Small firm's pursuit of R&D pays off Research and development easily can look like a pursuit only for the very big and very rich in the corporate world. After all, about 60% of the U.S. chemi­cal industry's R&D money is spent by just four companies—Du Pont, Dow Chemical, Union Carbide, and Mon­santo, in that order.

Not so, says an unexpected source, New York City-based Church & Dwight. More than a century old with sales last year of just $58 million, Church & Dwight has rested comforta­bly through the years on a single chem­ical, sodium bicarbonate, in multiple uses. And yet, Church & Dwight turns out to be a strong exponent of R&D—with a twist.

Not trying to mimic its larger cous­ins in the R&D world, Church & Dwight has avoided a laboratory-stud­ded R&D organization. Instead, the firm has gained major leverage for its wide-ranging R&D function through a particular management device, outside contracting. This is somewhat analo­gous to an ambitious chemical produc­er's using borrowed money to lever its volume growth. However, in Church & Dwight's case, the outside resource is not money but technical expertise.

How can a small, traditionally con­sumer-oriented company succeed in plugging into the secrecy-ridden world of technical development? Part of the answer at Church & Dwight was to hire an expert directly from the technical sphere it wanted to tap. In 1973 Dr. Myron S. Weinberg left the presidency of the consulting firm Foster Snell to become vice president for R&D at Church & Dwight. Weinberg already had worked closely with Church & Dwight since the company started its R&D drive in 1969.

"The expertise to tap exists," says Weinberg, originally a synthetic medic­inal chemist. "My assignment is to ferret it out. If you go out to find it, it is available."

Weinberg contends that outside R&D help is plentiful despite the huge proprietary R&D establishments at large companies. For example, he says that in a number of chemical product areas such as detergents and aerosols, third-party technical work traditionally has been strong.

It was in detergents that Church & Dwight made one of its first moves in its R&D program. Foster Snell devel­oped a nonphosphate laundry deter­gent for Church & Dwight in 1970. This detergent carries the company's well-known brand name, Arm & Ham­mer. This product has managed to thrive despite the demise of most of the 80 or so nonphosphate detergents intro­duced in the early 1970's in response to the ecological demand to remove phos­phate builders in detergents.

In aerosols, Weinberg says the same

situation of third-party expertise ex­ists. Church & Dwight sells aerosol-packaged products and currently is studying the consequences of allega­tions made that some aerosol propel-lants are depleting atmospheric ozone. Weinberg says the company is commit­ted to being able to move out of fluoro-carbon propellants during 1976 should these allegations prove out.

In aerosols and other product areas, Church & Dwight currently has about 20 outside R&D sources under con­tract. These include universities, inde­pendent laboratories such as Franklin Institute, and independent consultants such as Foster Snell, Church & Dwight's top R&D supplier.

Weinberg adds ironically that one large group of potential R&D sources for his company consists of older R&D personnel let go by companies in the 1970 era of low R&D support. Another big group of potential sources is out­side R&D people known for one kind of work who can be educated to new problems.

Within Church & Dwight itself, the R&D organization is held largely to the management level. This enables a wide range of R&D functions with a small staff. Church & Dwight's R&D force numbers 17, with 12 senior profession­als. This R&D group has been located in Syracuse, where Church & Dwight has a plant. However, the staff now is relocating in Piscataway, N.J. The rea­son for the move, Weinberg says, is that there are more R&D services available in the New York City area.

Church & Dwight's small R&D staff covers several key functions. There are two product development groups, each headed by a manager of product devel­opment equivalent to director of prod­uct marketing. Development areas in these two groups include baking soda chemistry, laundry detergents, house­hold care products, personal care prod­ucts, and new specialized chemicals.

In addition to these two groups, there is a group for regulatory affairs and quality assurance. This group han­dles contact with regulatory agencies in Washington, D.C., and the state. The group also has contact with the compa­ny's legal and consumer affairs groups. Other parts of the group's work are un­announced inspections of plants and warehouses, purchases of store samples of company products, analytical work at plants and R&D laboratories, and review of the company's raw materials for potential switching.

The last task has become quite im­portant in the past two years of short­ages and large price increases. For ex­ample, Weinberg says this group had to look into tight supplies of steel for aerosol cans, of detergent surfactants, and of acetates for oven cleaner prod­ucts. To guarantee future supplies, this group has sometimes committed the company to the most expensive form of materials or has switched to alterna­tive supplies. It is noteworthy that this

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Weinberg: expertise to tap exists

group in R&D has the ultimate respon­sibility for changes in Church & Dwight's materials or suppliers.

Two other groups handle process de­velopment and basic sciences. Weinberg believes process improve­ment is a key element in profit im­provement. The older the process, he says, the more open it is to improved efficiency.

Basic research potential in sodium bicarbonate also excites Weinberg. He feels there is a lot left to discover about this old commercial chemical. "Radical that I am, I believe sodium bicarbon­ate is not so inorganic a chemical. It is part of every living thing."

At the end of Church & Dwight's R&D organization, Weinberg reports to the company's president and chief ex­ecutive officer, Dwight C. Minton. Al­though Weinberg is not on the board of directors, he is included in the compa­ny's top management committee.

Weinberg declines to give specific numbers for Church & Dwight's R&D budget. However, he says the budget has grown continuously since the R&D program started in 1969. Growth has been steady for both inside staff and outside projects.

The R&D budget is controlled not by a fixed percentage of sales but by man­agement decisions on desired project levels. Weinberg says that, although the overall R&D budget stays close to a planned level for a given year, there is tremendous flexibility in purchasing outside services within the year.

Asked if this R&D commitment has paid off, Weinberg replies: Look at Church & Dwight's growth. The com­pany's sales grew two and a half times in the five years from 1970 through 1974. After-tax profits went up three and a half times in the same period.

Weinberg says at least one third of current sales are associated with the technical development effort or with technical support of new applications. "If you take all the R&D money over the past six years, it has paid out."

Hence, six years after starting its R&D program, Church & Dwight has no disillusionment. Weinberg's basic outlook remains upbeat: "I am a be­liever in R&D as a resource. I believe in maximization of resources. I think R&D is an inherent contributor to cor­porate operations." Π

August 4, 1975 C&EN 13