Summary: Whether or not the nominal membership dues of a given standard setting organization (SSO) are significant, participation can be expensive, once employee time and travel costs are factored into the equation. At the same time, the rewards that can be reaped from participation can be very significant, greatly exceeding the fully burdened costs of membership. In order to reap such benefits, however, a member must define the goals it wishes to achieve from participation, understand how SSOs operate, carefully select and instruct its representatives, and then methodically follow through on a carefully considered program of participation. Given that large international corporations commonly join from 50 to several hundred SSOs, both the costs as well as the benefits of such participation can therefore be very great. This article describes how such a company (or any other member of the standards ecosystem) can create an internal program to ensure that it maximizes the value that it can gain from being an active participant in the standards development process. This article is part of the ConsortiumInfo.org Essential Guide to Standards, which can be found at http://www.consortiuminfo.org/guide/. In particular, you may wish to read the first part of this article, titled Participating in SSOs Part I: Value Propositions, Roles and Strategies.
I – Introduction
Most companies exercise a reasonable degree of care in deciding whether to join a consortium which charges meaningful dues. Many also have some sort of formal or informal process for evaluating and approving membership renewals. But it is likely that few make an across the board, institutional commitment to maximizing the value that they receive from participating in standard setting and promotional consortia. The purpose of this article is to suggest ways in which a company can gain the greatest benefit from its commitment of economic and human resources to the consortium process.
II – Where Does the Problem Arise?
There are a number of reasons why a company may not get as much as it could from its (sometimes substantial) expenditure on consortium participation. Perhaps the most significant is the fact that joining a given consortium is usually championed by a single individual, project team or division, which is often interested in only one aspect of the consortium’s programming (e.g. standard-setting). Yet many consortia are multi-faceted in their activities, offering programs as diverse as technical training, tradeshow participation, certification services and publishing. If the active representatives of a member company do not make the full range of these benefits known throughout their own company, the potential value of many of these benefits is likely to be wasted.
At times, the failure to sell the value of a consortium internally can have much more economically severe consequences. The author has more than once watched as companies have made huge investments in new consortia in order to create not only standards, but also trademarks and test suites intended to enable certification of compliance with the new standards. The primary goal of these consortia was to raise the value of certified products in the eyes of the potential customers for whom they were intended.
Yet when some of the member companies of these same consortia launched products compliant with these standards, their marketing departments did not embrace the branding program which had been launched, at considerable cost, by the consortium. As a result of the failure to gain “buy in” from the marketing (as well as the technical) sides of the founding companies, one of the major potential benefits of the consortium effort was squandered. Even the companies that did brand their products lost most of the value, since too few companies participated to create meaningful awareness of the brand.
There are many other less dramatic ways in which a company can fail to reap the maximum benefit from its consortium memberships, including:
- failure to define goals. Logically, a company needs to have a clear understanding of what it hopes to gain from joining a consortium. If it simply joins because most similarly situated companies are already members, then it is likely to make most of the mistakes discussed below
- failure to understand what the consortium has to offer. Properly investigating a consortium is not a difficult task. But companies sometimes simply do not attend meetings, or fail to participate in all of the programs to which they are entitled
- failure to maintain continuity. Due to staff turnover, companies frequently “forget” that they are members of a consortium, and thereafter fail to participate at all for the balance of a membership year, sometimes wasting thousands of dollars in pre-paid membership fees
- failure to communicate information internally to all potentially interested business unitsNot surprisingly, companies that find themselves faced with such a challenge either form consortia, or become the first members of consortia formed by others. Usually, they are more willing than other companies to make a large investment in the creation of a new organization, or at least to assume a greater risk that their investment will not prove to be effective.
- renewing without a careful review of sustaining value
III – Solutions
Happily, maximizing the value of participation in consortium activities can be a simple process, if it is set as an institutional goal.
3.1 — Institutionalizing Supervision. Ideally, a company will have a single administrator whose duties include monitoring how requests to join consortia are reviewed and approved, how the memberships are staffed if approved, and how memberships are re-approved (or rejected) at renewal time. For companies that already have a standards department, this is a logical home for this function.
3.2 — Planning a Participation Strategy. A company that joins consortia on a regular basis should have a process whereby the proponent of membership is required to prepare not only a business case for participation, but also a description of how membership should be staffed and utilized. That document should be used as a living guideline, and updated on an ongoing basis. The document should also function as a reference for the representatives that are charged with attending meetings and otherwise representing the member company. Finally, the plan can help ensure continuity and preservation of value in the face of staff turnover. If consortium supervision is centralized, the supervisor of the program can advise the proponent on how to research the proposal, and create the plan of participation. A template for the proposal should be readily available, to make proposal generation less laborious, and to permit the evaluation of proposals to be more objective on a comparative basis.
