Conversation Series: Bruce Miehle, Dow AgroSciences

EDITOR'S NOTE: As part of Lawn & Landscape magazine’s exclusive conversation series, Cindy Code, group publisher of the Lawn & Landscape Media Group, spent some time with Bruce Miehle, a Dow AgroSciences general manager, at its corporate headquarters in Indianapolis. These interviews are not designed to provide the history or background of a company, rather to examine how the people at the helm of uniquely successful companies have steered their firms into leadership roles in the professional lawn and landscape industry.

Bruce Miehle, general manager of the turf and ornamental and technical products division of Dow AgroSciences is a career company man.

In a career spanning 25 years, Miehle started in a field sales assignment in 1973 in Dow’s Charlotte sales office selling everything from animal health to farm chemicals to right-of-way products to pest control to mosquito control.

Miehle, who has his bachelor’s and master’s degrees from The Penn State University in agronomy and soils, and plant pathology and physiology, respectively, has experienced all aspects of Dow’s corporate and field offices as he moved through a variety of positions in field sales, research and development, product development, product marketing and district sales management.

He was named business manager for specialty products when DowElanco formed in 1988 and oversaw financial planning, business strategies and molecule planning.

Over the years, Miehle provided integral insight to both the crops and non-crops businesses before tackling a more global role as part of the company’s recent Business Effectiveness Initiative. This BEI turned Dow AgroSciences into a global business management organizational hierarchy for the purpose of molecule and asset management.

Today, Dow AgroSciences sells several hundred millions of dollars of urban pest control products globally, and Miehle serves as its general manager of turf ornamental and tech products business.

Q. Your specialty business has gone through a number of changes in the 1990s. First, the strategic alliance between Dow and Elanco and now the buyout of Eli Lily’s share of DowElanco. How will the new structure work into the next millennium?

A. The move resulted in more financial and general control on Dow’s part and created internal streamlining and operational efficiency. We can do things a little more quickly. I don’t think it necessarily preordains a better agriculture business, with one small caveat. I do think there’s a more highly integrated venture into biotech as a result.

Dow had its own interests in terms of technology and financial commitment in the output side of biotech, and DowElanco was focused on the input side of biotech. Now, there is a much more coordinated and consolidated thrust in biotech.

What does that mean for the turf and ornamental business? In the short term, very little. Long term, perhaps quite a bit. Obviously, we’re faced with a lot of problems based on the perennial nature of turf and many ornamental, nursery-type crops.

I don’t think this business is on the front page of any biotechnology company’s strategic plan. They’re more interested in Roundup tolerance in major row crops and corn root worm resistance. But down the road, when a lot of these cutting edge technologies become more commonplace, it’s logical to think biotechnology is going to be a factor in the professional turf industry.

Q. How is DowAgroSciences dealing with the regulatory environment specific to the Food Quality Protection Act and the threat to organophosphates?

A. I would be naïve if I said everything was just fine. It’s a big challenge. You don’t have to read very much to accept that. I know we have made and continue to make a huge commitment of resources in terms of people and expertise in dealing not only with the science and technology of the issue, but also its politics. This is at least as political as it is technical and regulatory.

We’ve had good experience this past year with a few technical victories as well as some response from grassroots efforts through a network of affiliated trade organizations.

We think we have a reasonably good track record dealing with other issues that perhaps haven’t looked very positive at one point in time. The best reference I can cite is the experience we had with 2,4-D in turf. If we were to wind a clock back six to eight years, take a look at the battle we were confronting with 2,4-D use in turf and ask people to project our probability of success in sustaining the use of 2-4-D, a lot of people might have said 2,4-D is history. Yet, we’ve been able to sustain 2,4-D.

What I suspect, and I’m a little bit hopeful on this, is that there will be some some minor changes in organophosphate registrations and some of that will include Dursban. Thankfully, we have very exhaustive science behind us; the technology is sound. We believe, ultimately, that good science will at least partially prevail. Will it be a slam dunk? No. But we’re going to be selling Dursban for a long time, I’m sure of that. Will we come out of it with modifications on protective clothing or repeat applications? Or will there be some other kinds of mitigating stipulations? Probably.

Q. Is there a number one leader in turf and ornamental control products?

A. I don’t think there is a clear leader. There are several market leaders that are all pretty close, and we’re in the mix. Depending on how you characterize the participation in the global market, you could argue that certain suppliers are the biggest because they sell their brand direct to consumers.

