisonings simply too great.

It must have been immensely tempting to do what they'd suggested. To take the easy route, and save large sums of money. If someone else were poisoned, he could point the finger at the FDA or the FBI. But Burke insisted on pulling the product from the shelves. It was, he realized, the only way to completely guarantee the safety of those who used Tylenol.

J&J spent several hundred million dollars recalling, testing, and destroying millions of bottles of capsules. Then spent millions more, replacing the capsules with less tamper-prone tablets. Finally, the company took the lead in developing new standards and procedures for making tamper-resistant packaging for over-the-counter medications. The FDA quickly adopted them. These were decisions with huge short-term costs - and gigantic long term benefits. Defying the odds, Tylenol regained eighty-give percent of its prior market share within a year and once again became the country's leading analgesic. Soon, sales were greater than ever. My top colleagues at Y&R, were part of Jim Burke's kitchen cabinet during those momentous days. I was a young cub, watching and learning the meaning of honesty and integrity, under duress. Jim Burke is a giant, and one of my many heroes in business.

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