Managing for Sustainable Growth
Through more than a century of change, Johnson & Johnson has been a company of enduring strength, privileged to play a role in helping millions of people around the world live better, healthier lives.
We credit our strength and endurance to a consistent approach to managing our business and to the character of our people. We are guided in everything we do by Our Credo—the management document authored more than 60 years ago by Robert Wood Johnson, our chairman from 1932-1963—and by four strategic principles: being broadly based in human health; operating in a decentralized manner; managing for the long term; and staying focused on our people and values.
Over our history, this approach has allowed Johnson & Johnson to manage through various economic cycles. Recently, we have faced unprecedented economic conditions, coupled with one of the most difficult business periods in the Company’s history. While we are always preparing for anticipated patent expirations and competitive challenges, few—if any—forecasters predicted the extent of the worldwide recession and its widespread impact. Virtually all industries, including health care, have experienced extraordinary pressures.
We recognized these economic challenges and initiated appropriate and necessary steps to ensure our ongoing success. We have had to rethink some investments, reduce infrastructure and find ways to operate more efficiently while focusing on the excellent prospects for innovation and growth within Johnson & Johnson.
ACTIONS AND PLANS ACROSS OUR BUSINESSES
We further consolidated our management structure and took other actions to generate the resources necessary to drive future growth, including aggressive funding for launching innovative products and services in the near term, pursuit of our most promising longer-term growth opportunities and continuing investments in the development of our people.
In August, we started streamlining our operations by eliminating the Comprehensive Care Group Operating Committee, transferring those businesses into one Medical Devices and Diagnostics segment along with the Surgical Care franchises.
In November, we outlined restructuring actions and plans developed by each of our businesses. These included reducing layers of management, increasing individual spans of control and simplifying processes. Among our difficult decisions was the elimination of some jobs and redefinition of others. We remain committed to the fair and responsible treatment of all affected employees, including prompt notification from leaders in each person’s business segment and focused support. We especially recognize the difficult economic environment in which we are implementing our plans. The support we provide varies according to markets and businesses; we include consultation procedures on our plans in countries where these are required.