6 Volvo Group: A global group
6.6 Externally oriented aspects
The externally oriented aspects of the standardization management approach are external participation (in formal standardization committees) and openness (in regard to internal specifications and solutions—for example, revealing them to external parties). Involvement in external standardization committees is key for Volvo representatives in terms of keeping themselves updated on the development of new phenomena outside their corporation, and thereby using this information for the rapid identification of risks and opportunities in the external environment. In addition, active involvement in external standardization processes is a means of influencing formal standards towards the particular conditions and specifications that best suit the company’s products and strategies, through contributing to those processes and offering solutions (that is, openness about internal specification and standards).
6.6.1 External participation
As mentioned above, Volvo representatives actively engage in external standardization committees in order to collect relevant information about the external environment by watching trends and developments in the industry.
Manager B: “…what is interesting is to know about technology trends and bring that back into the company. Where it is going. It is important so that we release products that are accepted in the market.”
Manager A: “So we are out there listening [to] what happens and [we] adjust towards what is new and give updates to our internal organization.”
Manager B, Corporate Standards: “Participation in external standardization can [allow us to provide] input on new ideas and technical challenges.”
The challenge of keeping up with technological progress, and, even further, remain in a position to pursue new opportunities in accordance with industry trends, is to some extent handled by Volvo through participation in external committees. Participation is a means of keeping an eye on the competition, observing, and understanding competitors; that is, representatives are essentially detecting what is happening outside the company, and henceforth introduce this (external) information to the company.
Thus, in combination with internal information, ensured by regular information exchange among the different parties possessing and managing internal and external information (that is, technical experts, standardization engineers, and management), a picture is formed regarding the company’s interests and how future actions are to be planned—such as which standardization areas are critical for the company, how the company will strategically plan forthcoming participation, and in which standardization bodies it should be active.
This effectual prioritization (which lies at the heart of Volvo’s assertive standardization management) is associated with the company’s active engagement in a number of external standardization committees, where standards specifications are contemplated and new knowledge is often created through participants’ negotiations, allowing a direct monitoring of other industry participants—namely, competitors.
Standardization engineer A: “We are involved in standardization on [a] national level but also on [an] ISO level, internationally. So in that way we know what competitors do. So, indirectly we are aware of that.”
Hence, through participation in external standardization committees, Volvo keeps a careful eye on competitors and general industry trends, in order to remain capable of pursuing its assertive standardization approach. Explicitly, since the company aims to be a step ahead technologically and lead standardization work towards favorable specifications, it cannot miss industry trends and technological evolutions. On the contrary, it needs to be as aware as possible of the competitors’ technological status. A resourceful way to do this is through regular participation in the arenas in which the various industry players conduct discussions and negotiations about the future of the industry; namely, the national and international standardization arenas.
6.6.2 Openness regarding internal standards
After their release, almost all of Volvo Group’s internally developed standards (up to approximately 90%, as stated by the managers of Corporate Standards) are published online and remain externally visible. Instead of protecting the standards behind passwords, anyone can find them on the company’s website just by typing in the document number.
The tactic of publishing internally developed standards aims to disseminate them and thus facilitates efficient coordination with other market participants, for the benefit of everyone. Only a very small number of internal standards are not externally visible by typing in the document number; these standards exclusively address intraorganizational application, meaning activities that the company conducts internally and whose disclosure would not contribute to the coordination with other market participants.
Manager F, Corporate Standards: “This 10% of standards that are not available are internal documents of how we are handling things inside the factories. We don’t want to show how we are handling [such] things … for example descriptions [of] how we paint, how we deal with safety, and so on. Those things are internal, just for Volvo Group; we don’t want Scania or any other company to see how we’ve solved that problem inside the company. Documents that we just need to have inside the company, then we don’t put outside the company.
But if they are documents that [will] be used by our suppliers, then we put them out.”
Furthermore, the managers of the standardization unit claim that it is important to distinguish between the activities that companies conduct purely internally and would rather keep secret (potentially retaining a unique approach then), and those that are addressed outside the company, such as communication with suppliers, where the company does not attempt to differentiate, but cooperates and coordinates with others, even competitors. On top of those base requirements, there is still plenty of space for competitors to differentiate and make their products unique, while industry coordination through the diffusion of common standards benefits industry players through great cost savings. That is particularly true (and of immense importance) for Volvo, in accordance with its corporate strategy, as will be further elucidated in later sections regarding the company’s overall strategy and hence the role that standardization management plays.
Openness differs from external participation since it specifically concerns the contribution to the standardization process—that is, being open in regard to internal specifications and solutions and introducing them into discussions and processes, as well as allowing internal specifications and standards be accessible by external parties (for example, by not protecting them with passwords). On the other hand, external participation does not concern the contribution to the process, but mainly attendance, and subsequently taking information in. In other words, together, those two aspects represent “inside-out” and “outside-in”
traits. It is important to distinguish between these, since external participation (outside-in) is an important trait of corporate standardization regardless of approach, while openness (inside-out) becomes important once participants aim to lead and shape standardization outcomes. That is, both external participation and openness regarding internal standards are crucial elements of Volvo’s assertive standardization management approach.