Leading practice discovery
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Leading Practice Discovery. A process of negotiating product characteristics, service delivery and risk tolerance through transparent interactions among a balanced group of market stakeholders. Similar to the "price discovery" process (also called "price discovery mechanism") which is the process of determining the price of an asset in the marketplace through the interactions of buyers and sellers. It is the process underlying an innovation system that requires interaction among stakeholders to turn an idea into a process, product or service.
Leading practice discovery (or "best practice discovery") results in a standard way of doing things that contributes to the value-add goals of organizations and industries. It fixes consensus on material, labor and risk tolerance to meet a desired goal. Leading practice discovery identifies the highest developed stage of technical capability regarding products, processes, and services, based on the relevant consolidated findings of science, technology and experience. It is distinct from the more commonly understood "standards setting process" and is the desired outcome in an ideal balanced market. However, because a balanced market is not possible (in public sector infrastructure markets, for example) standards setting is determined by the market participants and the result does not reflect accurate reconciliation of the competing requirements of safety and economy for all stakeholders. In this case, leading practice has not been discovered because of the lack of participation by all materially affected stakeholders.
In the parlance of market theory, technical standard development narrows the Bid-offer spread between Users and Producers; beating out inefficiencies in price discovery. The term "leading practice discovery" is an extension of this concept into the global infrastructure technical standard development platform where a balanced group of stakeholders reconcile the competing interests in a process that is accessible, transparent and provides due process. Conversely, where there is imbalance in market participants—as in the public sector in many nations; a large purchaser of infrastructure products and services—leading practice discovery is impeded which results in higher cost to the public sector.
All nations engaged in international standard development processes have a provide a forum for collective decision-making and an alternative to standardization through government regulation. All nations recognize that industry-developed standards are superior to those developed by a central-government. All aim to catalyze technological breakthroughs to advance national priorities. In the United States, standards organizations such as the Institute of Electrical and Electronic Engineers, National Fire Protection Association, American Society of Mechanical Engineers, Underwriters Laboratories, and NSF International, which are technical standards developers accredited by the American National Standards Institute (ANSI) inform the single vote that ANSI casts on behalf of the United States to the global standards-setting organizations in Geneva.
National standards organizations such as the American National Standards Institute (ANSI), the British Standards Institute (BSI), and the Deutsches Institut für Normung (DIN), set up an accessible and transparent platform for a balance of stakeholders to develop documents that reflect agreement on minimum product or performance characteristics . Use of these standard is voluntary.
In the United States, ANSI's "Essential Requirements: Due Process for American National Standards" criteria for balance are that, a) no single interest category constitutes more than one third of the membership of a consensus body dealing with safety-related standards or b) no single interest category constitutes a majority of the membership of a consensus body dealing with other than safety-related standards. The broad categories are:
- Producer (Seller)
- User (Buyer)
- General Interest
Consensus on a standards development committee means substantial agreement reached directly and materially affected interest categories. This signifies the concurrence of more than a simple majority but not necessarily unanimity. A refinement in these categories is possible, as in the NFPA's "Rules Governing Committee Projects".
Because the User-interest only represents 1/3rd of the vote on a well-balanced technical committee this means that stakeholders must forge alliances with like-minded stakeholders among the Producers and/or the General Interests in order to advance its own agenda for delivering value to the primary (educational and research) mission of the industry. Without the “User” interest, industry-specific standards developed according to the rules set by ANSI will not have the required balance of interests to receive accreditation as a document suitable for adoption in public law.
The consequence of market imbalance in the standards setting process as a result of the lack of participation of the public sector impedes leading practice discovery and raises the cost of public infrastructure.
Federal requirements for the use of private standards
US Office of Management and Budget (OMB Circular A-119) requires that federal agencies use technical standards developed by private industry before writing technical standards themselves
Essential Requirements: Due Process for American National Standards
Why Standards Matter, M. Anthony, D. Caleb, S. Mitchell, Facilities Manager
Choosing the Rules for Consensus Standardization, J. Farrell, T. Simcoe, RAND Journal of Economics
The Next Innovation Revolution - Laying the Groundwork for the United States, James Turner; Spring 2006, Innovations Journal
The National Technology Transfer and Advancement Act (United States Public Law 104-113) https://standards.gov/nttaa/agency/index.cfm?fuseaction=documents.PL104113
US Office of Management and Budget Circular OMB-A11 http://www.whitehouse.gov/omb/circulars_a119
White House Memorandum: Principles for Federal Engagement in Standards Activities to Address National Priorities http://www.whitehouse.gov/sites/default/files/omb/memoranda/2012/m-12-08_1.pdf
Strategy for American Innovation: Executive Summary http://www.whitehouse.gov/innovation/strategy/executive-summary
National Technology Transfer and Advancement Act – Plan for Implementation http://gsi.nist.gov/global/docs/pubs/NISTIR_5967.pdf