EDUCATION FOR COMMERCIAL RESEARCH FRANCIS J. CURTIS,' MERRIMAC CHEMICAL CO., INC., BOSTON.MASSACHUSBITS
Education has three functions: 1. To inspire the desire to know. 2. To teach how to learn. 3. T o inculcate facts. These principles are used i n the teaching of commercial research which i s that branch desired 60 show the business value of a proposal. A typical case is outlined from which i s deduced the equipment necessary and the personal characteristics desirable for those who would engage i n commercial research. Cmnmercial research i s shmun to be the cocirdination of all the developmental efforts, technical, econmnu, and financial toward a decision.
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Whether it be for commercial research or philosophy the function of education is, first, to create the desire to know, second, to teach the method of learning, and quite lastly to inculcate facts. With special variants for each, these principles apply to all subjects and commercial research is no exception. By commercial research is meant the process of investigation leading to the determination of the business value of a proposal. In the chemical field to which we shall confine ourselves i t undertakes the correlation of all the aspects of a problem, of which the strictly chemical research is only one, to the end of final decision. It is synthetk, coordinating, and all-inclusive. It must take the broad view: chemical, engineemng, economic, and human. Commercial research, then, requires both investigation and decision. Investigation must be careful of the truth and thorough but not overdone. Cultivation of judgment and the ability to crystallize are necessary that decisions may be reached in a reasonable time. What of the importance of commercial research? Its functions have been performed in some manner in all businesses, but the complete development into a specialized department makihg all-round studies from the raw material, market, chemical, engineering, and financial aspects have been a more recent growth. We are in a period of overcapacity and consequently intense competition. Mistakes tolerated in boom times cannot be excused now. The miniature golf course of 1930 is a good example of the lack of market research and the hysteria of initial success. Much is heard of a planned economy: commercial research is the planning board of the individual industry. This very idea interests the student: a national planned economy is obviously so very desirable and so hard to attain. Here, in commercial research, is the opportunity to introduce planning into the smaller units of
* Director
of Development. 55
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which the large is composed. What is difficult to do nationally under present circumstances might be accomplished more easily if planning were camed out in all the subdivisions first. So have great nations grown from small ones. Commercial research is creative. From ideas, through study and thought, are born new industries, new methods of satisfying the wants of man. The satisfaction of him who brings forth a statue is rivaled by the creator of new chemicals rendering better service to industry and humanity. For the ambitious, few paths offera more direct route to executivepositions. The experience gained in so many fields, all necessary to the conduct of a business, is invaluable. These problems must in their turn be looked a t from the standpoint of production, of sales, of research, and of finance. In no other spot short of the chief executives are these points of view brought together. Broadness of subject, lack of routine, constant variety lend a pleasure to commercial research little found in this specialized era. Such considerations must be used to awaken and keep lively the desire to know. From this discussion i t is obvious that to learn commercial research certain tools will be necessary. The student must know how to investigate and how to come to a decision and his training must be designed to these ends. For both will be necessary chemistry and economics with a definite amount of accountancy. A fair proportion of certain characteristics, given or acquired, will be almost imperative. Imagination, initiative, ability to make friends, the knack of presenting technical facts to the non-technical mind, the faculty of corr@atmg work in different fields, and of carrying through are some. Above all, decision must be cultivated by the constant making of judgments. Many companies require that each writer of a report present his vote on the question as if he were the final executive. To develop these characteristics the case system so successful in other fields would seem to be the best. Developing the student's mental qualifications will be far more helpful than filling him with facts. Such a problem as to whether i t would be advantageous for a company to go into the manufacture of acetic acid has, besides the ordinary questions of raw materials and sales possibilities, the inquiry into how acetic acid is to be made in the future, the situation of the wood distillation industry, menaced on the one hand by synthetic acetic acid from calcium carbide and on the other hand by synthetic methanol made as a by-product either from the same carbide, from butanol or from ammonia. The problem therefore involves an estimate of the future of these industries, as well as the probabilities of synthetic manufacture of acetic acid not only from calcium carbide but from acetylene from other sources, from methane or alcohol. The interest is enormous. In each subpart of the question investigation and decision play a part.
