PART 3: Innovate Not…Because I Can’t Possibly Reach a National Market.
[/vc_column_text][vc_column_text]Although innovative stormwater quality product offerings which deliver higher performance and reduce costs of compliance are desperately needed in public infrastructure and private development, they are few and far between. As we said a couple of weeks ago, the reasons why are numerous; let’s take a look at another one.
If we expect new solutions, the stormwater market urgently needs industry to be engaged in a competitive effort to win sales and market share by delivering a better product than their competition. In most industries, markets are a ‘survival of the fittest’ affair in which companies rise and fall on the strength of their latest and best answers to customer needs. It’s that continuous, grinding, competitive drive that brings about better and better solutions, and it’s desperately needed in our industry.
The reasons why this industry is an anomaly with respect to innovation are legion, but I believe these are particularly important:
There’s no real incentive for manufacturers to develop a better product.
If a manufacturer can make a nice profit on an ineffective product and no one really knows the difference, or requires more, why should he/she invest big dollars in developing something innovative? How would the market recognize the better product if a manufacturer made one? Without a national water quality standard to meet or exceed, who’s to say which product is best? Worse yet, without a viable, nationally recognized verification program in place to prove/disprove the manufacturer’s claims, who’d believe it anyway? How do we get industry fully engaged in a competitive battle when we don’t even have a battlefield?
The ‘patchwork’ quilt of state, regional and local standards insures that only the least effective products make it to the national market.
Without national standards, we’ve inadvertently fostered the development of a patchwork quilt of state, regional and local standards that for the most part, make the marketing of all but the least effective, ‘lowest common denominator’ type products impossible on a national basis. This de facto national system of stormwater standards is built on so many layers of duplicated effort that it boggles the mind to think about the waste and inefficiency involved. (Think of the incredible things that could be accomplished with the funds that would be freed up if local governments could extricate themselves from the standards business.) The ‘quilt’ is made up of overlapping, inconsistent and often conflicting standards, even across adjacent city and county lines and most of them involve an ‘approved’ products list that is rarely updated and has no ‘backdoor’ for the timely approval of innovative systems. It’s obvious why the limited range of stormwater products that is available to us nationally is as anemic as it is.
Limited regional verification programs and approved testing protocols are counterproductive.
Developed to operate in the vacuum created by the lack of national standards and a nationally recognized verification program, state and regional verification programs do their best to fill regional needs. Their efforts are well-meant, but they deeply complicate the matter of getting a new product to market nationally. Testing goals, methods and protocols aren’t consistent from program to program and they are only accepted on a limited basis, typically only by jurisdictions within the same or nearby states. Given the disdain with which laboratory testing is generally held, which is a result of early stormwater industry history, the primary verification approach is field testing. Valuable, but extremely limited in the ability to extrapolate likely results in locations other than the one in which the testing was done, these tests are extremely expensive and generally require up to two years to complete. A manufacturer considering taking a product to market may face a year of travelling and negotiation to get these verification processes going, and must engage in at least six separate programs scattered across the country. The typical cost of verification in each region is likely to be $200,000 to $500,000. Do the math, and then factor in the cost of waiting another two years for the results. Can we really wait that long to get new methods and materials into play in a market desperate for better, more cost-effective answers? Is this really a path we can reasonably expect innovators and manufacturers to take?
There are limited, if not non-existent, distribution options for products which require a solutions-oriented sales effort.
For all the reasons we’ve discussed above, and in Part 1 and Part 2 of this series, we have an ‘or equal’ sales culture in the stormwater industry. “I’ve got a product that’ll meet the spec, but I can give it to you at 10% less,” are the words most used in stormwater related sales calls. Effective when selling against line item bid specs for interchangeable parts like geotextile or pipe, it’s not an approach that works when selling solutions, where problems must be identified and answers developed based on an intimate knowledge of the client and of the systems and issues involved. It’s the difference between selling paperclips and customized accounting software. Our marketplace struggles with this approach. If you have a new product to get to market nationally and have the money and time to persevere through the trials and tribulations described in this blog, you’ll get to the marketplace and realize that there are few organizations prepared to sell it. This too must change.
Put yourself in the shoes of the individual or company with a great new idea that could potentially be a ‘game changer’ in helping our country conquer urgent stormwater problems. Would you take on the incredibly frustrating, expensive and time consuming gauntlet described above? In the stormwater industry, change has been resisted at every turn, because we’re not equipped to deal with it. As a result, it’s come rarely, and only in bits and pieces. If we don’t find a way to eliminate the obstacles to change, and specifically to getting industry involved in a competitive battle to develop the better stormwater ‘mousetrap,’ we have very little hope of meeting the challenges we face. The results of our failure will be a plague on our grandchildren if we don’t start making serious progress now.