3.3 — Training Consortium Participants. While many consortium activities are deceptively similar to normal commercial programs, others are not. Further, acting outside the member’s corporate cocoon can require a representative to exercise talents, and necessitate the reordering of priorities, as they move from one world into the other. Finally, standard-setting is an inherently open, rather than proprietary, process. This can run against much of what has otherwise been programmed into a member representative’s consciousness through corporate training and culture.
For all these reasons, companies should not assume that the maximum value can be gained from consortium participation without some commitment to properly instruct (at least) its principal representatives. This training should not only include an orientation regarding what standard-setting and consortium activities are all about, but also an explanation of the employer’s process for participation, reporting and value maximization (as described below). Creation of a training manual for participation would represent a wise investment for a company that is a member of many consortia.
3.4 — Internal Communication. The larger the member corporation, the more effort will be required to ensure that all potentially interested units within the member company will be aware of their right to participate in the activities of a given consortium. The way in which membership is communicated and the appropriate resources encouraged to avail themselves of membership rights will vary, depending on the culture and existing lines of communication within a given company.
3.5 — Signing up the Right Business Unit at the Right Price. Many consortia have dues which scale depending on the revenues of the member. While most such consortia base their scale on the consolidated revenues of the entire corporate family, some permit subsidiaries, divisions or other business units with discrete business lines to join individually, with dues being based solely on the revenues of the business unit applying for membership. In such a case, and particularly where the subject matter of the consortium is of interest to only a small part of a very large corporation, a substantial saving can be achieved by applying at the business unit level. Conversely, if benefits need to be spread across the entire corporate family, then the parent company should submit the application, and accept the higher cost.
3.6 — Understanding “How Things Work”. Where a company wants to exert the maximum influence on an organization, obtaining a board seat or a committee chair can often be very useful. One of the principal reasons to be a founder or early member of a consortium is the degree to which board seats can be obtained, either as a guaranteed benefit of a top-level membership, or as a matter of practice (i.e., the seats are awarded on a “first come, first served” basis, until they are all gone).
The reason is that consortia need to attract a sufficient dues base and strength in numbers in order to launch with critical economic (and PR) mass. Offering board seats to founders is one of the most frequently used methods to attract initial members at the highest membership (and fee) level. While it is an imprudent gambit to make board seats perpetual for the founders (those consortia that pursue this route are – rightly – usually viewed with suspicion), the reality is that turn-over at the board level tends to be low for representatives who are conscientiously performing their duties.1
Obtaining committee chair privileges is usually more merit-based, although some consortia do limit the right to nominate a chair to only the top, or top two, classes of membership. However, offering the services and committing the time of a well-respected employee to act as a chairperson can often be an effective method of achieving this goal. Such a commitment should not be made lightly, as the success or failure of a given process is more highly related to the qualify of the chairperson than perhaps any other factor. Appointing an ineffective employee, or failing to provide that employee with the necessary time and incentives to properly perform her job, will undercut not only the consortium’s efforts, but the member company’s reputation within the membership as well.
Part of the job of the employee writing the business case for participation, or of the representative charged with maintaining it, should be “getting to know” how the consortium works, and developing a strategy for how to make the most of this knowledge.
3.7 — Committing Additional Resources. Consortia are chronically resource constrained. In consequence, companies that are willing to second employees to staff projects that would not otherwise be approved, sponsor marketing initiatives, host meetings, or otherwise provide support and assistance, can exert a disproportionate influence in an appropriate and useful fashion. In the case of sponsoring a meeting, the economic savings from permitting large numbers of sponsor employees to participate in a meeting without incurring travel expenses can even result in a net savings from sponsorship. Part of the job of the principal representative of a member company should be to look for opportunities as they present themselves.
3.8 — Launching Initiatives. Consortia are member-driven organizations, and as a rule, any member can propose a given initiative within the strategic mission of the organization. Prior to joining, it is wise to assess the degree to which a given organization would be receptive to adopting a given technical, marketing or other initiative in which a prospective member has an interest. Within each organization, there will be a process (part official, and part personal) for gaining buy-in for an initiative, and care should be taken in assigning the right representative to the process who has the personal skills to manage this endeavor.
In some cases, the most effective way to maintain support for a consortium’s committing its limited resources to a given process will be to seek a board seat, in order to make the case on a continuing basis to the appropriate decision makers. In all cases, seeking the support of other members will be useful, as will shaping the proposal in such a way as to provide the greatest benefit to the membership at large, and not merely to the proponent’s own business interests. Not surprisingly, offering to underwrite part or all of the start-up costs of a proposed initiative is frequently a necessary and appropriate technique to ensure success.
