James E. Burke, the former Johnson & Johnson chief executive officer whose leadership during the Tylenol poisoning scare became a model for corporate crisis management, has died. He was 87.
Mr. Burke, who ran J&J from 1976 to 1989, died Sept. 28, the company said today in a statement. He died in a health-care facility in New Jersey following a long illness, according to an email from Stephen Dnistrian, a company spokesman.
"Jim Burke was among the greatest leaders in the history of American business," Alex Gorsky, J&J's current CEO, said in the statement. "He will forever inspire the people of Johnson & Johnson."
Mr. Burke was CEO at the New Brunswick, New Jersey-based company in 1982 when seven people died from cyanide-spiked capsules of Tylenol, then the nation's leading painkiller. His sure-handed response, from quickly recalling the product to reintroducing it with innovative, tamper-resistant packaging, inspired accolades and a Harvard Business School case study. In 2003, Fortune magazine named him one of history's 10 greatest CEOs.
Truth and 'Trust'
"He spoke the truth and that was astonishingly liberating for everyone who heard it because we have all become so accustomed to public figures telling less than the truth or lying," Richard Tedlow, a Harvard business professor, wrote in "Denial," his 2010 book about corporate leadership.
Mr. Burke ordered the recall of 31 million bottles of Tylenol in 1982 and then sought to save the brand. But he had to buck advisers within the company as well as outside marketing experts who insisted the product's reputation couldn't be saved, according to Mr. Tedlow.
"I don't think they can ever sell another product under that name," Jerry Della Femina was quoted as saying in The New York Times in the early days of the crisis. "There may be an advertising person who thinks he can solve this, and if they find him, I want to hire him, because then I want him to turn our water cooler into a wine cooler."
But Mr. Burke was convinced that J&J could draw on a reservoir of trust among its customers if it handled the crisis openly.
"Nothing good happens without trust," Mr. Burke said in a 2003 profile published by Harvard Business School. "With it you can overcome all sorts of obstacles. You can build companies that everyone can be proud of ."
Tylenol's market share rebounded sharply in 1983 as Mr. Burke led an aggressive marketing effort to reintroduce the product in its new triple-seal packaging. Tylenol's share of the $1.3 billion internal analgesics market fell from nearly 47% before the crisis in 1982 to under 7% during the depth of the crisis and recall in 1982. By September 1983, after a TV campaign on the theme of "You Can Trust Us" had launched early that year, the share was back up to 29%.
As part of the comeback effort, Mr. Burke appeared on the "Phil Donahue Show" and "60 Minutes." J&J also dropped more than 80 million newspaper coupons good for $2.50 off any purchase of Tylenol, sent its army of sales reps from throughout the company to ask doctors and pharmacists to recommend the brand, and provided a 25% discount to retailers who agreed to buy as much Tylenol as they had before the crisis.
By 1985, Tylenol had regained its full market share from before the crisis. Under Mr. Burke, J&J also weathered a second, also-unsolved 1986 poisoning that killed a woman in New York.
James Edward Burke was born on Feb. 28, 1925, in Rutland, Vermont, the son of James Francis Burke, an insurance salesman, and Mary Barnett Burke.
Mr. Burke came from a family of high achievers. His brother, Daniel, died in October 2011 after building Capital Cities/ABC Inc. into one of the largest U.S. media companies. Daniel Burke's son, Stephen, was named CEO of Comcast Corp.'s NBC Universal unit in January 2011. James Burke's sister, Phyllis Davis, was an executive at cosmetics maker Avon Products Inc. Another sister, the late Sidney Burke Carroll, was a New York lawyer and children's book author.
Mr. Burke graduated from the College of the Holy Cross in Worcester, Mass., in 1947, before attending Harvard Business School in Boston.
After serving as an officer in the U.S. Navy, Mr. Burke joined J&J in 1953 as a product director in its consumer first-aid unit. He worked his way up the company mainly through marketing positions, according to Mr. Tedlow. During his tenure as CEO, the company expanded into emerging markets including China and Egypt while adding popular products such as disposable contact lenses.
After retiring, Mr. Burke was chairman of the Partnership for a Drug-Free America for more than a decade. The work earned him the U.S. Presidential Medal of Freedom in 2000.
In 1957 Mr. Burke married Alice Eubank, who is now deceased. The couple had two children, James and Clo. Survivors also include Mr. Burke's second wife, Didi, and her children from a previous marriage. He resided in Princeton, New Jersey.
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