Over the last two decades, it may well be that Johnson & Johnson's best product has been it's managers. The company has developed rigid training and management programs that have created a cult-ish like conformity. And that was a good thing when the company behaved ethically. However, J&J's business model under William Weldon took a decidedly darker turn, and J&J managers were willing to cut corners for short-term profits and engage in legally-suspect behavior. A mountain of FDA violations and court cases are the legacy of the culture that Weldon created at J&J. However, J&J has also turned this into an export-industry.
Nobody is feeling that pain better than Avon Products. Avon bought the J&J mystique and is paying the price. When J&J passed over Sherilyn S. McCoy for the CEO role in favor of the more traditional male candidate, McCoy bolted. She went to head up Avon Products and try to turn around the failing company. And, to be fair, Avon was in deep trouble before Sherry McCoy showed up.
Prior to McCoy's arrival, the company announced The U.S. Securities and Exchange Commission was investigating its disclosures to analysts, resulting in the dismissal of the CFO. Ouch. Add to that a Foreign Corrupt Practices Act (FCPA) investigation and the company is in a world of trouble. Double Ouch. So Avon brought in McCoy as their Band-Aid to clean up the mess. Unfortunately, things haven't gone smoothly since her arrival. As I used to tell the kids - 'You don't hire the fox to watch the chickens.'
I've never met McCoy and I've got nothing against her personally. She did an amazing job rising through the ranks at Johnson & Johnson and she recognized the potential elsewhere. But now Avon's shareholders are paying the price.
To be fair, McCoy isn't the only "J&J export" to have run into trouble elsewhere, she's just the highest profile.
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