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Crises can turn into a positive for savvy businesses

The history of successful crisis management

In 1982, Johnson & Johnson set the gold standard for crisis management after someone laced Tylenol capsules with cyanide in Illinois. (Richard Drew/AP)
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Companies, ranging from Peloton to Amazon Web Services to the newly rebranded Meta, confronted crises in 2021 that threatened their bottom line and, in some cases, even posed an apparent existential threat. (Amazon founder and former CEO Jeff Bezos owns The Washington Post.)

Meta in November announced that starting Jan. 19, Facebook will discontinue targeted advertising options related to sensitive topics such as health causes, sexual orientation, religious practices (and groups) and political beliefs. Facebook’s rebranding and targeted-advertising revamp are a timely example of how crises sometimes require organizations to make drastic changes. But they don’t have to. In fact, companies that have weathered crises with minimal damage to the bottom line — some even emerging better than before — employ strategies dating to crisis management’s roots. They move proactively and use crisis situations to help innovate, rather than simply reacting and awaiting a return to business as usual.

In 1982, Johnson and Johnson faced a major crisis when someone in Illinois tampered with its Tylenol medicine bottles, lacing capsules with cyanide. Seven people died. At this time, crisis management plans were nonexistent, but J&J executives had the foresight to assemble a team to focus on their strategy in the immediate aftermath of the deaths.

The company moved swiftly to ensure no one else got sick or died. J& J created an 800 number for consumer inquiries and immediately removed all Tylenol from store shelves — more than 31 million bottles — a move that cost the company millions of dollars, while it investigated the problem. No regulatory body or external entity mandated these moves. Instead, J&J followed its credo, which challenged the company “to put the needs and well-being of the people we [J&J] serve first.”

J&J also used the crisis as an opportunity to review its standard practices and create innovative solutions. It developed tamper-resistant packaging, like the foil seal, and pills that were harder to tamper with, yet easy to swallow. Those innovations not only changed the nation’s No. 1 pain reliever, but became the industry standard. J&J’s massive communications and media effort also created a new norm, with other companies following suit and offering myriad ways for consumers to communicate with them and get vital information.

J&J’s actions inspired not only its fellow drug companies, but also public relations and communications executives. They set out to replicate the systems and infrastructures that were integral to J&J’s success. Within a year, Tylenol was back to being the country’s most-used pain killer. In the process, companies launched modern-day corporate crisis management (informal crisis management was probably occurring centuries prior).

In crisis management’s infancy, the field focused on tactical tools such as checklists and plans. In the 1990s, the emphasis shifted to strategy regarding contingencies, uncertainty and various possible outcomes.

Contemporary crisis management builds upon these tools, stressing the importance of taking proactive steps, including precrisis planning (i.e., monitoring, mitigating and preparing for crises); crisis planning (i.e., recognizing, responding and containing crises) and post-crisis planning (i.e., rectifying and revising actions and processes). Although the field has evolved since the 1980s, foundational standards such as compassion, transparency and the importance of timeliness remain.

Yet while crisis managers and organizational leaders probably remember previous crises, they frequently haven’t learned from the history or improved organizational practices and infrastructure in moments when their companies are not in crisis. Insufficient time to adequately debrief and substandard infrastructure to support or encourage crisis history learning probably explain this reality.

But it is a mistake — one that has plagued companies across industries, from the newly rebranded Meta to J&J itself, which has had a rockier time of dealing with problems in recent years.

Consider the benefit to another company when organizational learning became a catalyst for meaningful and sustained improvement. SeaWorld successfully reimagined its brand by turning crises into opportunities, although it still faces significant challenges because of high executive turnover and the ongoing coronavirus pandemic.

While animal rights groups, activists and conservationists always had contentious relationships with the park (and industry), they became an imminent threat to Sea World when a trainer, Dawn Brancheau, was killed by an orca (a.k.a. “killer whale” and “blackfish”) named Tilikum during a live show at SeaWorld Orlando. The crisis was exacerbated by the 2013 release of the documentary “Blackfish,” which chronicled Tilikum’s life up until Brancheau’s death, alleging animal mistreatment and potential catastrophe. The documentary debuted at the Sundance Film Festival, and CNN later purchased the television rights, drawing more than 20 million viewers in one month.

All of a sudden, previously fringe groups and their criticisms gained newfound legitimacy — and posed a serious threat to the park’s bottom line.

Initially, SeaWorld was reactive, going through the typical and obligatory motions expected in the aftermath of crises. Even a year after the release of “Blackfish,” SeaWorld’s stock had plunged by more than 30 percent, profits declined by nearly 30 percent and park attendance plummeted by more than 3 million visitors. The company also lost several corporate partners, and many artists refused to perform at its venues.

SeaWorld clung to its orca program despite the allegations contained in “Blackfish” and the ensuing scrutiny. Later, the company had a failed awareness campaign when activists and members of the public hijacked its #AskSeaWorld hashtag and its “Blackfish: Truth About the Movie” website missed the mark.

By 2015, desperate times required desperate measures. Hoping to stanch the financial and reputational hemorrhaging, SeaWorld hired an outsider, Joel Manby, as CEO.

A year later, SeaWorld acknowledged the situation was untenable. According to Manby, SeaWorld “built the brand around Shamu many years ago and made people fall in love with killer whales … but now the paradox is that it’s one of the leading reasons people are uncomfortable with SeaWorld.”

Ultimately, in 2016, SeaWorld resorted to changing its core business, by removing the iconic orca from its logo, discontinuing its orca breeding program and modifying its signature shows featuring trainers swimming alongside orcas to display the animals’ innate behaviors.

SeaWorld seized the opportunity to reinvent its brand to ensure future success and prosperity. Although SeaWorld’s hand was forced, the case still provides an example of how organizational learning and reflexivity are game-changing. SeaWorld’s reluctant rebranding provided a lifeline to survive an existential threat.

J&J’s handling of the 1982 Tylenol crisis continues to be the gold standard, demonstrating the agility and foresight required to not only weather crisis storms, but to also use organizational and crisis learning as well as unconventional means to create meaningful and enduring change.

While taking such steps can be expensive and painstaking, they leave a business in much better shape than if they use reactive crisis management that lacks the strategic insight and foresight required. Enacting meaningful change can spur innovation, prevent future crises and even contribute to the greater good.