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Thursday, February 09, 2006

Caring is Profitable - the Johnson and Johnson Credo

I was reminded today of an article that I wrote "pre-blog" which means a lot to me. So I'm sharing parts of it with you. Click on the title above to see the full article.

Here's a quiz:

1. Name the major pharmaceutical companies with almost always positive earnings results over the past five years

2. Name the major pharmaceutical companies that have beaten the US stock market (Dow Jones, NASDAQ, S&P 500) over the last five years

3. Name the major pharmaceutical companies that have increased the amount of their dividend payments to their shareholders over the last year, a time of tremendous chaos for the pharmaceutical industry

4. Name the one company that appears on all three lists.

Have you guessed?

Johnson and Johnson has a Credo, a set of guiding principles that has steered them since 1943. The Credo puts customers first and shareholders last and the business has thrived, here's how it starts:

"Our first responsibility is to the doctors
nurses and patients to mothers and fathers and all others
who use our products and services."

In developing their products for the Diabetes Market, Johnson and Johnson studied the effects of diabetes in a Native American community called Whirling Thunder. They did not focus on just the use of their products, they looked at the lives of those suffering from the disease, Johnson and Johnson looked at how to prevent the disease, sponsoring community programs to reduce the death rate from the disease.....

Johnson and Johnson is a leading provider of Diabetes products. Within a face to face setting inside a Diabetes community, the business learned how to recommend practices, services and products that helped them help themselves, building on their own strengths and culture. These learnings became available for incorporating in a diabetes website. They developed a program called One-Touch Gold which will be launched in fall 2005. Some other companies might call it a Loyalty program. Many loyalty programs are developed which start by asking "What is good for our company?" Guided by their Credo, Johnson and Johnson started first with the question "What is good for our customers?" They build Deep Customer Loyalty.....

The latest buzzword in CRM is Community. One problem is that few people know what that means, and how it helps business make money. The Credo has guided Johnson and Johnson to experiment with online healthcare community building. Research has shown that online support groups for people with a major disease like Breast Cancer can be very effective in providing useful information and friends and counsel for victims of the disease and their families.....

The Credo guides J&J's innovations in online community building for acquiring customers. By experimenting with the idea: "Ask not what the Community can do for J&J, but ask what J&J can do for the Community", they can test the business hypothesis - is this a good investment for the company. Using Customer Lifetime Value J&J will be able to determine how much they can and should invest in the community in order to increase customer lifetime value of their customers and prospects.

Our Credo

We believe our first responsibility is to the 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.
We must constantly strive to reduce our costs
in order to maintain reasonable prices.
Customers' orders must be serviced promptly and accurately.
Our suppliers and distributors must have an opportunity
to make a fair profit.

We are responsible to our employees,
the men and women who work with us throughout the world.
Everyone must be considered as an individual.
We must respect their dignity and recognize their merit.
They must have a sense of security in their jobs.
Compensation must be fair and adequate,
and working conditions clean, orderly and safe.
We must be mindful of ways to help our employees fulfill
their family responsibilities.
Employees must feel free to make suggestions and complaints.
There must be equal opportunity for employment, development
and advancement for those qualified.
We must provide competent management,
and their actions must be just and ethical.

We are responsible to the communities in which we live and work
and to the world community as well.
We must be good citizens - support good works and charities
and bear our fair share of taxes.
We must encourage civic improvements and better health and education.
We must maintain in good order
the property we are privileged to use,
protecting the environment and natural resources.

Our final responsibility is to our stockholders.
Business must make a sound profit.
We must experiment with new ideas.
Research must be carried on, innovative programs developed
and mistakes paid for.
New equipment must be purchased, new facilities provided
and new products launched.
Reserves must be created to provide for adverse times.
When we operate according to these principles,
the stockholders should realize a fair return.

"When we operate according to these principles,
the stockholders should realize a fair return."

In the Spring and Autumn Analects, Confucius laid out a set of simple principles which defined the relationship between people, their families, their government and their society.

Johnson & Johnson has succeeded over many years by following the simple set of principles laid out by their founder that defines the relationships between the business and customers, their communities and their shareholders. Guided by the Credo, Johnson and Johnson have a history of long term success in business profitability and built the most powerful brand in the Pharmaceutical industry.

Maybe we can learn something here about what makes CRM successful.

1 comment:

Scott A. Edwards said...
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