Most organisations get it wrong when it comes to thinking about standards and innovation. They think that standards are a necessary evil, important but dull, their significance are limited to cost reduction and quality improvement. At the same time they equate being innovative with being different. This is probably wrong on both counts.
Focusing on the similar, the shared and the common will provide a stronger platform for scalable transformation then trying to be different ever will. Although innovation is the central issue in economic prosperity as propounded by Michael Porter created an explosion in wanting to be innovative, creating an innovative culture and understanding innovation. As a management educator, I got intrigued by the relationship between innovation and standards, because this seemed radical.
A regular business sense considered it to be an antithesis. I found that this relationship is less explored but what is fascinating is the impact it makes across the value chain and can be the critical tool for innovation. In the absence of standards different elements of the value chain would be connected inefficiently. In the present times when there is so much stress on being creative and different, it might shock you that the standard, the shared and the common can be facilitators of transformation.
Historically, many of the breakthrough innovations that have changed the world, including railroads, modern manufacturing and interchangeable parts, money, agriculture, containerised shipping, numbers, the Internet, even language, only succeed because of standardisation. If we look at the industries, these standards provide a common language to communicate. The innovators working under the same umbrella can discuss the details without spending time on the fundamentals and platform of operations. The collaborative nature of framework frees innovators to concentrate on finding ways to differentiate their products and services.
Standards also facilitate in creating a market ecosystem around those standards. The investors get interested because they gauge the potential. This only gets more pronounced in technological industry. In fact, emergent technologies, processes, products and techniques broad spectrum are in the process of developing their first standards. This can substantially reduce risk and uncertainty surrounding them and enable them to more quickly and easily attract investment, establish markets and make their products commercially viable.
As establishment of standards is essential to securing the future of emerging technologies by building a strong foundation, Indian businesses should actively play this role both at the domestic and the global level. What transpires is—standardisation helps as a channeling agent for specific new technologies that helps in creating a critical mass for that industry. This further builds in credibility and gets investment and complementary technology build around it.
Again for already established technologies, there is benefit of economies of scale, reduction of transactional costs, trust and credibility. This take away should be actively pursued by the policy makers and business community in our attempt of making an innovative India.
(The writer is professor, FORE School of Management and Chevening Rolls-Royce Science and Innovation Scholar CRISP 2016)