If you go to Europe or parts of Latin America, a couple of our basic manufacturer competitors sell their own brands to end users. We have chosen not to. We’ve chosen to market our own brands to the professional trade. In the consumer trade, we use the brand marketers and formulators that supply those channels. It works well for us.

It’s a balancing act. We think we’ve struck a good balance of engaging formulators where they can add value and do things more effectively than we can do with some of our active ingredients.

This is particularly important in most segments of the turf and ornamental business because granular products are pretty popular. The lawn care trade has gone to a lot of dry applications as compared to when the ChemLawn tank trucks were popular.

We see the people that have a position in fertilizer as gaining in market strength. They add value both for us as a supplier in creating a delivery system for some of our active ingredients and in providing value for the end user because the convenience of applying both fertilizer and pesticide at the same time is undeniable.

Q. Do you sell direct to the largest end-user companies in the industry?

A. Not really. Basically, we sell through distribution and the formulation trade to this segment of the business. We used to sell direct to a number of companies, but for a number of reasons we got away from that. Not the least of which is this trend toward dry formulations.

A few years ago we went through one of these painful channel rationalizations and decided to consolidate. We established a new benchmark for a direct buying relationship and designated some master distributors and master formulators to supply some of the small regional independents.

Q. Distribution can be fragmented in the turf and ornamental industry. Does LESCO have the right idea of selling through it’s more than 200 service centers?

A. If you believe the response from the trade and their sales growth, you have to say it looks like they’re headed in the right direction. The key question, I think, is how much is the trade willing to pay for that convenience? Everybody wants to minimize inventory. They want to be able to get and use products and equipment as close to its actual time of use as possible to manage their working capital.

Q. You were responsible for establishing Dow AgroSciences’ global urban pest structure and authoring the first global urban pest strategy, completed in the spring of 1998. What were the two main goals and priorities that came out of the strategic plan?

A. We had two main themes. The major theme and strategy I was responsible for was adaptation and change management and preparing people for that. That was significant. The other theme that we still wrestle with is how to optimize our business (for our shareholders) given the number of products that we have while doing the best job of servicing customers.

The natural tendency is to try to be all things to all people, therefore we have had a broad portfolio of products. Some of them are strong brands. Some of the others we decided to divest because they have more value to somebody else than to us.

Gaining acceptance for the need to optimize our portfolio was a major challenge. That work is not done, and it involves not only in-depth analysis of numbers and technology, but also what I call weighing in organizational dynamics. It’s hard to go to somebody who’s been product manager of product X and say we’re not going to sell this product anymore, but give it to somebody else who’s going to do a better job with it. Those are hard internal things to do.

My guess is when I leave this job, we’ll still be debating whether we’ve got it right or not. What is the right number of products for a basic supplier to have in a portfolio? How big do they need to be to be value adding? How big or how good do they need to be to be attractive to customers? What can we manage effectively? How many products can a field salesperson or marketing person really effectively manage? How many can we afford to promote?

Q. Dow AgroSciences has agreed to give Riverdale Chemical exclusive rights to some of its active materials to formulate products for broadleaf herbicide control. Is your relationship with Riverdale an example of the outsourcing of your products?

A. Yes, and it’s a unique partnership. We think it is a tremendous development for ourselves and for Riverdale. It’s a good example because a couple of the actives they are incorporating into their portfolio would be difficult for us to handle effectively. However, they have the expertise and formulating capability and, for that matter, access to other molecules that they can mix with our molecules. Plus, they can adapt the amounts of various components of the mixtures they make to regional preferences and regional needs. That’s working very well.

Q. How do you see the role of a basic manufacturer in the next five to 10 years?

A. One of the major roles that a research-based, multinational company will play in this business is being the conduit or window to some of the advanced technologies being developed for agriculture, including biotech and instrumentation.

There’s a lot of instrumentation being developed right now, first and foremost for row crop production to instantaneously detect soil fertility, pest infestation, soil moisture, temperature, humidity, crop maturation, etc. This is fed into a computer database that allows users to adapt their cultural scheme to produce more corn.

That will be one role a basic supplier will play. That is a little bit more than the role one might expect of a formulator and fertilizer supplier, but I really believe that the research-based, multinational companies will be the interpreter and brainstormer of applications of new technology in the turf and ornamental trade. Of course, some of this will happen long after I’m gone.

