Johnson & Johnson has a reputation for being a remarkable company. It manufactures many market-leading products and achieves consistently good financial performance. Unfortunately, however, the company has taken some serious hits. In 2010, for example, Johnson & Johnson had to deal with 11 major recalls in the United States. There were also major recalls of eye care products in Europe and Asia. As a final example, three of its manufacturing plants were subjected to federal oversight as a result of the recalls and other related problems. The company has taken some very expensive and highly visible steps to restore its reputation. For example, it's investing over $100 million to renovate a plant in Ft. Washington, Pennsylvania, to ensure no further manufacturing problem occur, such as the one that resulted in the largest recall of children's medication in history.
The company has also taken some important steps that are somewhat less visible to address challenges it has faced, and to regain consumer trust and confidence in the company and its brands. In particular, the company has increased the emphasis it places on making sure its managers have the abilities necessary to lead the company, and as a consequence, the company is investing more than ever in the development of its people to make sure this happens. As an example of the type of investment in its people that Johnson & Johnson has made in the past, consider the company's effort to understand the difference between average and exceptional managers in terms of the abilities they possess. Supervisors, peers, and subordinates assessed the abilities of several hundred Johnson & Johnson managers. The results showed that the high potential managers-those who had performed well with respect to achieving business objectives and who were believed to be ready to take on more responsibility-had greater levels of emotional intelligence than managers with average potential. Apparently, in addition to competencies such as "drives business results," "manages complexity," and "promotes innovation" that Johnson & Johnson had long believed to be key factors in determining effectiveness of their managers, abilities relating to self-awareness, use of emotion, and regulation of emotion were also important.
Based on the results of the study, Johnson & Johnson implemented several initiatives. First the company began to consider aspects of emotional intelligence in the selection of new employees as well as in evaluations of employee performance and promotion potential. Johnson & Johnson also invested in education programs in order to inform their employees about the nature of emotional intelligence and its benefits. Finally, the company developed training programs so that employees could be taught how to improve their own levels of emotional intelligence. Although decision makers in the company understand that emotional intelligence may be difficult to change by the time an employee becomes an adult, they also apparently believe that emotional intelligence is critical for the company's long-term success and they are willing to invest company resources in hopes of developing employees with this particular ability. It's also worth noting that although the results of the study indicate that managers with higher emotional intelligence can achieve better business results than managers with lower emotional intelligence, the manner in which emotional intelligence might help the company avoid and manage recalls and the related problems discussed about is unknown.
1. Why do you think there was a difference in emotional intelligence among the high-and averaging-performing managers at Johnson & Johnson? Which facet of emotional intelligence do you think is most and least important to managers in this company? Why?
2. Do you believe the programs that Johnson & Johnson implemented to improve the emotional intelligence of its employees will be successful? Is it appropriate to consider abilities in evaluations of job performance? Do you feel the same way about all abilities? Why?
3. Describe ways in which employee emotional intelligence might play a role in helping Johnson & Johnson avoid recalls due to problems with manufacturing and quality control. Are there other abilities that are likely to be more important in avoiding these types of problems?