The Case for Management Standards
Transforming Banks for a Digital Future: The Winners, The Losers, and the Strategies to Beat the Odds
The quest for success in business today begins in the repeatable,
day-to-day disciplines of management and in something as prosaic as
Standards are our defense against the complexities of life. Because of standards, we can pick up an extension cord, a light bulb, a can of motor oil or a music CD and just use it. Where there is no standard, life gets messy. Does each member of your family have a different cell phone with a different charger? And does each have a different digital camera requiring its own unique plug for the PC?
On the other hand, in the company you work for surely everything that can be standardized is - customer account numbers, paychecks, email systems, operating software, decision rights, budget procedures, metrics, recurring management processes. No? Ah, complexity.
Anything that can be standardized should be, for a simple reason: standards free your people from fussing over routine, repetitive matters and allow them to focus on the things that will differentiate you from your competitors. Imagine the time and energy you would waste if there were no standard for light bulbs or if every new piece of office equipment required a different voltage. How much time do you waste deciding how to make decisions that you know in advance you will have to make? How much opportunity do you lose because each division captures customer data in a different way?
If you examine your organization - everything it has and does - from the perspective of standardization, would you discover that you are trying to re-invent the wheel each time on too many non-strategic activities?
The paradox is that through routine and standardization we create an environment conducive to innovation. The process is similar to the progression from commodity to brand: settle on one way to do what is known and reliable, and devote your mental energy to what is new and not yet known, which is where the real action and payoff lie.
Standards have always been critical in business. They were necessary for the Industrial Revolution to happen. Leading U.S. machine tool makers, for example, sat down a century ago and agreed on a standard screw. The birth of a national economy in the United States required connections among isolated cities, and this required standard railroad track gauges and standard time keeping.
At the same time that these things were being standardized, and as work was moving to the large factory from the small shop, various industrialists and thinkers such as Henry Ford and Frederick Taylor were developing new ideas about standardizing work. Tools such as the Gantt chart came into being. Ford's real innovation was not the car but how he organized people to work.
With the Digital Revolution, new standards were needed, the World Wide Web being a prime example. Much as trains did for the national economy, the Internet and the Web opened up and connected the global economy.
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