Johnson & Johnson

2005 Robert W. Campbell Award Recipient

Excerpts from Case Study

Johnson & Johnson’s Safety, Health & Environmental (SH&E) functions are organized as a Technical Resources Group (TRG) to optimally service 200 operating companies worldwide related to the manufacture of health care products for the consumer, pharmaceutical and medical devices and diagnostics markets. The TRG’s mission is to create competitive advantage for the Johnson & Johnson operating companies through a strategy of beyond compliance, delivering outstanding service to our customers in pursuit of their business objectives. This case study focuses on the TRG, which provides SH&E leadership, support and consulting services to all 200 operating companies around the globe.

SH&E commitment and accountability start at the highest level of our Corporation: the Office of the Chairman. Also at the top corporate level is the Public Policy Advisory Committee (PPAC) of our Board of Directors. The Committee oversees our policies, programs and practices on public health issues regarding the environment and the health and safety of employees. The corporate strategy-supported at all levels of the organization and echoed in Our Credo of 60 years-is to be the most innovative, most profitable, healthiest, safest and most environmentally responsible health care products company in the world.

Johnson & Johnson’s drive to be the best drives senior leadership to embrace a philosophy of Beyond Compliance, which we believe creates a competitive advantage for Johnson & Johnson. So powerful is this approach that it was recently adopted as a management imperative for all aspects of Johnson & Johnson’s business.

The Beyond Compliance approach is operationalized in the Management Awareness and Action Review System (MAARS), our global process for ensuring SH&E compliance, going beyond regulatory requirements and reducing risk. A suite of technically specific assessment and reporting tools feed into MAARS to create dashboards that make improvement areas readily identifiable. Not only has MAARS enabled Johnson & Johnson to identify and treat high risk areas, but it has led to accident prevention, productivity improvement, and cost avoidance, saving our employees pain and suffering, and the Corporation millions of dollars.

A key reason Johnson & Johnson employees live Our Credo using beyond compliance methods is senior management leadership and hands-on involvement. Chairmen, Board Members, Presidents and Vice Presidents do more than financially support SH&E efforts. They are actively involved in communicating the SH&E message, monitoring progress toward goals, and signing off on improvement action plans.

SH&E conversations and concerns take place at all levels and in all types of operations at Johnson & Johnson. Safety Through Design (integrating safety during initial process design), Healthy People 2005 (high risk reduction for optimal health), Design for the Environment (early rating of processes for environmental factors) are a few key initiatives that create a safe, healthy and environmentally conscious culture.

Besides addressing the health and safety of our employees, Johnson & Johnson reaches out to our communities. We take a Beyond Compliance approach to human and environmental responsibility, striving for performance that exceeds regulatory requirements. Our sites are involved in the Voluntary Protection Program to ensure exemplary safety and health efforts and results. We have formed alliances with U.S. government organizations to share ergonomics and biological best practices. We partnered with Federal Express to design a protocol so that all companies could ship used health care products more easily and less costly, leading to a change in governmental regulations. Health and safety initiatives that are universally applicable are designed for employees to use with their families. Technical leaders at Johnson & Johnson volunteer their time to teach and mentor engineering students to ensure they graduate with a realistic SH&E perspective. We foster, and take pride in, outreach efforts.

Johnson & Johnson’s technical infrastructure supports optimal learning and sharing of information. SH&E procedures and guidelines are part of a document management system which enables efficient updating as regulations and processes change. We have incorporated e-Learning to facilitate quick and cost effective training of new and tenured employees, and contractors as well. Our on-line reporting systems and resulting dashboards enable access to performance metrics at any time. The most important outcome of our performance measurements and information management systems is that they take us closer to identifying potential risk areas before they cause incidents.

The greatest evidence of Johnson & Johnson’s consistent improvement and commitment to SH&E is our results. Nearly every safety performance indicator is at its lowest rate in our history. We are measurably improving the health of our employees with reduced smoking, blood pressure, cholesterol, and inactivity levels. We have exceeded many of our environmental Next Generation Goals.

Johnson & Johnson recognizes that all of our constituents-the people who use our products and services, our employees and their families, the communities in which we live and work, the world community, and our shareholders-rightly hold us to a high standard of performance. It is our integrated, Beyond Compliance approach to improvement that yields Johnson & Johnson’s impressive results. Under the TRG umbrella, the safety, health and environmental efforts seek to create Healthy People, a Healthy Planet, and Healthy Futures.

Business Profile

Johnson & Johnson is the world’s most comprehensive and broadly based manufacturer of health care products for the consumer, pharmaceutical and medical devices and diagnostics markets (ISIC code 2834). Johnson & Johnson employs 110,600 people in 57 countries around the world. Our 200 operating companies produce thousands of products spanning our three business segments:

• Consumer - Includes products for skin, hair care, sanitary protection, wound care, oral care, baby care and nonprescription drugs.
• Pharmaceutical - Develops medicines in areas that include gastroenterology, oncology, central nervous system, dermatology, immunotherapy, cardiovascular disease, mental illness and family planning.
• Medical Devices and Diagnostics - Product lines include surgical implants, instruments, needles and sutures, wound closure devices, orthopaedic products for joint repair and lenses; clinical chemistry systems; medical devices, including cardiovascular monitoring and vascular access products; intravenous catheters and shunts; coronary and biliary stents; and diagnostics used in physicians’ offices and laboratories for identification of diseases.

Johnson & Johnson stock is publicly traded on the New York Stock Exchange (symbol JNJ). Our stock has been included in the Dow Jones Sustainability Index (DJSI) since 2000. The DJSI family follows a best-in-class approach to identify sustainability leaders in each industry. Worldwide sales were a record $41.9 billion in 2003, representing a 15.3 percent increase over the previous year, with each business segment achieving double-digit growth.