In September 1982, seven people in Chicago died after taking Tylenol.
Someone had laced lot MC2880 with cyanide. Johnson & Johnson issued a recall. Two more tainted batches were discovered by authorities in Chicago, then another batch in California was laced with a different poison. Seven days after the initial incident, and after two local recalls, the company issued a nation-wide recall for an estimated total of 31 million bottles of Extra-Strength Tylenol in circulation.
That decision cost $100 million. James Burke, the CEO at the time, made the right choice – one that we can learn a lot from. The event was one of largest product recalls in history. Johnson & Johnson later produced tamper-proof bottles.
The acetaminophen assassin was never found.
Today, drug manufacturing facilities and distribution channels are extremely protocolized. The entire medical industry produces both consumer medical products and a dynamic non-event (people not get poisoned). Counterfactuals, like the Tylenol murders, point to the deadly potential of mass-produced over-the-counter medications.
Thankfully, there are tests and records along every step of the way, composing a remarkable piece of hidden infrastructure.
Principles of Coordinate Leadership
Cases like these have proven to be timeless examples of good incident response. While the crises that most leaders deal with usually aren’t quite that intense, there are some good underlying principles to keep in mind.
Reality has right-of-way. When something goes wrong on the ground, a game of telephone can be dangerous. The clearer of a picture that decision-makers can get of an incident the better. Wishful thinking is pathological and everyone involved should be double checking if their predictions aren’t hopes in disguise. This principle holds even for actor-CEOs whose role is to manage optics and morale. If your story is dissonant with reality eventually that will come back to bite.
Being slow is more expensive than occasionally being wrong. Overreactions are like insurance. You’re not going to get it right every time, but you shouldn’t be trying to. You should try to get it mostly right, fast. A perfect score in pandemic response isn’t a 100% success rate. Cost-wise, it’s more like 130%. False positives in the short run are often prudence in the long run.
Hierarchies should be collapsible. In a crisis the most valuable thing you can do is shorten the feedback loop between frontline signals and executive judgement. Incident response is a team game with a captain. The best-informed person temporarily leads, whether junior or senior. Speed and safety improve when rank yields to situational awareness, and tempo advantage comes from pushing authority to the point of contact.
Executive embedding isn’t just for emergencies. Companies face existential problems all of the time. Especially startups. This isn’t about micromanagement – embedded execs are there to facilitate decision-making by making judgement calls about things that affect other parts of the company. It’s about improving the longevity of a business by launching a siege on key bottlenecks.
In the case of the Tylenol Murders, the first on the scene were media workers – not Johnson & Johnson employees. Burke’s team relied on news outlets to get the word out quickly, both for practical reasons and because they already had captured information on the crisis. J&J’s communications response was lauded as an exemplary case of public relations, but that was really downstream of principled action.
Coordinate Leadership in Practice
There are two types of coordinate leadership modes: acute and chronic.
The first is obvious – accidents, hacks, glitches, breaks, crashes, incidents, spilt milk, falling off a bike in public, and so on. Stuff we’re used to seeing on the news. Chronic coordinate leadership is less common. Some practice it, like Paul Gross, CEO of Remora Carbon or the team at Boom Supersonic.1
For Gross, his job is simple. Each quarter he identifies the top three risks to the company, focuses on those, and delegates everything else. Those risks could be anything from engineering challenges to shrinking financial runways. His main job is to accelerate how quickly the teams on the ground, at the coordinates of the problem, can manage the risk.
For example, a simple design choice about an exhaust pipe might affect customer experience. An engineering team can’t make that call on their own – they’ll need to negotiate with customer service. Customer service might not realize that this is an existential problem, and the engineers might lack the ability to communicate that urgency. An embedded exec can short-circuit that process, dynamically rebalancing the tension in the startup’s operations in order to help the whole firm survive.
Boom Supersonic recently appointed a top engineer as a hiring lead.2 Coordinate leadership doesn’t need to be strictly hierarchical. It can also be lateral. This play was inefficient upfront, but decision speed and quality apparently improved a lot afterward. The company’s headcount grew by 10% – and by having that engineer embedded in HR, the bar for talent was kept high.
Scaling Coordinate Leadership
It works at startups. It works at large corporations. There are always risks to focus on – so long as you’re ruthless about prioritization and maintaining high situational awareness, Coordinate Leadership scales. Indeed, asking what key business risks someone is accountable for is an underrated way to determine what exactly someone’s job is. The job of a Coordinate Leader is always evolving, but their relative role is constant and simple: compress the right feedback loops, at the right place, at the right time.
But just because it’s simple doesn’t mean it’s easy to implement. Simple =/= simplistic.
Prioritization is hard. Situational awareness is expensive. Executive embedding can quickly turn into micromanagement. This isn’t the Steve Jobs management stereotype. Coordinate Leaders are more like universal solvents than masters of taste, and they play a much different role than actor-CEOs, rolling up their sleeves in the slimelight – not the limelight – of the business world.
More reading:
Puzzle
From the Social Radars interview with Paul Gross. Link: https://pod.link/1677066062
“A few months ago, we made a strange decision [at Boom]: we put a superstar engineer in charge of recruiting. The recruiting engine took a little to spool up but now it’s working: This month Boom is growing 10% in one month. And with an extremely high talent bar.” - Blake Scholl, CEO of Boom Supersonic