CCDA AWARD ADDRESS JOHN P. COE Naugafuck Chemical Div., U. S. Rubber Co., N e w York, Ν. Υ.
The Unseen Element The experience of the past w a r a n d the defense effort have demonstrated the effectiveness of chemical development in national mobilization
X HE insignia of the Commercial Chemical Development Association emphasizes the concept that commercial chemical develop ment involves three elements of our ac tivity; namely, research, manufacture, and sales. I think there is another element w e must consider and that it dominates those three. I have chosen to call it the unseen element in commercial chemical develop ment. Let's take a chemical which is familiar to all of you. It is called polyvinyl chloride and its history is that of a successful com mercial chemical development. What do w e know definitely about this chemical? First of all we know its chemical name and if we are reasonably good chemists, w e can write its chemical formula. W e also know how to make it, starting with the natural resources, petroleum, coal and salt. W e know in anybody's kind of arith metic how much it costs to make it and w e know how much money it will take to build a plant to produce it. W e know how much that plant is likely to return on its capital and w e can write a financial story that is clear to an investment banker. W e know it sells for 3 8 cents per pound in this form and that around 4 0 0 million pounds will b e produced this year. W e know a lot about h o w it can be used, h o w it can be compounded, plasticized and stabilized. W e know also, in considerable detail how to process it b y calendering, ex trusion, casting, spreading, and molding. These are all familiar considerations in volved in the successful development, manufacture, and use of this chemical. They fit a well-known pattern of technical and economic procedure for commercial chemical developments. But there is an unseen element—an u n predictable factor—one that is not described by any definite rules or charts or text books—and it has made this chemical a useful, profitable product. This unseen element is people. T h e success or failure of commercial chemical development lies with people— the people behind it, the people with it, and the people in front of it. People are complex. T h e y are emotional as well as chemical. Their will is more important than their physical capacity. Their caprice follows no formula, accord ingly, successful development requires an increasing awareness and a greater study of t h e people involved in it. W e must add
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to our technical and professional expertness an unselfish interest in and, above all, a sympathetic understanding of people. Let us consider four groups of people with whom development people are in volved: The people who make the chemical products. The people who put up the capital. The public. The people in Government, which in cludes all people as citizens. First let us consider the people who develop a chemical product, who make it and who sell it. Of fundamental impor tance here is the point of view—the point of view as a company or as a board of management, or as individual production managers, sales managers, and develop ment managers. Commercial development is an atmosphere in which men and com panies live and progress through new ideas. You cannot have a detached individual or group of individuals getting anywhere with commercial development unless all the rest of the organization is assisting, not only willingly but constructively and aggressively. T h e combination of a little effort by a lot of people is far more effec tive than the concentrated effort of one man. I deplore the military terminology which employs proper names for groups of people as Research, Production, Engineering, Purchasing, and Sales. That terminology implies that each man sticks to his depart ment and pays little attention to anything else that is going on in the company. It suggests that all of the coordination is provided by some master mind at the top. Of course I favor continued improve ment of the techniques and tools involved in successful new product development. I believe also in concentrating the direc tion of development work in a man or in a group of men. Furthermore, the develop ment man must lead the organization in the field of new product development but he must have assistance from all parts of the organization. More than that he must have inspired contribution. The commercial development man him self must be possessed of that intangible quality of developmental ability which drives him on to success regardless of obstacles. He must never b e merely an analyst and commentator. He must be the eternal spark for the whole organization
