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A Chemical Reaction

One day last fall, recalls Mike McLain, the 47-year-old marketer who became chief executive of Indianapolis-based Dow Brands in November …

One day last fall, recalls Mike McLain, the 47-year-old marketer who became chief executive of Indianapolis-based Dow Brands in November 1995, “I was sitting in my office thinking about how I could describe to my kids what I do for a living. I realized that I’m in the business of solving consumers’ problems. But it’s not the solution that’s the key. All of us in this business are very good at delivering the solutions. The real competitive advantage is seeing the problem first.”

What got McLain thinking about problems and solutions was new competition for one of McLain’s leading brands: the Ziploc bag. “We couldn’t figure out why consumers would want to buy this other product,” he admits. “It’s expensive. By our standards, it’s over-engineered. But consumers like it. Then I was in a meeting one day and one of our marketing people said he’d been watching people use a Ziploc bag and noticed that they always run their fingers across the top twice to make sure it’s really closed. The competitive product has a simple little plastic mechanism, and you only have to close it once. By eliminating a small problem, it created a $67 million business. It really hit me then that we are in the business of solving small, simple problems that we’ll never get at through traditional ‘horizontal’ research; we can only get at them through observation, experience, and intimacy with the consumer.”

Before McLain took over, Dow Brands, a $865 million affiliate of Dow Chemical, had been run by scientists, not marketers. The company’s culture, he notes, “was more invention than innovation, more solutions than problems, more growth than focus.” As a result, armed with “a tremendous toy chest of technologies,” the company had embarked on a number of ventures for which it had technologies, but not necessarily expertise. That led it to move, unsuccessfully, into such areas as food packaging and water filtration. “It takes more than just technology to win,” McLain reflects. “Those were different businesses than those in which we know how to compete.”

But learning to resist the temptation to leap into an industry just because the technology is available required a whole new way of thinking. “Being a relatively small company within a big company has been a historical problem for Dow Brands,” McLain says. “I tell our employees we are a $900 million packaged goods company that has behaved as if it were a $9 billion company. We have to learn to act our size, and grow from there.”

From McLain’s perspective-as a marketer who had honed his skills and developed his business philosophies running sales and marketing for Texize in the 70s; globe-trotting for Dow Brands in the ’80s and ’90s; and selectively reading numerous business gurus-acting its size meant focusing on the two businesses it knew best, shedding those that “had historically destroyed value,” and consciously building up brand names capable of commanding consumer loyalty. With the sort of swift action that is his trademark, he pulled together a new leadership team and established a new business model geared to “creating the greatest amount of shareholder value in the shortest period of time.”

The two businesses McLain chose to focus on were home care (cleaners such as Spray ‘n Wash, Fantastik, and Dow Bathroom Cleaner) and home food management (Ziploc, Saran Wrap, and Handi-Wrap). But key to his focus was “the different way we’re taking our brands to market.” This has been most evident in the home care line, where the company has begun to emphasize what McLain sees as its “most underutilized asset”: the Dow name “In the consumer’s mind,” he says, “Dow stands for chemistry and science, which are very relevant attributes for cleaning products. We’re creating a single-minded, consistent positioning for all the cleaning products standing for advanced home care.” Part of that positioning has been the company’s recent ad campaign, featuring Dow Brands scientists using products they’ve worked on to clean their own homes in real life situations.

And it’s the belief that the real-life lab holds the secrets to “finding the problem first” that fuels McLain’s focus on observational market research. “We like to spend time with a few consumers,” he says. “We go to school; we eat lunch with kids; we take their garbage back to our office and see what’s in it. Consumers can’t articulate their problems. We have to observe the problems and create new products around what we observed.”

Have McLain’s observations of his company’s problems led him to the appropriate solutions? It may be too soon to tell. Though he’s given himself two years to achieve his goals, he’s only been shrink-wrapping for 18 months. And for McLain, the laboratory is sure to remain the metaphor, because Dow Brands, like consumers, is “always searching for a different way to solve a problem. In the end,” he says, “the best product usually settles out.”


MICHAEL A. McLAIN

President and CEO

DOW BRANDS

Age: 47

Birthplace: Montgomery, AL

Family: Married; two sons, 18 and 16; one daughter, 14.

Education: BA in marketing from Auburn University; MBA from Furman University.

On speed: “You can’t wait. The job starts the very first day. The faster you can provide direction and align the organization, the faster it moves, and the stronger the reason to believe it will work.”

On patience: “It takes a long time for consumers to say this product fills a need that is the right value. It takes a long investment to change.”

Where he is during the week: On site, at the plants, meeting with sales people, conducting “Munch with Mike” sessions with employees, watching consumers in supermarkets. “I don’t stay in my office a lot.”

Where he is on weekends: Antiquing with his wife; fishing with his oldest son; driving his younger son to soccer and hockey games; shopping with his daughter.

Marketing philosophy: Cutting back on media expenses is “the kiss of death in our business. I prefer to ask if we’re spending enough money in media.”

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