Why Standardize?

This is a list of what drives standardization, i.e. what the goal or purpose of creating a standard is, or what value provides the motive force to cause a standard to come into existence.

I mined many of these out of Industrywide Voluntary Product Standards by Hemenway. Many many moons ago. It has drifted from that original over time. I keep making additions.

frame the competition
A standard make it easier for buyers and sellers to negotiate an agreement. It frames that negotiation. It defines the landscape upon which the competitors will meet. It reduces the complexity of the buyers shopping significantly.
accelerate growth
By clarifying how cooperation takes place, enabling a platform, encouraging complements, simplifying contracting, etc. etc. standards accelerate the growth of the industries around them. For example after the standards for computer interconnection settled in (two examples: the IP protocol stack, or the PC backplane bus) the growth in took off.
Enable and frame cooperation between parties to the standard. For example, the standard to drive on the right hand side of the road makes things go smoothly for all parties.
exclude competitors
“A dominant entity (or oligarchy) can use standards to shape the competition and define things to the disadvantage of competitors. This can be done by using the standard to focus on attributes that benefit the standard maker. (See also stability.) The standard maker can gain some first mover advantage, an advantage which (in multiple rounds of the game) can keep competitors “”chasing tail lights.”””
raise the bar
A powerful player may use standards to force suppliers to stretch for a higher level of quality. Governments, for example, do this when they set fuel efficiency or safety standards. Microsoft does this when they define the standard PC.
A standard can specify the inputs to a good, the process used to make that good, or the outputs. It is often the case that one of these three is far more tractable to measure than the others (it’s easier to measure students per class than it is knowledge instilled). In the construction industries, for example cement construction, the process is critical to a quality output so standards are set to guide inspection steps in the construction.
worse is better
A standard requires both a spec, and a community of users. Attributes that improve a standards abilities to achieve and maintain critical mass often compete with other attributes. Simpler specs are often incomplete; sometimes quite incomplete. The original spec for C, SQL, and Java are all examples of the ‘worse is better’ syndrome. Sometimes the community/spec doesn’t grow – or it fragments – so this is all you get. The early adopters often feel they have been deceived.
brandname displacement
Brandnames are one of the ways used to signal quality to buyers. Buyers maybe forced to use brandnames as a substitute for more accurate measures of quality when buying complex goods. Government standard setting often does this; for example, in the battery industry AA batteries are all built to a standard and don’t vary significantly from brandname to brandname.
Create a platform in service of a bloom of applications above that platform. This is similar to the desire to create compliments.
scale economies
Enable the cost advantages that comes from big: distribution, manufacturing, purchasing, externalities, network effects, etc.
mutual aid
Enables parties to share resources to solve problems. For example, assuring that allied armies share the same size bullets, or that communities share the same size fire hoses. The most generic of these is the sharing of labor, members of the standards community benefit from the problem solving done by other members. For example, if I purchase a Macintosh I get some of that; if I purchase a PC, I get some more. This and a number of other aspects (platform, complements, etc) all create a network effect around standards.
preempt the rush for the bottom
“In the absence of standards vendors may sell efficiency (i.e. lower price) while in fact they deliver is actually lower quality. This is what led to the airline industry writing a standard to define ‘a sandwich’ or the construction industry to write a spec for the “”1 inch board””.”
my way
It is extremely common to find individuals or small groups that have codified their operating rules into what they call standards. Coding conventions are one example of this. Such groups will share these with others; their motives in doing that run the range from enthusiasm to ascription.
aid smaller buyers
Large buyers can afford the overhead of writing their own specifications and have the buying power to enforce them. Historically milspec standards, since they were public, benefited smaller buyers who could free-ride on the public good.
survey current practice
Many standards writing processes start with a capturing a list of current practices – and then some of them never get very far beyond that. The vocabulary they create for describing how things are done in this first stage can be extremely valuable. The standards for medical information systems are like this.
Most goods have numerous heterogeneous attributes. Standards tend to strip down those attributes to a few, and then define quality in those terms. Grade A apples, for example, might mean only that they are blemish free; but say nothing about their taste. This is related to framing the competition.
lawyers or standards
Standards are often used as a device to avoid costly litigation or accidents; in this sense a standard is a cheap form of contracting.
“Standards often seem designed to amuse. For example, the standard for a 2×4 isn’t 2 inches by 4 inches, but rather something less than that. This kind of thing arises out of the ‘preempting a rush for the bottom’ and the ‘cataloging of current practice’. It also arises out of the need for stability; as with the definition of “”the hundred year storm””; which after it was defined turned out to be misnamed.”
Standards tend to create homogeneous markets; this tends to lower the chance of disruptive innovation.
create complements
Vendors desire that complements be of high quality and low cost; since standards tend to create those aspects it maybe in the interest of a vendor to create standards for those complements. For example when Apple introduced user interface standards for Mac programs they were laboring to make their complementary products, i.e. MacIntosh Applications, higher quality.
signal value
“Vendors often use standards compliance for it’s signal value. “”Version 12, now fully certified XHotStuff support.”” “
IP pooling
IP creates monopolies, which in turn frustrates the creation of markets and complements. Firms may find it necessary to cross-license or create IP pools to work around this barrier to market growth. [See Carl Shapiro’s paper “Navigating the Patent Thicket: Cross Licenses, Patent Pools, and Standard-Setting”]
prevent stranding
In the absence of standards and in the presence of strong network effects early buyers are likely to find they have made happened to choose a vendor that fails to win the leading position. Such buyers are then forced to bear the cost of being stranded and switching to the winning, now standard, vendor(s).
Diversity of practice makes standardization harder. One scheme to move toward something less diverse, more standard, is to catalog the existing practice. This might not be, strictly, a motivation to standardize; but rather a tactic.  This is, of course, self referential and intended to assure the above is put to good purpose Рe.g. Рepistemic closure.
What to say…