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in their commercial development program. That is one way to tap this unseen element. The second group of people w e must consider, although usually they are un seen in our development activities, are the people w h o invest money in projects. It is all very well to write a beautiful report with competent market studies, cost analyses, profit forecasts, and financial recommendations but these are not quite enough. Investors are people also and they need to be steamed up a bit. They must be made enthusiastic about the products we are trying to promote. W e must study the merit and appeal of our proposals from the viewpoint of the investor, who is probably not a chemist at all. T h e company may feel sure it will always b e able to attain positive achieve ment because there is a huge area of un disclosed wealth which year by year re search will uncover, but the investing pub lic cannot be expected to take these con clusions on faith alone. It is probably true that, more than any other, the chemical industry has found the 'way to create for itself and for m e n everywhere illimitable frontiers and that a large segment of the investing public has accepted this idea. Nevertheless, continu ously and dramatically, this point of v i e w must b e presented to the investor because increasingly from him comes the capital needed for expansion. It must come from him because w i t h operating profits distributed perhaps 7 0 % for taxes and 15 or 2 0 % for dividends, there is not much left to b e plowed back for expansion. It is to t h e everlasting credit of our industry that despite this extreme state of affairs, it is able somehow or other to find ways to finance its growth. However, any success that has b e e n had in the past or shall be in the future depends on our understanding of investors —not merely as measurable pools of dollars but as the unseen element, people, w h o are influenced not only by reason but also b y emotion. For a third group, there are the people who are exposed to our products. Sooner or later, directly or indirectly, products must become consumer goods. Even though a company may manufacture only chemical raw materials for other manufacturers, nevertheless they or their customers will b e producing consumer goods out of the chemicals. The chemical industry has not con-
1963
sidered carefully and thoroughly enough the public reaction to new chemicals and chemical products. There is an uncertainty on the part of the public which we do not anticipate and do not r>rovide for adequately in our development programs. No one could possibly have anticipated the acceptance by the public of the many consumer items which have been made from polyvinyl chloride. For example, consider decorated film made for drapery purposes. Perhaps many years ago in the twenties when the research on polyvinyl chloride was young, someone envisioned possible uses of the chemical. However, 1 insist that no one could possibly have known in advance how well Mrs. John Q. Public would like it. If she had not liked it, she would not have bought it, and it would never have been produced. Because she likes it and because she likes a thousand useful and decorative articles made of polyvinyl chloride, the successful development has been achieved. This is an exact illustration of the unseen and unknown element in commercial chemical development. Now, in addition to the acceptability of products, there are other considerations which must be borne in mind when we are dealing with the public. As an example consider the agricultural chemical. We are all familiar with the toxicological tests and other extremely detailed studies we make to assure ourselves that the chemicals we are offering are not harmful to human beings. Yet despite all our work along these lines, we are acquiring more and more stringent regulations, both state and federal, forbidding us to sell such chemicals that may come into contact with food until after the Government has approved. These regulations are a symptom of public uncertainty. They indicate that we have not educated the public long enough and thoroughly enough regarding our manufacturing processes and the nature of our products and the thousands of ways in which they perform useful and beneficial services to mankind. From knowledge comes understanding and from understanding come confidence and respect and friendship. Investigations into air and stream pollution constitute other symptoms of uncertainty on the part of the public. We must concentrate more and more on making friends for our industry and it will take time. As Voltaire said: "You can hardly make a friend in a year but you can easily lose one in an hour." You may call this advertising or sales promotion or public relations, if you will, but it bears importantly on commercial chemical development. It is part of the element often unseen in the laboratorypeople. The fourth group are people in Government. Here is a quotation from the translation of a book written by a Frenchman on "Democracy in America" and it has a direct bearing on the people in Government: 1964
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"There are at the present time, two great nations in the world which seem to tend toward the same end, although they started from different points; I allude to the Russians and the Americans. The AngloAmerican relies upon personal interest to accomplish his ends, and gives free scope to the unguided exertions and common sense of the citizens; the Russian centers all the authority of society in a single arm: the principal instrument of the former is freedom; of the latter, servitude. Their starting-point is different, and their courses are not the same; yet each of them seems to be marked out by the will of Heaven to sway the destinies of half the globe." This was written by Alexis de Tocqueville after his visit to America in 1835—117 years ago. I wonder if h e would write those same sentences today or would he detect a dangerous trend in this great nation of ours away from freedom and toward servitude. We have here a matter very important to us because commercial development is a child of free enterprise. Let us consider two examples of the problems we face in our own industry which bear on this matter. The first is