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Robert Wood Johnson II: A Natural Born Leader

Spurred by the untimely death of his father, company founder Robert Wood Johnson in 1910, Robert Wood Johnson II (1893–1968) joined the family business ahead of schedule, at age 17. While his mother had urged him to go college, Johnson decided instead to take an entry-level job at Johnson & Johnson’s Powerhouse and work his way across the departments to learn the company’s business from the ground up. Johnson learned rapidly and quickly rose through the ranks. In 1915, at age 22, he was chosen as a department head. During World War I, as production boomed, Johnson was named the general superintendent of manufacturing, a position which afforded him significant responsibility and an opportunity to lead. And, finally, in 1932, Johnson was appointed company president. In the position, which he held for more than 30 years until his retirement, he articulated and implemented pioneering principles of corporate responsibility. These principles were formalized in his 1943 document, Our Credo, which set out the values that had guided Johnson & Johnson since its founding, and remained the company’s philosophy as Johnson guided the global expansion of Johnson & Johnson from a family-owned company to a global corporation.

The Powerhouse was where Johnson began his first job at his father's company in 1909, only two years after the all-electric industrial energy plant it was built.

Image courtesy: Johnson & Johnson Archives

Johnson was named president amidst the leanest years of the Great Depression, in 1932. During the national financial crisis, he took it upon himself not only to continue Johnson & Johnson’s sound management principles, but to look for practical ideas that would help bring the country out of the Great Depression itself. In 1933, shortly after Franklin D. Roosevelt became president, Johnson wrote him a letter outlining his ideas. He proposed raising wages and reducing work hours to create more jobs and increase consumer spending. To publicize his vision, Johnson circulated his letter to the press and put his philosophy into practice. He gave his workers a five percent raise, an unprecedented move in 1933, when U.S. unemployment had peaked at 25 percent. Johnson hoped this would inspire other business leaders to do the same.

During the Great Depression, Johnson & Johnson didn’t cut a single position. At the height of the financial crisis in 1933, the company opened a new plant in Chicago, Illinois, creating hundreds of new jobs.

Image courtesy: Johnson & Johnson Archives

Despite his best efforts, few took Johnson’s advice. Undeterred, he formalized his philosophy in his 1935 publication, Try Reality: A Discussion of Hours, Wages, and the Industrial Future. “It is in the interest of modern industry,” he wrote “that service to customers comes first; service to its employees and management second, and service to its stockholders last.” Try Reality was also Johnson’s first attempt to formally express the concept of “corporate responsibility,” an idea that had guided Johnson & Johnson since its founding, though it had remained an unspoken commitment until the 1930s. 

As the economy improved, Johnson continued to refine his business philosophy, which served as a guide amidst the company’s rapid expansion across the globe. When he became president in 1932, Johnson & Johnson was still very much a family business. It owned a few operating companies outside the United States; among them were factories in Montreal, Canada, and Slough, England. Johnson took the lessons learned from these plants, namely the success of locally managed operating units and made them a model for future expansion. Decentralization meant that factories were staffed and managed by locals to ensure that the products manufactured would reflect the needs of local consumers. Under Johnson’s presidency, Johnson & Johnson expanded to include more than 31 operating companies in 18 countries worldwide by the 1940s. Furthermore, he diversified the company, leading acquisitions in new fields, like pharmaceuticals, and increasing scientific research. Yet as the company expanded, he ensured that his promise to consumers and employees was upheld. Product quality was not sacrificed, nor were workers’ rights compromised.

Acquisitions during his tenure included McNeil Laboratories (the creator of TYLENOL®) and Janssen Pharmaceutica, a groundbreaking pharmaceutical firm founded by Dr. Paul Janssen.

Image courtesy: Johnson & Johnson Archives

After the United States entered World War II in late 1941, Johnson was rewarded for his business acumen. President Roosevelt appointed him chairman of the Smaller War Plants Corporation, which regulated military contracts for small businesses. For accepting the position, Johnson faced some initial criticism from skeptics – including U.S. Senator Harry S. Truman – regarding the ability of someone who managed a large business being able to represent the interests of smaller ones. Johnson proved their criticism to be unfounded. Through the position, Johnson bolstered smaller companies, helping them grow. During his time in Washington, D.C., he continued honing his business philosophy.

During World War II, Johnson was named a one-star brigadier general. The nickname “General Johnson” followed him back to civilian life.

Image courtesy: Johnson & Johnson Archives

When Johnson returned to New Brunswick and to his company, he penned Our Credo, the culmination of nearly a decade’s work. Our Credo echoed his earlier writings, expressing the company’s responsibility first to medical professionals, patients, and consumers; second, to its employees; third to its community; and last to its stakeholders. He believed the latter’s success rested on the company upholding its commitment to the former. Our Credo was written on the eve of the company going public—Johnson & Johnson became publicly traded in 1944.

Corporate responsibility wasn’t the only forward-thinking principle Johnson put forth. In 1949, he wrote this book, which detailed the necessity of businesses using renewable resources to protect the environment.

Image courtesy: Johnson & Johnson Archives

After Johnson retired at age 70, in 1963, his work as a leader and his promise to consumers endured. As president and then chairman, he had a vision for the future that was ahead of its time. Today, 75 years later, Our Credo remains relevant and powerful. It continues to be Johnson & Johnson’s guiding business philosophy and its recipe for success. Through the decades, the company has continued to expand into developing fields of healthcare, new areas of research, and cutting-edge product development. Johnson & Johnson now includes more than 250 operating companies around the world. At its heart, the company’s global vision remains unchanged. Above all, just as Johnson wrote in 1943, the company is backed by an unwavering commitment to consumers, medical professionals, its employees, and the community.

 

 

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