Alex Gorsky and the Battered Johnson & Johnson (JNJ) Credo
1/29/2013 7:41:31 AM
Last week was significant for Johnson & Johnson ceo Alex Gorsky in different ways. For one, it was the first time that he presided over a discussion of an annual earnings report as ceo of the healthcare giant. At the same time, J&J made headlines, once again, over a potentially scandalous disclosure of previously unknown data concerning its troubed hip implants. So it was a good-news-bad-news few days. On one hand, Gorsky had a chance to engage investors and analysts as he outlined his views on remaking the troubled consumer healthcare business, shifting the product portfolio and the resurgent pharmaceutical unit. On the other hand, there were lingering questions about the extent to which J&J has been living up to its storied credo. The credo, which is emblazoned at the entrance of J&J headquarters in New Jersey, begins by reiterating a responsibility to ‘doctors, nurses and patients, to mothers and fathers and all others who use our products and services. In meeting their needs, everything we do must be of high quality,” Mindful of the diminished reputation caused by numerous products recalls traced to manufacturing problems at its over-the-counter business and the latest controversy surrounding hip implant data, Gorsky was careful to mention the J&J credo during the earnings calls last week before delving into results and strategy. “Now, on a personal note I want to say how fortunate I am to be working alongside the many great people of Johnson & Johnson, and as always I want to start with the comment on our credo. Together, there are more than a 128,000 of us around the world with wide ranging responsibilities and capabilities and we’re united by a common purpose. At Johnson & Johnson we’re committed to caring for the world one person at a time,” he said. There is irony in this, however. Two of the most contentious scandals have taken place in business units on his watch. Take the case of the hip implants. The New York Times last week reported that an internal J&J analysis that was conducted in 2011 had estimated that the all-metal device would fail within four to six years in 37 percent of patients.