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Let us take, therefore, the general outline of a case in the actual practice of commercial research as applied to the chemical industry. Ideas for investigation may be of many sorts: they may deal solely with production, may involve new processes for manufacturing, new uses for products involving research and market studies or new products themselves, either related or unrelated to the present ones. In fact new products involve practically all the branches of commercial research. The quest for new ideas dominates development. As older products become more standardized and therefore approach the conditions of staples there is a constant pressure for new thmgs where a greater margin between price and cost may be enjoyed. Here is where commercial research can senre. Attuned to sense market and industrial trends, in contact with other development leaders and familiar through constant peading of the current technical literature with modern tendencies, the commercial research worker is best in a position to supply that stream of ideas which is the lifeblood of development. Suggestions from both research and production staffs should be stimulated to swell this stream. Many new ideas are obtained from outside proposals and from consultants retained in the various fields in which they are specialists. Assuming that the project involves the manufacture of a new product, a study must be made of raw materials, their location, cost, and quality, the dependability of supply, and the diversity of suppliers. For this is needed an armament of statistical information gathered from government bulletins, technical publications especially in their yearly reyiews, trade associations, consultants, and private sources. All lead to a determination of the advantages of the company with reference to its competitors. Next, marketing conditions must be determined. The quantity that can be sold and the price that can be obtained iix the size of the operation. The sources of information except for individual contacts with consumers are the same as those above since, for the most part on this field, the finished product of one manufacturer is the raw material of another. The effect of competitors and their relationship has an important bearing and sometimes stops the problem a t this point. An important guide to further investigation is the determination of the quality necessary for the market to be reached or conversely, the market which can be obtained for a certain quality. Most important is an intelligent estimate of future market trends in the field: is the consuming industry a growing one, does it show any signs of moving to locations less favorable to the marketing concern, will the product in question continue in use or be displaced by another? These questions call for intelligent guessing, not the least important function of a commercial research department. Having fixed raw materials and markets it is usually possible to calculate roughly costs, investment, and possibility of profit thereon. If these are
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favorable, the project is given over to technical research to establish the details. Here often hidden causes of failure are brought out especially in the pilot plant or half-large scale stage. When the technical research can put together the necessary information, the engineering department designs the plant and makes an estimate of its cost. At this point the correlative function of commercial research comes into play. All the factors are in hand for a detailed recalculation of the rough costs first made out and the compilation of a final report to the management. This final report, the peak of all this striving, should show why the company should be interested in the product in question, how much can be sold, the cost of manufacture, the investment required, and the expected profit on that investment, and lastly the risk of technological obsolescence. Too much stress cannot be laid on completeness with brevity and on the handling of technical subjects with English intelligible to the usually nontechnical executive. From this complete example-and many investigations are cut off far short of this completenessmay be easily deduced what the student entering commercial research should know. His course should contain, besides the elementary inorganic chemistry, qualitative and quantitative analysis, organic, theoretical, and physical. His study of economics should lean particularly to marketing and statistical analysis. For accounting he must know the mechanism and lipitation of cost calculations and the intelligent judgment of their assumptions. Facts should be acquired concerning the costs of such things as &em, power, water, and so forth under different conditions. Critical reading of financial statements is necessary in the estimation of competitors' possibilities or in reporting on possible purchases. Lastly as the material aim of commercial research is a report, clear concise English of good quality will aid in selling the idea to the executive for whom it is prepared. Education, then, should begin with the raw material of personality and build into that personality a fair proportion of the characteristics which have been mentioned. The desire to know must be aroused; in this as in other fields is required continuous study and wide-awake knowledge. Certain tools are necessary: chemistry, economics and accounting, imagination to grasp ideas and to sense their commercial value, initiative to carry through investigations, diplomacy to correlate the various investigational activities, and sales ability to convince the management. These things accomplished, particular facts will be taken in the stride.
