Contending with Change – The Future of Product Stewardship
Barely more than a decade ago, product stewardship meant protecting people and the environment, along with ensuring regulatory compliance. That still is the case, but the profession has evolved to include new responsibilities, said Rob Shimp, president of TightLine Answers.
Shimp, who spent 28 Years at P&G before becoming a consultant, talked about that evolution during Beyond Compliance – Managing the 21st Century Challenges of Product Stewardship, a session at Stewardship 2015.
One change is the variety of additional commitments to industry and shareholders, he said, which includes meeting new market and business expectations. “The market expectations for safety and environmental stewardship and regulatory compliance also have increased dramatically in recent years,” he said.
One driver is lack of public confidence. “There is a very real erosion of public trust in both industry and government to do the right thing,” he said. The result is increasing regulatory expectations globally and greater transparency in global supply chains.
All these changes signal a new paradigm that will affect how companies think about stewardship, Shimp said. The first is a movement among consumers from risk-assessment-based decision making to one focused on avoiding ‘hazardous’ or ‘toxic’ chemicals. Another movement is toward a right-to-know attitude, with the expectation of full disclosure of all ingredients. The third movement is from the ideal that all products should be safe to a model in which customer and consumers should have the right to choose ‘safer’ products. “These have shifted the landscape dramatically the breadth and depth of stewardship,” said Shimp.
The Consequences of Change
The shift to new ways of doing business come with economic costs. The expectations of increased regulatory compliance means additional staffing, for instance. Likewise, the demand for information involves a complex balance between cost and protecting intellectual property. The impacts of these costs are a concern to companies, said Shimp.
From a product stewardship vantage, a misstep can destroy a brand’s reputation quickly. Shimp cited consumers concerns with BPA as an example.
Issue and Crisis Management
Shimp offered a cautionary tale to illustrate how product stewardship has evolved to include public outreach and crisis management on a level never before experienced. In 2010, P&G launched a new diaper. Since 1987, the absorbent core of disposable diapers has contained purified paper ‘fluff’ and a highly absorbent gel (AGM), he said. The core keeps the skin dry and helps prevent diaper rash.
The new diapers contained a redesigned core that nearly eliminated fluff. It used the same AGM, but the new design enabled it to work better. The new diaper was more absorbent, slimmer, better fitting and used 10 percent less materials, said Shimp. He also cited that the diaper had been tested more than 1 million times in homes during development.
When it first launched, the diaper was well received. Before long, however, a small group of consumers began advocating for the old diapers to be brought back to market. They launched a social media campaign accusing the company of making changes to save money and claimed the new diapers caused more diaper rash. The Consumer Product Safety Commission received 4,700 complaints, and the media ran with the story.
Ultimately, the CSPC found no cause linking the diapers to increases in diaper rash and dismissed the complaints. The business recovered, Shimp said, but not before a loss in sales in the tens of millions.
Shimp told this story to attendees and then offered some takeaways from the experience:
- People care a lot about the product that they use. Don’t underestimate how much they care about the current product.
- Many people don’t like change, whatever the change is. Whenever P&G made a change, their phones would light up with people wanting to complain, he says.
- Your next big ‘innovation’ might not be your customers’ idea of good thing.
- Babies matter a lot. Never underestimate the power that the topic of children’s health has on the market.
- Never underestimate a highly motivated critic in a social media world.
- You have to have strong reputation and a strong facts to be successful. It also helps to have ongoing relationships with advocates who can help defend inaccurate claims. “One of the many mistakes that companies make is to have an expert for a crisis, and then you never talk to them again until the next crisis.”
Finally, Shimp warned attendees about pretending that all of this is a short-term trend. “Transparency is not going away,” he says. “The expectations for disclosure are not going away.”