Profitable sustainable business

Why the CEO of Bosch looks to International Standards

By Gabriela Ehrlich

IEC Global Visions interviewed Franz Fehrenbach, CEO of Bosch, a company that has been operating successfully worldwide for more than 100 years. His message is clear: today, for an international company to continue to grow, it must have a long-term outlook and seek the right balance between society, the environment and sustainability. While the company needs to invest in R&D (research and development) and protect its intellectual property, it must also be able to access markets globally and eliminate wasteful duplication. International Standards and CA (Conformity Assessment) are the key to achieve this.

Global before anybody else

Bosch was a global company before anybody used the word globalization. It has been active for more than 100 years in the US (United States) and just less than 100 years in China and Japan. Already at the turn of the last century, close to 90 % of sales were achieved outside of Germany.

A long-term outlook

With its wide reach and interesting corporate structure, it has weathered economic storms surprisingly well. Ninety-two percent of the share capital of Robert Bosch GmbH is held by the Robert Bosch Stiftung GmbH, a charitable foundation. This structure allows the company to plan and invest long-term, safeguarding its future.

Sustainable business: more than a buzzword

Sustainable thinking is not new for Bosch. It is something the company has pursued already for many decades. This philosophy goes back to the founder of Bosch, Robert Bosch, and in recent years broader environmental considerations were added. Today, Bosch seeks to optimally balance its business thinking with society and the environment, and this allows the company to grow in a sustainable way. As Fehrenbach underlined: "In all our actions and activities, we have never strived for short-term profit maximization. We have always seen the need for a long-term outlook on things because the development of new products and systems takes time. If we had short-term profit optimization we would not be able to bring as many innovative products to market."

A definite no to duplication

As a company that is active in so many markets around the world, Bosch realized early on how important standardization is. In the words of Fehrenbach: "We are convinced that if we don’t have standardization in the different markets, we waste a lot of effort and money. So we have to participate, first of all, for our own benefit, but also for the benefit of our customers. They can be sure that we fulfil International Standards and have real tangible benefits."

Better use of resources

Fehrenbach strongly believes that participation in international standardization, for any company, is very important. "It’s the only way to open up broad markets and focus resources on the development and marketing of globally accepted products,” he says. “Participation in standardization allows a company to pre-empt and influence technology development."  His recommendation to any company that is not yet involved in standardization is, as he says, to "Get involved, don’t waste your money and manpower developing different products according to different standards in different markets."

IP and standardization are not a contradiction

Since a recurring argument against participation in standardization is the protection of IP (intellectual property), we asked Fehrenbach for his view on this topic. While he feels that IP needs to be protected, he is also convinced that it is not useful to have a huge intellectual property pool without the broad access to markets that results from International Standards and participation in their development.

International Standards above all

And while standards are important, Fehrenbach underlined how concerned Bosch is about the recent trend of multiplication and duplication in standards development:  "We see that there are regional and smaller organizations that try to organize things, and I think that’s totally the wrong way,” he says. “We need to involve the global standardization organizations which prepare the standards and requirements for all the markets around the world."

Bosch uses IEC International Standards and actively participates in IEC standardization work.