Bayer executive successfully navigates chemical supplier through volatile post-patent business environment by investing in people and technology.
Editor’s Note: Dr. Jacqueline Applegate was named president of Bayer Environmental Science North America in September of 2010. Since that time she has played a key role in strategic and operational leadership of the company’s professional and consumer business. In January, Applegate will become chairman and senior Bayer representative of Australia, New Zealand, Oceania (ANZ), in addition to CEO of Bayer CropScience Australia, New Zealand. However, before she takes on this new role, PCT caught up with her for an interview.
Products, like people, have life cycles. One day, you’ve got an insecticide that distributors can’t keep on the shelves, a few years later pallets of that same product are collecting dust in warehouses across the country. The long-term survivors in any business — whether chemical manufacturing or structural pest control — are those that are able to accurately assess rapidly changing market conditions, adapt their business model accordingly, and reinvent themselves to take advantage of new business opportunities. Dr. Jacqueline Applegate, head of Bayer Environmental Science North America, understands this basic business truth because she has lived it, re-energizing brands and turning around businesses, regardless of the odds.
It wasn’t that long ago Premise was one of the “darlings” of the industry, a widely used termiticide serving a segment of the pest management industry of critical importance to PMPs. However, when imidacloprid — the active ingredient in Premise — went off-patent in 2007, taking significant value out of the marketplace in the process and prompting belt-tightening at Bayer, company executives knew it was time to “reinvent” itself. And they had the perfect person already on staff for the job, a high-energy chemist with uncommon people skills and extensive experience building successful teams — Dr. Jacqueline Applegate.
“Navigating through times of change and driving change are two of Jackie’s major strengths,” observes Chris Pienaar, director, business operations, Bayer CropScience. “For a long time we were still talking about Premise and licking our wounds,” he recalls. “We needed to get over that period of our history, live our strategy and move on.”
Moving on was easier said than done, requiring a number of personnel changes, in addition to ongoing technology investments that have resulted in several innovative new products for the pest control industry, including Temprid, Suspend PolyZone and FFAST Bti, as well as enhanced formulations of Premise.
“Now, we’re introducing new products and hiring people once again,” Pienaar observes. “I think the marketplace admired the fact we were taking a bold approach in difficult circumstances, and they supported us accordingly. We’re quite comfortable with what’s coming down the road. We have a healthy pipeline.”
“The bottom line is this is an extremely successful business,” Applegate says. “We’re in a good place both internally and externally,” a sentiment shared by a number of her colleagues in the pest management industry, particularly Bayer’s supply chain partners.
Applegate is not satisfied with “business as usual or the status quo,” according to John Bolanos, president, Univar Environmental Sciences. “She has brought fresh and challenging approaches to the business that have benefitted our industry.”
Lon Records, president of Target Specialty Products, agrees, saying Applegate has a “can-do attitude” and “contagious enthusiasm” that serves the company well. “With a Ph.D. in organic chemistry, she started with Bayer in basic manufacturing,” he says. “She worked her way up in a male-dominated environment to be given increasingly important supervisory, management and strategic planning positions,” a testament to her leadership abilities.
“The first things that were evident in meeting Jackie were the level of enthusiasm she has for this industry and intensity that she brings to her job,” adds Bob Rosenberg, senior vice president, National Pest Management Association. “She is committed to ensuring the best for the industry not just now but decades into the future.”
Clearly, Applegate has come a long way since her early days growing up in Union, Ohio, a “close-knit community just north of Dayton where everybody knows your business,” she says. Applegate was raised in a family with traditional small-town values. “A lot of my ancestors are connected to the founding families of the community,” she says. “My father is city manager and my family owns a restaurant in the area called the Toll House Tavern.”
Unlike many households in the area, where agriculture is king and big families are the rule rather than the exception, Applegate was an only child. She also was a bit of a surprise. “After I was born, my father asked the doctor, ‘What do you mean, it’s a girl?’ I was supposed to be a boy.”
Despite her father John’s initial reservations about raising a daughter, he quickly adapted to his new role, embracing the challenge and reveling in his daughter’s many academic accomplishments. Fortunately, Applegate also was blessed with a number of very strong female role models. Her mother Sharon managed the family’s restaurant for more than 30 years, where Applegate bused tables as a child, before working as a waitress in high school and tending bar during college. “I worked in the restaurant from the time I was 12 years old,” she recalls fondly.
The Toll House Tavern was truly a family business, providing valuable life experiences that have reinforced Applegate’s affinity for the pest management industry. “When you work in a family business and someone calls in sick, your family knows where to look,” she says. “That gives you a perspective on the importance of commitment, personal responsibility and working hard. Those values were instilled in me from a very young age.”