3.9 — Improper Staffing. Not surprisingly, by far and away the greatest number of problems are apt to arise as the result of improper staffing. The ways that staffing can be problematic are many and varied. Here is a sampling:
- appointing difficult employees to act as representatives. It is likely that not a single consortium has ever existed that did not have at least one person who became notorious for his penchant to leave no rat-hole unexplored, no tedious and unnecessary rule of order unutilized, and/or no rule of polite debate unviolated. Not only does such a representative hold back the achievement of a consortium’s goals (and therefore their employer’s as well), but it is likely that other representatives will give as little deference as possible to the proposals of the offensive representative (and therefore their employer’s as well). In consequence, good interpersonal skills should be a hallmark of member representatives.
- failing to ensure consistent participation. Technical processes (in particular) require the regular participation of specific individuals. This is true not only in order for a given representative to act effectively, but because many consortia take participation into account in a number of ways. For example, some prohibit voting or speaking by representatives that have not attended meetings consistently, and others take attendance and voting (obtaining quorum often being an issue at meetings) into account in nominating chairpersons and board members.
- failing to vote. Many consortia are surprised at how hard it can sometimes be to obtain the number of (even) electronic votes necessary to adopt technology, despite the fact that most consortia charge a higher fee for classes of membership that enjoy voting privileges. Good consortium citizenship demands exercising the voting franchise in areas that are not critical to a member as well as in areas which are, in order that quorum requirements can be met.
- private agendas. Both companies and their representatives can have private agendas. In the former case, other members usually will realize what is happening, and react accordingly to thwart actions based on inappropriate motives. In the latter case, an employer may be oblivious to the fact that their representative is more interested in resume building, job seeking, riding a particular technical hobbyhorse in meetings, or junketing. This is easiest to discover by occasionally sending more than one person to meetings.
- turf battles. Representatives, being human, can act like them. Sometimes this can work to the detriment of the employer, as the employer’s participation in other committees may be the victim of retaliatory action. An employee who is known to be overly proprietary is therefore not likely to be a good choice to propose for a committee chair.
- continuity of attendance at board meetings. Many companies send rotating representatives to consortium meetings, at times even at the board level. As a result, many consortia require consistency of attendance to maintain board seats. Others, recognizing that gaining access to senior management entails competing with busy schedules, permit substitute directors to attend meetings. However, a member’s own interests will suffer if its attendance is not regular. If substitutes are sent, then a serious effort should be made to maintain detailed communication between the appointed director and the substitute.
- failure to appoint the right board member. Everyone suffers if board attendees cannot speak for their companies. A board representative should not only be involved and knowledgeable, but sufficiently senior to speak for, and gather support within, her company. It is, of course, fair to request a consortium to send out materials in advance of a meeting and a detailed agenda, as well as notice of votes that are expected to be taken. This will often allow board representatives to caucus internally at their member companies before a meeting, and therefore to speak more authoritatively on behalf of their companies at a board meeting (at least if they have read the materials before they boarded their planes). If a company is not willing to nominate a sufficiently senior employee to represent it on a consortium board, all would be better served by it passing on the privilege. Hence, the participation plan for a consortium should assess whether seeking a board seat is justified, and then map out a plan for obtaining one (if feasible).
- continuity of representation at lower levels. A surprising number of companies become “lost” to every consortium every year, due to turnover of the primary member representative. Suddenly, the member simply ceases sending representatives to meetings, and eventually fails to renew its membership. This poses a dilemma for consortia, which miss the revenue and often cannot find anyone at the member company to respond to their inquiries. It also results in waste for the lost members, which sometimes see the value of their investment in the consortium to date prove to be worthless, or at least much depreciated. Maintaining a central registry of memberships and representatives can prevent this from happening.
IV – Summary
Maximizing the value of participating in consortia is anything but rocket science. Investment in a modicum of tracking infrastructure and the adoption of a modest amount of administrative supervision can ensure that an appropriate consortium, once joined, can prove to be a wise investment. Moreover, the expenditure of a small amount of extra effort or the sponsorship of a desired activity can often result in the ability to take a leadership position in a given organization. As a result, a conscientious member can often achieve a far greater benefit from its participation than the many other members that pay the same fees, but bring less deliberation and creativity to the process.
NOTE: If you participate in the standards development process or are a member of the management of a standard setting organization, please feel free to contact Andrew Updegrove if you have questions about this topic.
1 Given the pace of mergers, changes in business direction and economic stumbling in the high-tech business (as well as the prevalence of attendance requirements to maintain a board representative), enough board seats tend to become vacant at most consortia to provide a board representative to most interested members without too long a wait.