James E. Burke, the former Johnson & Johnson (JNJ) chief executive officer whose leadership during the Tylenol poisoning scare became a model for corporate crisis management, has died. He was 87.
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 e-mail from Stephen Dnistrian, a company spokesman.
"Jim Burke was among the greatest leaders in the history of American business," Alex Gorsky, the current CEO, said in the statement. "He will forever inspire the people of Johnson & Johnson."
Burke was CEO at New Brunswick, New Jersey-based J&J 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.
"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.
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.
High Achievers
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.
Burke graduated from the College of the Holy Cross in Worcester, Massachusetts, in 1947, before attending Harvard Business School in Boston.
After serving as an officer in the U.S. Navy, 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 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.
Cold Case
The Tylenol case remains an unsolved crime, 30 years after the deaths of the Chicago-area victims. The sabotage threatened a product that accounted for one-fifth of J&J's earnings at the time and spurred a national panic about the safety of consumer products, Tedlow wrote.
After poisoned capsules were traced to J&J factories in different parts of the U.S., authorities concluded the tampering likely occurred somewhere in the retail system, Tedlow wrote.
Burke, who recalled 31 million bottles of Tylenol and then sought to save the brand, 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 Tedlow.
The CEO was convinced that J&J could draw on a reservoir of trust among its customers, if it handled the crisis openly.
Full Rebound
By 1985, Tylenol had regained its full market share from before the crisis. Under Burke, J&J also weathered a second, also-unsolved 1986 poisoning that killed a woman in New York.
"Nothing good happens without trust," 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."
After retiring, Burke was chairman of the Partnership for a Drug-Free America, an anti-drug group, for more than a decade. The work earned him the U.S. Presidential Medal of Freedom in 2000.
In 1957 Burke married Alice Eubank, who is now deceased. The couple had two children, James and Clo. Survivors also include Burke's second wife, Didi, and her children from a previous marriage. He resided in Princeton, New Jersey.
To contact the reporter on this story: Alex Nussbaum in New York anussbaum1@bloomberg.net.
To contact the editors responsible for this story: Reg Gale at rgale5@bloomberg.net; Charles W. Stevens at cstevens@bloomberg.net
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