Applegate’s mother wasn’t the only strong female role model in the family. Her paternal grandmother, Sydney, served in the Nurses Corps during World War II returning home to southwestern Ohio to get married and start a family. “I used to call her the town doctor,” Applegate says. “She would help people who didn’t have money to go to the doctor. She was beloved.”
Despite her small-town roots, Applegate’s parents always knew there were big things in store for their intellectually gifted, perpetually on-the-go child. “My parents always stressed the importance of education, as well as always being able to take care of yourself,” she says. “They often told me you must be well educated and self-sufficient; there are no guarantees in this world.”
Applegate — who lives by the personal mantra “Believe it. Dream it. See it.” — took their words to heart, becoming the first person in her family to graduate from college, earning a degree in chemistry from nearby Wright State University. “The 1980s were a challenging time to be heading off to college if you owned your own business,” she recalls. “The economy was tough, so my dad wanted me to go somewhere nearby and live at home to save money. I remember thinking, how boring.”
Nonetheless, she made the best of her time at Wright State, pursuing a dual major in biology and chemistry with aspirations of one day becoming a world-famous oceanographer. “I was going to be the next Jacques Cousteau,” she says with a laugh, somehow overlooking the fact that Dayton is 600 miles from the nearest ocean.
An idealist at heart, Applegate continued to harbor aspirations as an oceanographer, until one day her father — ever the voice of Midwestern reason — asked, “Do you really think the world needs another Jacques Cousteau? There are a lot of great professions out there. You can do a lot with chemistry and you seem to be quite good at it. You can probably go to a Top 10 graduate school.”
Which is exactly what she did, earning a graduate appointment at Iowa State University where she studied under Dr. George Kraus and was mentored by Dr. Glen Russell, a leading authority on free radical chemistry. “It’s a very good chemistry school with close connections to agriculture as a land grant institution,” Applegate says. “Because I worked around agriculture my whole life, it felt like home.”
Just like at Wright State, Applegate was one of the chemistry department’s shining stars, performing world-class research and developing a growing reputation as a talented teacher. One day, as graduation approached, Dr. Russell asked, “‘Jackie, what are you going to do?’ I told him I would be applying at schools to begin my post-doc work. He said, ‘I’m sure with all the good work you’ve done you’re going to get a post-doc assignment, but that’s not where I see you.’”
A Global Commitment
When given the assignment to develop a long-lasting residual liquid spray to combat malaria-spreading mosquitoes in developing countries, the scientists at Bayer ended up creating a valuable new insecticide for the U.S. structural pest control market, Suspend PolyZone.
How did they do it? In 2006, Bayer partnered with the Bill and Melinda Gates Foundation and the Innovative Vector Control Consortium (IVCC) to help these two organizations limit the devastating health effects of malaria. DDT, which is still used in many countries to control Anopholes mosquitoes that are vectors of the disease, is highly effective but also raises concerns. The available alternatives break down quickly in Africa’s harsh climate, making it impossible for government health officials to provide long-term control without using DDT. In response to this need, Bayer formulation scientists got to work and developed a long-lasting residual formulation of deltamethrin featuring a patented polymer that would protect the active ingredient under the most adverse conditions. “We’ve always been deeply involved in global vector control,” observed Dr. Byron Reid, Bayer ES product development manager. “It’s difficult to get to some of these far-flung, scattered villages more than once or twice per year. Materials that (government officials) use have to be able to last a very long time,” particularly on challenging surfaces such as thatched roofs and mud bricks. “We lent our expertise and determination to create a formulation that both protects the active ingredient from the environment and keeps it available to control these insects for an extended period of time. It is fundamentally the same product” as Suspend PolyZone in the U.S., he said.
Through its partnership with the Bill and Melinda Gates Foundation and IVCC, Bayer has demonstrated its global commitment to addressing the serious health issues associated with vector-borne diseases. “You and I were able to grow up in a world free of mosquito-borne disease,” Reid said. “In my grandaddy’s day, malaria was still common in the southeastern U.S. So we’ve freed ourselves from the risks of malaria in the developed world, but we still have problems to solve in the developing world.” Bayer scientists hope to change that moving forward.
When a respected professor who also served on your dissertation committee offers such unsolicited advice, you listen, Applegate says. “I asked him, ‘What do you mean?’ and he said, ‘With your personality I either see you being an industrial chemist or teaching at a small school. You have the personality to work in a corporate setting and you have the skill set required to be an effective leader, working in a small school where you can have more of an impact on people. I can play the politics of a large institution, but you’re all about people.’”
The more she thought about it, Russell’s words resonated with the young chemist, prompting Applegate to consider a dramatic shift in her career aspirations. “It’s funny how one conversation can change your life,” she says. “I interviewed with a number of corporate recruiters who visited the campus and I got 11 offers from 11 different companies, eventually deciding to join Bayer.”
