• Be broadly based in human health care
• Decentralized management—Instead of having one company with a hierarchical, centralized management, we have 200 companies.  The people who run them have complete autonomy.  We hold them accountable for meeting their  objectives.  This gives 200 leaders opportunities to go into small businesses, take a leadership position, and stumble a few times, learn and gradually evolve into larger and larger businesses.  If you go into a multibillion-dollar business and stumble, you ruin your career.  Decentralized management is part of the magic around J&J.   When you think of yourself as a $42 billion company, how do you grow at 15 percent a year?  We look at ourselves as 200 small companies.  Each one grows within its market.  It allows them to be so much more successful.
• Manage for the long term—Whether it’s with products, companies, or people, it’s a commitment to development.  There are many 25- to 30-year veterans at J&J because there’s an investment in their future and their development. 
• Ethical principles—Our Credo is the true underpinning of J&J.  The Credo has been around for 60 years and is the document that moves us forward.  Every major decision starts with the Credo.

“Our extraordinary, sustainable business results are due to the people in the corporation, who are committed to doing a great job, who are making mistakes but learning from them and growing.  If they’re not making mistakes, they probably aren’t taking any chances.  And if they’re not taking chances, they’re not going to grow.”

On the Credo
It starts with responsibility to customers…There are ethical decisions you have to make to protect your customers.  It allows you to excel over time.

Next are employees.  Our philosophy is that everyone gets treated with respect and dignity.  That doesn’t mean you don’t make tough decisions.  One of our companies was meeting every expectation but the infrastructure was much larger than the organization’s needs.  So we cut back a significant number of jobs, set up an outplacement organization to work with us, and placed over 90 percent of the people who asked for help.  We paid so much attention to those being outplaced, we forgot about the people who were staying.  Only in retrospect did we learn that we needed to pay attention to those.

Third is community.   We do a lot in terms of community service but more than that, it’s the individuals who volunteer their time in the community.   And we recognize them for that.

If we take care of our customers, employees, and the community, everything works out well for our stockholders.

On Global Standards of Leadership
About eight years ago, we put together our Global Standards of Leadership.  Each spoke on the wheel (www.jnj.com/careers/leadership.html)—innovations, collaboration, complexity and change, organizational and people development, customer and marketplace focus—represents an area in which management is responsible for achieving business results.  At the center are the Credo values.  We look at these standards all the time in evaluating our people. There’s forgiveness on the numbers side but not on the Credo values.  Business results have to be tied to them.

“You can’t become so metric driven you breed out innovation.”

On Talent Management
We look at the individuals’ track records for the past three years.  Then we look at our Global Leadership Profile and the job requirements, expectations, and experiences.  If they’ve been based in the U.S., we may send them abroad.  If they're in our consumer business, we may move them into pharmaceuticals.  Someone in operations who’s been running a facility but has great skills and leadership potential may be placed in general management programs. 

The J&J Global Leadership Profile

Integrity and Credo-based actions Strategic thinking  Big-picture orientation with attention to detail Ability to inspire and motivate Intellectual curiosity Collaboration and teaming Sense of urgency Prudent risk taking Self-awareness and adaptability Results and performance-driven

The Executive Committee takes on a group of about 100 high-potential people we want to move along.  Each of the group operating committees—pharmaceutical, consumer, and medical devices and diagnostics—and operating companies does the same thing, so you have this wealth of talent.