Recognizing the Upside of Product Stewardship
What level of investment should companies make in product stewardship? The answer depends on how you look at product stewardship.
“Product stewardship has a financial impact when it fails and there are product recalls. That’s the first motive for companies to put in a product stewardship program,” says Jim Romine, president of the Research Institute for Fragrance Materials. “But that’s only looking at it from the downside.”
The problem is that when companies only invest the minimum to avoid downside risk, they don’t take advantage of all the value product stewardship can offer. This is because if the program is successful, executives won’t ‘see’ it. “When success is the absence of failure, people forget that they’re investing in something not to happen,” says Romine.
He argues that there’s also an upside to investing in product stewardship, one based on a program’s contribution to competitive advantage. Instead of a ‘play not to lose,’ approach, Romine wants companies to quantify how product stewardship activities affect market share, pricing power and new product development. “If you want to fully appreciate product stewardship, you use it as insight into customer needs,” he says.
When product stewardship programs are connected to the right processes in a company, they become a source of strategic advantage. For example, even though traditional product development processes address customer demands for functionality and price, ultimately the product might not be accepted because of societal expectations. Effective product stewardship programs anticipate societal needs as they manifest in government, NGO or customer advocacy. They offer customer insight that might not otherwise be captured. “If product stewardship programs don’t take that responsibility or if they’re not seen as a source of that information and are not connected to the product development process, then you lose that insight,” says Romine.
You can read Romine’s assessments in more detail in Realizing the Full Business Value of Product Stewardship, a book recently published by the Product Stewardship Society. Romine authored the chapter “Competitive Advantage.”
My goal is for companies to recognize product stewardship is an investment that needs to have a return,” he says “I articulate that as product acceptance from a societal standpoint. Product stewardship asks what do we see in the marketplace that would prevent it from being accepted?”