The rest, as they say, is history. PCT recently caught up with Applegate to learn more about her time in the pest control industry. A portion of that interview appears here, with additional questions and answers published online at www.pctonline.com.
Q. Why did you decide to leave the world of academia and embark on a career in the chemical manufacturing industry?
A. While attending graduate school at Iowa State University I was a basic research chemist, but at the time I didn’t have a complete understanding of how I could apply those skills in a corporate environment. When I began interviewing with recruiters from various Fortune 500 companies, I quickly learned about the various opportunities that were available at those companies. Whereas Loreal and Procter & Gamble were great organizations, they were consumer-product companies, which wasn’t particularly interesting to me. Companies like Bayer, on the other hand, were about large-scale industrial applications and process development work.
So when I began researching my after-college career options, I remember walking into a large chemical plant and saying to myself, “Woah, look at those reactors; this is how you do industrial chemistry! It’s all about pounds out the doors. That was exciting to me.
Q. With so many different opportunities available to you upon leaving college, why did you join Bayer?
A. When you interview with various companies, you quickly learn that every organization has a unique corporate culture. When I interviewed with Bayer, the conversation always came back to the people who worked there. It’s a very traditional company that is focused on their people.
In addition, when I would ask people how long they had worked at Bayer, virtually everybody I met would say, “I’ve been here 20 or 25 years. I said to myself: ‘Wow, it’s like a family. People are the foundation of this business, and I decided that’s the kind of company I wanted to be associated with during my career.
Q. What changes are you are seeing in the pest management industry and how is Bayer responding to those changes?
A. There’s certainly a generational change that is occurring in the pest control industry. There are also significant technological changes that are occurring, as well as increased regulations. We haven’t seen the full impact of all of these changes yet, but they’re coming. I also see a new spirit in the industry of PMPs embracing these changes and pro-actively adjusting their business models to adapt to the new realities of the marketplace.
Q. Bayer had a few tough years until it right-sized its business a few years ago. What was that experience like?
A. Yes, the generic attack and economic crisis took a toll on our business, and we were far more reactive — hunkering down as a business — rather than investing in the industry. Now, we’re looking ahead to the future once again. We’re talking about what the market will be like in 10 to 15 years. We’re spending a lot more time focusing on the game-changing technology in our product pipeline and identifying customer needs that in combination will help PMPs do their job more efficiently in the future.
Q. It must have been tough to keep morale up during that period?
A. While we had our challenges, it wasn’t insurmountable. It was really just a matter of Bayer repositioning itself. From pre-generic entry to post-generic entry, there was phenomenal value taken out of the marketplace, which dramatically impacted our business for several years, but we’re once again investing in the future. Nonetheless, it impacted both Bayer and the services we could provide our customers. Now, we’re looking forward to the future and once again investing in new product innovation. Bayer has a history of bringing breakthrough technology to the marketplace — Maxforce Baits, Temprid, Suspend PolyZone, etc.
When we develop a product like Temprid that reduces callbacks, making a positive difference in our customers’ lives, it helps keep our people motivated. We were a little beat up from our imidacloprid experience, so when we developed Temprid and saw what the product could do for our customers, it generated a lot of optimism within the organization, and that created a snowball effect that helped change the culture at the company.
That’s part of leadership. As a leader, you can be thinking and feeling all of that uncertainty that comes with market downturns and product changes, but you can’t transfer that to your people. You have to be honest with your staff when the chips are down, but you have to tell them how and why you’re going to succeed collectively. I think we did a very good job of doing that during that period. We weren’t “Polyanna-ish” about it; we remained optimistic, while still being realistic. We had expectations for our people, and we expected them to deliver on those expectations, which they have, so we’re heading in the right direction.
Q. What are you doing to ensure Bayer ES stays on track and looks to the future?
A. We’re being very intentional about sticking to our business plans in the short-, mid- and long- term. We equate it to having a regular “health check” that allows us to assess how we’re doing. It’s a living document that is updated continually.
Q. How does Bayer go about developing the necessary market intelligence to launch its next market innovation?
A. We have a Customer Advisory Council that has proven very beneficial. We’re getting a lot of excellent input from them, insights about their wants and needs, particularly their unmet needs. What we’ve learned is they’re interested in working with manufacturers who will help them allocate their resources more effectively, become better business professionals and reduce costs through limiting callbacks.
Q. How do you determine if you’re going to go forward with a product?
A. First and foremost, it must fill a market need. Second, any product we bring to market must have an attractive environmental profile. We’re a company that wants to do the right thing. Bayer has been building its reputation for years. For all the good things you’ve done, either as a company or as an individual, with one major misstep you can lose that reputation overnight. We’re very cognizant of that fact. It’s part our culture.
For additional coverage of PCT’s interview with Jacqueline Applegate, visit the Online Extras section of www.pctonline.com.