Drugmaker Johnson & Johnson (J&J) lost a case versus the state of Oklahoma yesterday, that requires J&J to pay the state $572 million for its role in the state's opioid crises. Since 2000, the state reports more than 6,000 people have died as a result of opioid overdoses. The state's legal team argued that J&J's marketing practices minimized the risks of their painkillers, including addiction while promoting their benefits.
J&J maintains they did nothing wrong, and they plan to appeal the verdict. A J&J spokesperson responded to my request for comment on the case by saying, "the company must responsibly address its litigations, including being willing to go to trial when the facts and law are so strongly on our side."
Oklahoma sued and reached settlements with two other drugmakers, Purdue Pharma and Teva, for their role in the opioid crisis. A number of other states are suing pharmaceutical companies as well for similar grievances.
This case marks a turn, particularly in federal court that showcases that companies are now being held responsible for the consequences of their actions, particularly as it relates to public health.
Full disclosure, I worked for J&J for nine years. One of the hallmarks of my time there was the company's intense focus on The Credo (J&J's values), and living into the values outlined in it in order of priority. The first sentence of The Credo reads:
"We believe our first responsibility is to the patients, doctors and nurses, to mothers and fathers and all others who use our products and services."
The state of Oklahoma's grievances and the subsequent verdict in their case against J&J implies that the company didn't operate in a manner that was congruent with their Credo values.
This philosophy of putting customers first, not only in stated values, but in day-to-day practice is one it seems a number of companies grapple with as they work to achieve their financial goals.
The true purpose of a company.
In my current job as a consultant, I worked with a company recently on improving their customer experience. One of the roadblocks that we encountered along the way was how laser-focused every team member was on driving sales.
Of course, the company is for-profit, and it is important to sell more of what they are offering to continue to operate. But their intense focus on sales sometimes clouded their judgment as to what was best for the customer and the experience they would deliver to them. As such, it took quite a bit of reprogramming to get the teams to see that focusing on improving customer success along their customer journey would lead to greater sales.
Last week, nearly 200 CEOs issued a statement noting that shareholder value is no longer their primary objective. While a focus on this goal has served many businesses well over the years and their sustained and rapid growth, it hasn't come without its social casualties.
Going back to the J&J Credo, it did address shareholder value in the final paragraph:
Our final responsibility is to our stockholders. Business must make a sound profit...When we operate according to these principles, the stockholders should realize a fair return.
Peter Drucker, a leading thinker in business management, wrote in his book The Practice of Management that "the purpose of a business is to create and keep a customer." There is a nuance that keeps everything above board with this definition of purpose: focusing on customer success.
Without this hierarchy, it becomes too easy to find ways to get and keep your products on your product, even when it isn't in their best interest.
The well-being and success of your customer must be the guiding principle of any customer-centric focused company.
That nuance, must be ingrained into your company culture. Your team should know that when you prioritize taking care of your customer, they will reward you with their loyalty.
It doesn't require tricks. It doesn't require manipulation. And it definitely doesn't require doing anything that could be even remotely questionable, that derails and destroys the lives of the customers and their loved ones in the process.
Customers are starting to hold the companies they interact with accountable for their actions, especially if they are not in line with their values. And now, the court system is too.
Editor's Note: This article has been updated to include a comment from a J&J spokesperson.