Published: February 27, 2012 3:00 a.m.
Drew Armstrong and Robert Langreth | Bloomberg News
NEW YORK – Johnson & Johnson’s insider pick of Alex Gorsky as the new chief executive officer starting in April elevates the executive who is most familiar with the safety and quality issues that have plagued the company.
Gorsky, 51, a former Army captain and endurance athlete, now leads the devices and supply-chain units. He will be seen by investors as a force for stability at a time when J&J’s image has been tarnished by recalls of artificial hip implants and over-the-counter drugs, as well as safety concerns involving vaginal mesh products that have spurred thousands of lawsuits.
“We do not anticipate significant changes in J&J’s strategic direction under his leadership,” Lawrence Biegelsen, an analyst at Wells Fargo Securities, wrote in a research note after the move was announced.
J&J is the parent company of DePuy Orthopaedics in Warsaw.
The executive change comes during a difficult month for J&J, the world’s second-biggest seller of health-care products.
On Feb. 13, the company, based in New Brunswick, N.J., was knocked from one of the top two spots in Harris Interactive’s annual consumer poll of corporate images for the first time in 13 years, falling to seventh. On Feb. 17, the drugmaker said it was recalling more than half-million bottles of infants’ Tylenol because of complaints with the dosing system.
The recall was the latest of hundreds of millions of packets of Tylenol, Motrin, Benadryl and other products pulled because of foul odors, adulterated ingredients and bad labeling over two years, part of drumbeat of revelations that have undermined the company’s reputation for quality and safety.
“Gorsky is a conservative choice and the strongest internal candidate,” said Erik Gordon, a business professor at the University of Michigan in Ann Arbor. “That’s a big deal at a company that always taps an insider as its next CEO – even if what they need is someone from outside the team that led the company into so much trouble.”
Gorsky, who has spent all but four of the last 24 years at J&J, succeeds outgoing CEO William Weldon, 63, who will remain as chairman. J&J was almost certain to go with an internal candidate after Weldon set up a succession race in 2010 between Gorsky and another top executive, Sheri McCoy, 53, leader of the company’s branded-drug units.
Gorsky, a West Point graduate, will take over April 26 at the company’s annual meeting as only the ninth leader in J&J’s 126-year history, the company said last week. In an October 2011 speech to fellow military veterans in Chicago, Gorsky offered lessons on making business decisions that he said he learned during his career.
“You don’t have to get it 100 percent right,” Gorsky said in a talk posted online by MBA Veterans. “When you get it 60 percent, go! Any more time that you spend trying to figure it out, you’re going to lose in the speed that you’re missing out on.”
Gorsky also described himself as someone who leads by listening before he talks.
“That allows you to collect much more meaningful input and ultimately make the right call,” he said in an online video at the University of Pennsylvania’s Wharton School of Business in Philadelphia, where he received his MBA in 1996.
J&J, maker of things from Band-Aids to cancer drugs, generated $65 billion in 2011 sales.
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