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Global Warning

Innovative processes, not just products, are targets for activists.

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Global innovators are challenged by an intensifying commercial challenge not only to create new products, but also to justify the processes they employ to produce those products.  Colorful cosmetics that make us prettier are wonderful; cruelly testing them on animals is not. Creative fashions made of affordable new textiles are terrific; ruthlessly exploiting third-world child labor to produce them is not. Herbicide-free grains and vitamin-enriched vegetables are healthy innovations; unless, of course, they’re the wicked Frankenfood monstrosities of recombinant DNA.

Processes, not products, have become the prime targets of activists, regulators, and litigators who recognize that the most cost-effective way to disrupt the introduction of a new kind of technology is to shatter the vital links of its supply chain. Global innovations no longer compete purely on features, functionality, and price; they compete on the global processes that create them. Because the manufacture of novel products can require novel processes, the most innovative companies prove particularly vulnerable to the most inventive activists.

That means successful innovators had better be clever and comprehensive about their marketing of both how they innovate and what they innovate. The tale of genetically modified foods in Europe, the United States, and Africa offers a perfect case study in the pitfalls of process-marketing mismanagement.

Bitter disagreements over genetic modification on both sides of the pond make intercontinental disputes concerning the United Nations and the environment look tame. Europeans have been consistently hostile to the introduction of genetic engineering into the food chain. They say genetically modified foods are innovations that represent the unknown, the untested, the unsafe, and the inherently unnatural. A coterie of French chefs has organized public boycotts of genetically engineered foods in their restaurants, and these chefs have encouraged other fine dining establishments across the continent to follow suit. Indeed, activist Europeans have had an effect. Several African countries have refused genetically modified seeds and foods from the United States, despite chronic food shortages that threaten the health of their people. The coordinated opposition to such processes and products is as global as any multinational corporation.

By consistently lobbing clumsy responses to public criticism, such genetic-engineering pioneers as Monsanto have been the nascent technology’s own worst enemies. These companies have placed themselves in the awkward position of arguing that their new processes don’t fundamentally change the products-as if manipulating the molecules of a tomato to extend its “freshness” doesn’t really change the fruit. A large part of the industrialized world-literally and figuratively-isn’t buying it.

Indeed, the purveyors of genetically modified foods have been so thoroughly demonized that they now seek regulatory protection worldwide, and they are fighting all efforts that would force their customers to disclose whether they use any genetic engineering in their products. In other words, what might have been seen as a “feature” in an altered tomato is being regarded as a “bug.” Opponents of modified foods dismiss the notion that genetic engineering might allow for foods that are less expensive, more robust and every bit as safe and nourishing as so-called natural products.

No simple or obvious market solution exists for the innovators of genetically modified food or for any company looking to tread new ground in any industry. Much like companies that are obligated to comply with international process standards to signal their investment in quality, innovators are also being challenged to more fully disclose their compliance. A software company might produce better, faster, and cheaper products by outsourcing its development to Russia, and that’s information many key customers may want to know. The Pentagon, for example, might look askance at certain security subsystems’ being coded and tested in St. Petersburg. Perhaps public school systems will be precluded from acquiring PCs whose motherboards were produced by underage laborers in Malaysia. Soccer moms may want to avoid purchasing cosmetics that were tested on animals.

To the extent that human rights, economic development, and public safety issues might become purchasing criteria of early adopters, innovators will have to focus both time and care on assuring critical consumers that the integrity of the processes match the value propositions of the technical developments. Innovators now need “process” marketers to complement their “product” marketers. The dark underbelly of the processes that generate a brilliant innovation may ultimately subvert its success in the future marketplace.

For companies that aspire to global reach, branding their processes will matter as much as branding their products. Treating supply chains as separate and distinct from the products they create will be impossible. Innovators beware.

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