Fortune

CAN BIG STILL BE BEAUTIFUL?

IN AN ERA WHEN “CONGLOMERATE” HAS BECOME A DIRTY WORD, JOHNSON & JOHNSON IS MAKING THE CASE THAT HEFT AND BREADTH CAN BE VIRTUES. HERE’S HOW A 130-YEAR-OLD HEAVYWEIGHT IS LEARNING TO DEFY GRAVITY.

COMPANY: JOHNSON & JOHNSON

COUNTRY: U.S.

RANK: 103

THE LOBBY OF THE HYATT REGENCY IN New Brunswick, N.J., had been transformed into a bazaar of medical-supply exotica. One booth showcased a large machine that sterilized surgical instruments in 24 minutes, a fraction of the normal time. Nearby was a slick little mealtime insulin dispenser and, not far away, an acne-treating light-therapy mask that looked like a prop from the slasher flick Friday the 13th. But it was the manikin—or make that the ripped-open thoracic cavity of a manikin—that had the crowd most enthralled. One onlooker grabbed a surgical instrument, a cross between a laser gun and a cattle prod, and maneuvered it deep into the innards of the dummy. When he was done he collected a sticker that he stuck with gleeful satisfaction on a bingo card.

Wall Street analysts get excited by the oddest things.

Alex Gorsky was also keyed up, though seemingly not about the bingo cards. For the 56-year-old CEO of Johnson & Johnson, this drizzly morning in May—Analyst Day—offered a chance to put some show behind a tell he had been making for the previous four years, or since he had assumed the reins of the $70-billion-a-year health care giant. The message: J&J isn’t just big, it’s broad—for good reason.

With 250 operating companies in virtually every country, J&J has under its 130-year-old banner the world’s largest medical device business, an even bigger pharmaceutical business, and a consumer products division with a dozen megabrands, from Neutrogena to Tylenol. It makes everything from Band-Aids to Rogaine to contact lenses to tuberculosis medicines.

The 103rd-largest company on the planet by revenue is a bona fide health care conglomerate if ever there was one. But to many in the investor community, that term—“conglomerate”—had become a dirty word.

If there was one case CEOs didn’t want to make to Wall Street, it was this: “We’re sprawling. We’ve got scores of different businesses that seem to have little to do with one another.” Gone was the age when a company chief would unabashedly make that claim. Such a boast was merely a lure to an activist investor—who, at first sniff of bloat, homed in faster than a great white on an

You're reading a preview, sign up to read more.

More from Fortune

Fortune13 min read
Your Drugstore Will See You Now
With last year’s acquisition of Aetna, CVS Health became the biggest publicly traded health care company in the world. But the costly acquisition hasn’t paid off yet—leaving consumers and investors wondering: Is getting health care from your pharmacy
Fortune4 min read
Warby Parker In Hindsight
Dave Gilboa and Neil Blumenthal are cofounders and co-CEOs of Warby Parker—the eyewear company that disrupted the industry by drastically lowering prices for stylish frames. It now operates more than 90 physical stores in the U.S. and Canada and is r
Fortune6 min read
Hollywood’s Wine Seller
CHRISTIAN NAVARRO CAN BARELY stride 10 paces down the big, breezy corridors of the Four Seasons Resort in Maui without stopping to clap a shoulder or kiss a cheek. Though this Hawaiian luxury hub plays host to many traditional celebrities—the Oscar-w