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Richard Tedlow
  Richard Tedlow

Author, Business Historian Richard Tedlow Educates, Charms Audience

11/11/2005 --

39th annual William K. McInally Memorial Lecture honors former Regent.

ANN ARBOR, Mich.—Calling this year’s 39th annual William K. McInally Memorial Lecture featuring Harvard Business School Professor Richard S. Tedlow a "lecture" may have been underselling it a bit.

To be sure, there were "lecture-like" moments. Tedlow had a title - "What We Can Learn from the Titans." He had a PowerPoint presentation. He wrote things on a chalkboard; he talked about business principles such as branding; he even showed a two-by-two matrix.

But there was so much more to his high energy, highly entertaining interactive presentation at the Stephen M. Ross School of Business at the University of Michigan. Tedlow's lecture also could have been billed as a "night at the Improv" as he kept the Hale Auditorium audience in stitches with his jokes about himself, his work and even his employer ("there’s no BS like HBS, we like to say").

His Nov. 8 lecture also had a daytime talk-show feel to it as Tedlow did his best Phil Donahue impersonation by walking the steps of the auditorium to coax comments and answers from audience members.

In short, Dean Robert J. Dolan was on the mark when he called Tedlow "simply the most insightful and engaging business speaker I have ever heard."

The annual lecture series began in 1966 in memory of William K. McInally, who served on the University of Michigan Board of Regents from 1960-64 and enjoyed a career in teaching, law, banking and business.

Tedlow, the Class of 1949 Professor of Business Administration at Harvard and student of business history, based his talk on the Tylenol crises at Johnson & Johnson in 1982 and 1986. In 1982, Tylenol capsules were tampered with, leading to the poisoning deaths of seven people in the Chicago area. In 1986, a few years after reintroducing the capsule in tamper-resistant bottles, one woman in New York was poisoned.

He asked the audience how a company deals with that news.

He showed television news clips from that time — including a sound bite from an analyst who said that the Tylenol brand wouldn't survive the scandal — and news conferences with Johnson & Johnson CEO Jim Burke. Tedlow stopped the video often to elicit comments from the audience on what the company should do or what they thought of Burke's responses at news conferences.

If he didn't see a hand raised, that didn't stop Tedlow from calling on someone. "I see a hand," he'd say to the crowd with a smile. "It's not raised, but what do you think of what you saw, sir?"

One clip showed a fire engine driving through neighborhoods telling residents not to take Tylenol, causing Tedlow to joke: "When you’re trying to build a brand and a fire engine is driving through your market saying 'Buy this brand and die,' that's bad."

Tedlow, whose "Giants of Enterprise" was selected by Business Week as one of the 10 best business books of 2001, asked the audience to rate Burke’s performance. Words such as "responsibility," "accountability" and "honesty" were used. Others noted how Burke seemed to become emotional when he mentioned the name of the one victim in the 1986 poisoning.

Clips of his 1986 news conference announcing the company's decision to stop selling capsules over the counter included a shot of Burke holding up a cell phone-sized prop "caplet" that was its replacement. Tedlow conjectured what it would be like to take that pill, adding "I wonder if it came with a shoehorn." Burke was criticized by some for promoting the product at the news conference only moments after talking about the poisoning victim.

"Burke didn't miss a beat when asked about that," Tedlow said. Burke responded, "I had a business to protect and a business to defend. And there was nothing I said that wasn't true."

Then Tedlow played a video of Burke being asked live on TV to respond to the statement by the 1986 poisoning victim's mother that the company should have pulled the capsules off the market three years earlier.

"What's your response? You're on live television," Tedlow said. "Your whole professional life is on the line."

Burke’s answer: He said if he were the victim's mother, "I would say the same thing; I would feel the same thing. With the benefit of hindsight, which is 20-20, I wish we had never gone back into the market with capsules."

"It’s the simple truth," Tedlow said of Burke’s short and to-the-point response. "This is a pretty severe test," Tedlow said of the Tylenol crises. "Most of the people in this room are never going to be tested this way."

Burke knew what he was doing. While everyone around him was worrying about the next five minutes, Burke was thinking about the long term, Tedlow said.

When company officials met daily to talk about the crises, Burke made sure each person received a fresh copy of Johnson & Johnson's credo reiterating the company's responsibility to consumers and medical professionals using its products, employees, the communities where its people work and live, and its stockholders.

Burke knew that the real issue was trust. He said the value of a brand is the capitalized value of the trust between the company and the customer. "That was the beacon that kept him going through this disaster," said Tedlow, who is currently working on a biography of Andy Grove, a founder of Intel.

In closing, Tedlow talked about thinking outside the box when looking for solutions to problems. He said the first locomotives pulled stagecoaches because that is how the people of that era "saw" travel. More recently, the computer was invented with analysis in mind but instead became a powerful communications tool that has created new communities that no one ever envisioned.

"We're all marching backwards into the future," Tedlow said. "If you can turn around a little bit and see a little bit further ahead, the world's your oyster."

View Webcast: 2005 McInally Memorial Lecture

Written by Dan Shine

For more information, contact:
Mary Jo Frank
Phone: (734) 647-4626