5 thoughts on “Why Standardize?

  1. Pingback: Ascription is an Anathema to any Enthusiasm » Viral Communications

  2. mike van andre

    task accomplishment standards are required if measurement is to be valid. from a statistical and process improvement perspective, measurement of a task is a pre-cursor to improvement of the task. in order for the measure to be valid, all parties accomplishing the task must do exactly the same steps in the same manner, or else the measure will not be valid. the measures must be valid in order to plot them on a control chart, to determine if the process is under statistical control or not.

  3. bhyde

    yeah mike, drinking deeply from the cup of six-sigma are we? That stuff is only useful if the you can achieve a sufficient scale in your operations, a scale where the time constants are small enough, the sample rates large enough, and the process context stable enough for a valid feed back loop to set in. That only happens in the largest firms; usually in the presence of large capital investments. Outside that context the process of standardization is driven by other drivers. Real markets are very unlikely to pick one on one or two measures and focus down on those. Inside those firms standardization of that kind can be useful as a change management tool; but it is so often coop’t by other agendas.

  4. Marc Donner

    Since all of my metaphors are physical, I checked your list against the thing that first exposed me to the universe of standards, namely screw threads.

    I learned about them in a machine shop. If you want to attach one thing to another with a screw, you need to drill a hole and then use a tap to cut threads in it that correspond to the screw you want to use. The standard provides you with the information you need to decide what diameter hole to drill and what tap to use.

    So, the phrase that I looked for was “interoperability” … the closest I found in your list was “cooperation” but that seems like a weak framing.

  5. bhyde Post author

    Marc – That’s very thought provoking. As mentioned that list was largely stolen from that wonderful book. And he certainly tells many of the classic stories about failed interopt. For example the fire hoses unable to connect to the fire hydrants, and maybe the one about how the contractors building the world trade center back in our youth commissioned counter clockwise lightbulbs so the construction crews wouldn’t steal ’em.

    And of course all the ink spilled in this blog about two sided networks is about such exchange standards.

    So I wonder why it’s not highlighted. I ought to think about that.

    See also: http://enthusiasm.cozy.org/archives/2008/01/tripping-up-dead-elephants-on-chains-or-interop-converters

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