Roadblock: Industry PartnersBy Baselinemag | Posted 2004-09-01 Email Print
How to get competitors and partners to follow your technology-standards lead.THE OBSTACLE
Convincing CEOs from partners and competitors to adopt a common way of doing business is no simple task, as Kodak is finding out. The film giant is trying to create an open standard for ordering, storing and printing digital images, under the banner of the Common Picture Exchange Environment (CPXE). But to make it an industry standard, CPXE needs the backing of digital product manufacturers, image editing software vendors, online photo sites and retail photofinishers. When the first version of CPXE was released in February 2003, imaging and printing companies were enthusiastic. But 18 months later, only Kodak has delivered software and hardware adhering to CPXE, leaving this "open" marketplace undeveloped. What steps can you take to get executives at industry partners and competitors to support an initiative that is clearly In your interest-and maybe not so clearly part of theirs?
Show them the money. One of the biggest initial criticisms of CPXE was that the standard didn't clearly state how backers would benefit financially. Indeed, CPXE didn't even specify how transactions would be recorded if a customer used the services of two or more vendors to order, store or print a picture. Without these technical features in place from the get-go, analysts say project managers from Kodak's competitors and partners couldn't justify an investment to build CPXE-compliant products.
"Until everyone has a clear understanding of how they will benefit financially, [CPXE] won't take off," says Hans Hartman, an analyst at Future Image, a San Mateo, Calif.-based digital imaging research firm.
At the top of the list when Kodak and its partners developed the second iteration of the standard, which is in development and will be released in February, was a feature for recording transactions as well as a standard method for sharing the costs of storing images online.
Keep everyone involved. Kodak played a dominant role in the early development of the CPXE standard, but by first setting many of the specs and then being the biggest proponent of the standard, it was perhaps too involved.
"Kodak had to take a leadership position with CPXE," says an executive at one of Kodak's competitors. "But you don't want to create resentment by cramming your agenda down your competitors' throats."
In order for an industry standard to succeed, all participating companies have to feel they have an equal opportunity to contribute to the process. Standards organizers need to create an inclusive environment for business and a technical dialogue. Soliciting advice and feedback from technology partners outside of the scheduled standard-setting meetings is one way to open up the dialogue and create a sense of unity.
Create a sense of urgency. In an emerging market, it's hard for standard-bearers to convince potential partners to lock themselves into a set of guidelines they may have to adhere to for years. New markets change rapidly, and the argument of getting in on the ground floor is truly compelling only if it's clear that a new standard is not going to become obsolete soon. The key is often selling half an egg: that participants will make money sooner, and can improve the business as they go along. This amounts to convincing potential partners that a good standard today is better than a great standard a year or two from now.
Focus on the consumer. Customers-yours and your competitors'-can often provide the best incentive to participate in a standards push. Give your competitors real examples of how failure to make software and hardware work together leads to bad experiences with customers, and how good experiences boost sales. You have to turn digits into dollar signs.