Paul Holmes 03 Sep 1991 // 11:00PM GMT
“As the chairman of a company that produces pharmaceuticals, agricultural chemicals and food ingredients, I have often been quoted as saying that Monsanto is a public affairs company that happens to sell a few products," Richard Mahoney told guests at inside PR's awards dinner earlier this year. "What that means is that without success in the public policy arena, there is no chance for success in the market place."
Mahoney, chairman and CEO of the St Louis-based Fortune 100 company, is one of a handful of senior corporate executives who has articulated one of the key realities of business today: that public relations—as a broad discipline that works to create a favorable environment in which an organization can operate—must run ahead of traditional marketing, and even ahead of many processes and product developments that are at the heart of a company's activities.
Moreover, he is one of an even more limited number who appears to appreciate that for public relations to have the desired impact, a public relations mindset—one that is ever mindful of the organization's relationship with the society in which it operates—must permeate every layer of the company and all its actions and communications, internal and external.
A glance through a recent edition of Monsanto's in-house journal, Monsanto Magazine, provides some evidence of just how pervasive the company commitment to this way of doing business is. Articles include Mahoney's own musings on how environmental awareness can create a competitive edge; an examination of the company's determination to achieve zero waste; a highly personal account of one executive's experience in a company-sponsored course that teaches racial and sexual sensitivity.
At Dick Mahoney's right hand through Monsanto's conversion to this rather radical business philosophy has been Dan Bishop, Monsanto Chemical Company's director of corporate communications. Bishop has been with the company for more than 25 years, and survived more than five CEOs, and can remember a time when Monsanto was not as clear-sighted in its public relations strategy as it is today.
"I think a consciousness of the role of public relations grew within Monsanto as the whole environmental issue grew more important," says Bishop. "As the Environmental Protection Agency grew more powerful, and created new environmental regulations, the Superfund provisions and the Clean Air Act, and as the media discovered chemical companies as the bad guys, there was suddenly a premium on people who could deal with these issues and who understood the media."
Bishop credits Mahoney with being among the first in the chemical industry to appreciate the ultimate consequence of what was happening—that it was going to become impossible for companies operating in such a controversial industry to compete effectively if they continued to alienate consumers, the media and legislators—and that the solution was not simply better communications but a change in culture.
"Changing corporate culture is never easy," says Bishop. "And I would be lying if I said it had been a complete success. There are still a few neanderthals out there."
Ten years ago, Bishop says, Monsanto had earned a reputation with regulators for being something of a "hardass": complying with the law, but resorting to litigation if anyone tried to enforce regulations the company believed to be unfair. But there was a growing realization that such a relationship with regulators was counterproductive, that the company would have to cast off its "black hat."
According to company experts, "reacting to the command control bureaucracies that have traditionally regulated the chemical industry had stunted the creativity of those who were being regulated, creating a deplorable lack of response to the public's demands for a cleaner planet."
Clearly, major changes were necessary.
"The key to it all is to establish relationships internally with the people in research, and manufacturing, in sales and marketing, with everyone in executive management, and making sure that they look at you as something more than just a public relations flack," Bishop asserts. "You have to really understand the business if you are going to command their respect, and you don't command that respect overnight; you have to earn it every day through your actions and through your contribution to the success of the business."
Traditionally, of course, one of the obstacles to achieving that respect is that the results of effective public relations are not always tangible.
Says Bishop: "People have to accept that financial performance is not the only measure of success. There are external factors that impact upon this business, and the license to operate we are granted by the marketplace is a big issue. It's not just a buzzword. We operate at the consumer's convenience. You can measure that in terms of public opinion, in terms of poll results and whether the communities in which you operate trust you."
One of the first concrete steps Monsanto took was to announce plans reduce all hazardous emissions by 90% by the year 1992, even though they already met federal standards. The 90% reduction has been positioned by Mahoney and others as simply an initial goal. Ultimately, the company hopes to reduce emissions to zero.
It also decided to apply the same standards to plants that operated overseas, often in countries where environmental regulations were less restrictive that those in the U.S. and where, traditionally, the company had operated to local standards.