Q. As a basic manufacturer, you not only spend hundreds of millions of dollars bringing product to market but in defending the continued right to use pesticides. Are the prices you’re charging for today’s pesticides significantly more expensive than 10 years ago?

A. In terms of equalized dollars, products today are cheaper than they were 10 years ago. End users have access to some innovative technologies that might cost more, but along with that comes value enhancements or some other aspect that makes it worth more such as convenience, environmental profile, dose rate, etc.

Q. With the cost/price issues faced in the lawn and landscape industry, how far off is this global instrumentation?

A. A lot of people work day-to-day in the professional lawn care business that struggle with those competitive dynamics. I don’t disagree with the perception that the lawn care trade is a highly cost competitive and price competitive marketplace. I don’t know what we’ll do to break out of that syndrome.

Occasionally, we see signs that truly unique features get embraced by the leading edge companies. There are some very profound forces at work on what those service providers do. Not just cost or convenience; it’s the environmental and social acceptability of what we do. The weight we place on product safety, both in terms of toxicology and environmental impact, weight heavily in investment and staging through the product development process.

Reality is that it’s now possible from a technical standpoint to get good performance without having to tolerate unacceptable toxicology or environmental characteristics. This gets more and more possible every year. As capabilities improve, public expectations come with it.

Q. Will we see more consolidation among basic pesticide manufacturers?

A. What’s happening as consolidation takes place is that companies are inheriting an interest in the non-crop market. Before, when there were 15 research-based, multinational companies, a small percentage of them either by luck or by commitment had a major play in either pest control, lawn care, golf courses or turf and ornamental.

The remainder either had no interest at all and took whatever windfall came their way or, in some cases, outsourced that technology and had someone else do it. Or they took whatever came their way and probably suboptimized their participation.

Now, as companies consolidate, company A, who had mostly no interest in this business, buys company B mostly for crops business, some overseas operation or manufacturing capabilities, and finds that company B has a position in pest control or lawn care. The new mega-company is probably going to maintain a position in that arena.

If you believe the conventional wisdom that after the next five to 10 years there’s only going to be a handful of major multinational companies, they’ll all be $4-billion- plus type companies. I think every one of those companies will ultimately have a play in the specialty/turf and ornamental/pest control business.

Q. Aside from biotechnology and consolidation, arewhat other significant trends you see affecting the contractor’s business?

A. A big trend is social accountability. The trade is dealing with a lot more of the right to know aspect of doing business with the public. Consumers want more information. They’re pursuing the legal and regulatory routes to make sure they get it.

Twenty years ago, the trade didn’t want to share information with customers, and customers didn’t want to know.

Q. Is it the job of a supplier to train and educate the end user?

A. I think it can be. If you bring new technology to market requiring training, along with it comes an implied responsibility to do that training. For instance, some of the breakthrough technology hitting the market now is not just a better active ingredient plugged into a 4-pound emulsifiable concentrate, but something really novel and frequently, a new delivery system.

If we introduce a highly integrated system that is not part of the end- user’s existing technical base, then we need to train them or provide a mechanism for somebody else to do so. And this really requires a fairly high level of business intimacy and understanding of where your customers are headed.

Q. What is your management style?

A. I delegate a lot. I like to give people a lot of room to make decisions. I don’t think I abrogate, I think I delegate. When you’re in a role where you have to set vision and overall strategic direction, it helps. People know when I give praise it must be something special, because it’s not my style to lavish so much praise that it cheapens it.

For the most part, I think it has made me successful. But I won’t argue with anyone who says there was also a lot of luck.

Q. Who are your mentors?

A. Unquestionably, Dick Holzschu is my mentor. Dick retired from Dow AgroSciences in March. I learned a tremendous amount from Dick.

We have been very fortunate in our business here. We’ve garnered more than our share of good people. I think there was a gravitational pull that quite honestly was caused by Dursban. As a product, Dursban made us a market leader. I’m not sure what came first, whether we did a good job with Dursban or whether Dursban was a good enough product it made us do a good job and other things came along afterward.

We developed the resources almost as a reaction to the success we were having with the product, not vice versa. Once that level of expertise and commitment to the business gets established, along comes the expectation and the dedication to maintain that level of performance and expertise and commitment.

The author is Group Publisher of Lawn & Landscape magazine.