The Editor's Page -- A Cautionary Tale

Don't win the battle of principle with the government, only to lose the war for the customer.

With the inauguration of President George W. Bush, business executives and groups are champing at the bit to roll back business regulations imposed during the Clinton era. They have lined up at the doors of the new Administration's cabinet members whose previous policy positions leave them amenable to trimming or eliminating environmental, social, land-use, and workplace rules. The oil industry seeks to ease restrictions on clean-air standards for buses and big trucks. Business advocacy groups push for changes to OSHA's ergonomic rules. And oil and mining industries wait impatiently for an expected repeal of the drilling ban in Alaska's Arctic National Wildlife Refuge. They'd better be careful: They just might get what they want. Companies looking to change the regulatory system in their favor should review the lessons Monsanto Co. learned the hard way. During the first Bush Administration, Monsanto, riding the wave of a powerful regulatory-relief program, won every regulatory effort it set out to win for itself and the bioengineered-food industry. The company deftly managed the EPA, the Dept. of Agriculture, and the FDA to win a free pass from government regulatory control. Testing of new products became voluntary and could be conducted by the companies that brought them to market. Labeling was not required. Monsanto even convinced trade regulators to help push the company's products overseas. But the company bungled the more important job of winning over an even more important group: the consumer. Now the giant Monsanto, former leader of the bioengineered-food industry, is no longer an independent company; it was acquired by Pharmacia Corp., a New Jersey drug company. The interests of the bioengineered- food industry have been set back a decade. Consumers have a new moniker for bioengineered food, Frankenfood -- one not likely to inspire consumer confidence and, worse, not likely to be forgotten. Even food manufacturers likely to benefit from the success of modified food have backed away. The moral of the story? Success on the political-regulatory front doesn't always mean ultimate success with your customers. Many of the arguments against government regulation of business are more about principle than business. It is right that business participates in these debates. But in the board room, the principles of value-chain management -- most importantly, that your customer comes first -- should reign supreme. Don't let the euphoria of finally having an opportunity to beat back regulations distract you from your primary concern: meeting your customers' wants and needs. Otherwise, like Monsanto, you might win the battle of principle with the government, only to lose the war for the consumer. Patricia Panchak is editor-in-chief of IndustryWeek.

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