Monsanto has also held a series of Environmental Leadership Conferences for its executives, emphasizing the good business sense behind its environmental positioning. At the 1990 conference David Doniger, senior attorney for one of the nation's more radical environmental groups, the Natural Resources Defense Council, was among the speakers, and praised the company's efforts, saying: "Monsanto deserves credit for triggering a response around the chemical industry."
Inevitably, there have been some critics, internally and externally, who have suggested that taking environmental protection beyond simple compliance is an unnecessary expense, and mere public relations window-dressing. When such charges are made, the company's response is unequivocal.
"At all of our manufacturing facilities, the business of eliminating waste is now being commercialized like any other Monsanto product," says Nick Reding, corporate evp of environment, safety, health and manufacturing. "As a stockholder, I'd be worried if we weren't doing this. The companies that don't respond to society's demands for a cleaner environment won't be around in a few years."
Dick Mahoney, writing in Monsanto Magazine, reinforces this reasoning: "Competition and free enterprise have traditionally been seen as contrary to environmental protection... Competition can serve the cause of environmental protection. Corporate environmentalism can create a competitive edge. The right thing to do can also be the competitive thing to do."
The Monsanto Pledge, Mahoney insists, is a commitment to consumers and shareholders alike, that Monsanto will protect the environment and maintain a healthy, successful business. The 90% reduction program will win public support, increase efficiency and—in the long term—create better relationships with customers.
Meanwhile, Monsanto's commitment to public affairs extends beyond the high profile environmental issues. It also encompasses workplace safety: the company was one of the first chemical companies to respond after Union Carbide's Bhopal disaster, announcing a task force to carry out an urgent review of Monsanto's safety policies and procedures at plants around the world.
The company has become a leader in workplace safety, reporting just 1.07 cases of injury or illness for each 100 employees in 1983, compared to 5.5 cases for the chemical industry as a whole, and in 1984 dropping below the one case per 100 for the first time, a level it has worked hard to maintain.
In workplace diversity and racial and gender sensitivity training for employees, too, the company has been a leader. The company pioneered preferential hiring at a time when it was being condemned by the Reagan administration, and despite problems—some resentment from whites, and some blacks concerned the company has not gone far enough—is among the more progressive in training and education.
All of which is not to say that the company has adopted a passive position to consumer pressure. While it clearly believes that adopting policies that safeguard the environment is the right thing to do, Monsanto has refused to bow to pressure from consumer activists in another key area: biotechnology products.
Of four major chemical companies involved in the development of bovine somatotropin, a growth hormone that helps cows produce more milk, Monsanto has been the most outspoken in its response to consumer groups, particularly the Foundation on Economic Trends, who believe the hormone poses safety risks both to cows and to humans.
"Our opponents have played on the use of the word hormone," says Monsanto PR director Larry O'Neill. "They ignore the fact that this hormone occurs naturally in milk. They have played cynically and recklessly on the lack of public understanding about biotechnology."
Says Dan Bishop: "Good public relations involves looking at each case on its merits, and looking at the consumer groups we are dealing with on their merits. There is clearly a large and responsible body of opinion in this country in favor of greater environmental protection. But the Foundation on Economic Trends is not in the same league. We do not consider it to have the same level of legitimacy, and we believe that on this issue we are in the right."
Effective public relations strategy, Bishop believes, involves examining every issue on its merits, and evaluating where the public interest lies. Generally, if not always, acting in the public interest will also be in the company's long-term interest. That has been Monsanto's operating philosophy for the past decade, and will likely be so for the next decade. And now the company is ready to get credit for its good deeds.
Hal Corbett, a Monsanto svp, recently told Monsanto Magazine, "We know the public has not appreciated what web are doing in all its splendor, but the worst thing that can happen is for the PR to get ahead of our performance. We've made ourselves accountable, and our goals are measurable. To a large degree it's best now to let society discover our achievements."
Bishop agrees. Monsanto's public relations department has not trumpeted the company's advances, he says, because that would attract attention to any stumble, and because that kind of hype is alien to the kind of company Monsanto is seeking to become.
"We believe the pay-off will come over time, and that it will be greater if the company earns praise rather than going out and seeking it."