Government-sponsored research. We of the chemical industry are essentially free enterprisers and we like to do our own research and take our own chances on success. However, in recent years there has developed a philosophy that research should be done at public expense. And so at the present time, the Government is spending on research nearly twice as much as industry and universities combined. Furthermore, about half the federal expenditures are against contracts with industrial laboratories. This means that within our own establishments about half the research we do is for the Government. The results of such work in varying degree belong to the public and therefore are not first-class bases for private commercial development. Perhaps we get just about our moneys worth, having paid about one-half the cost of such work. Corporations pay half the income tax. C H E M I C A L
Government Ownership The second example is Governmentownership of industry. Twelve years ago, the chemicals used in synthetic rubber were just entering commercial development in this country. The onset of war made it necessary to forego the usual commercial development considerations and to start full blast on operations requiring a total investment of $750 million and to produce annually $3 to $4 million worth of end products. It was too big for private industry t o handle that fast although as 1 look back now I am sorry we did not try harder to do it. The program itself was a good program and well handled and the war needs were met. But the dangerous point is that seven years after the war, the Government is still owning and operating the business. Every two years, Congress has said that, of course, the best defense security r e quires a privately owned synthetic rubber industry—but not yet. The President is now recommending still two more years of Government ownership and others talk three years more. Synthetic rubber is a great chemical development—but it is not commercial. It has never had to stand trial by competition. It has never had to pay income taxes or to provide dividends for its capital. It is an athletic young man still walking around in a baby's toddler. It can walk alone and I'd like to see it tried. But you cannot try it free-enterprise fashion against a government monopoly. When the Government establishes a monopoly, it really does it. The chemical industry bought the styrène plants and expanded them and kept them busy making plastics. They established the best possible position for styrène from a defense standpoint. The same can be done with synthetic rubber. The same should be done with synthetic rubber. I said this has to do with people in Government. It does. We have government-sponsored research and government ownership of synthetic rubber not because of the obstinacy of government officials (Continued on page 2049) A N D
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but because too many American citizens 4240 KAHAWHA ΓΡΚ., SO. CHARLESTON,V VA., have forgotten t h e importance of continu ing a n d strengthening our American sys "SPECIAL GLASSWARE" tem of free private enterprise. If Abraham Lincoln's objective is to b e maintained, W e specialize in constructing glass then t h e Government is by all t h e people apparatus m a d e to fit your speci fications. Inquiries invited. Esti and not at all b y those elected or hired to mates furnished. carry out t h e will of the people. AaHaBBBBBiBBa E. MACHLETT & S O N I still believe in the idea of t h e Yankee 2 2 0 East 23rd St. N e w York 1 0 , Ν . Υ. town meeting which w a s t h e foundation of our system of Government and I expect STAINLESS STEEL T A N K S to keep on believing that t h e people as a whole arc doing t h e governing. This means Brand that w e must carry our case not t o govern NEW! ment officials but directly to the American Clean— citizens. Perfect We see again that commercial chemical Condition development is a matter n o t only of re Type GI—18 gauge (.051'0- Rated 400 PSI— }4 inch search and manufacturing a n d selling prod IPT at each end. Wt. 18 lbs. Special price, any ucts b u t of understanding and leading quantity $14.50 6" χ 24" stainless steel—$7-25 each. people—the unseen element in our pro 6" χ 24" carbon steel —S6.25 each. gram. STAINLESS STEEL CYLINDERS Type Λ-4. Size 5" x 8". 104 cu. in., rarcd 400 PSI. Commercial chemical development is One }4" P'pc connection. Wt. 1 ^ lbs....54.75 each. Furnished in carbon steel, $400 each. not all test-tubes and market studies and All prices f.o b. Chicago. Write for quantity prices. cost analyses; it is also a problem of people. WELL W O R T H S JR ADlΝG CO. 1832 S. Wabash A v e , DEPT. CEN, Chicago 16,111. W e must a d d to o u r special skills a greater knowledge a n d awareness of people—their habits, their character, and their emotions. They are all too often rirteen types to meet any requirement. overlooked—many times unseen—but they White porcelain, chemical stoneware, are always there. carbon metals and alloys. In t h e words of Kipling: "Something hidden. G o a n d find it. Go The U. S. STONEWARE CO. 6 2 E. 4 2 n d STREET NEW YORK and look behind the R a n g e s Something lost behind t h e Ranges. Lost and waiting for you. G o ! "
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THE two papers above wore presented at thr Symposium on Organized Commercial Chemical Development, held March 20 in New York City. Other papers given at the symposium have been published in the previous two issues of C&EN.
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