This is a question almost every CEO is asking their CIO today.
CIOs, while preparing to respond to this question, have a few questions of their own:
- How pervasive is this technology?
- Is it just a passing fade or one for the longer term?
- What are the use cases relevant to our company, our industry?
- How do we go about understanding, and then implementing, this thing?
- Who can provide us with good information?
- Where is the technology on the maturity curve?
- Is our business ready to adopt this technology?
Of course, these questions apply not just to blockchain, but for any Technology that purports to be the next big thing. There are a lot of such technologies!
Not only do companies need to keep pace with the fast-changing environment and technological advances around them, but also participate early on to ensure they do not miss the next macro wave.
The story of Intel missing out on the smartphone has lessons for even industry leaders.
So how can companies have a technology strategy to ensure they are at the forefront of building competitive advantages? Here are some pointers in no particular order:
A Deloitte report states that only 8% of blockchain projects survive the first year. The report also indicates that 27,000 blockchain projects were launched in 2016. While the number of failures seems massive, it also reveals an interest in participating even with a higher likelihood of failure. The FOMO (fear of missing out) factor is starkly evident.
Companies do not want to miss out on the next big technology game-changer. It is good for companies to participate in pilots, co-innovate and learn. Like startups, acceptance of failures to a degree, should be built into corporate culture, to make these entities more nimble.
Build trusted partnerships:
You need a trusted, innovation partner. It is increasingly being recognized that no one can go it alone in the new Digital Economy. Your partner should bring the insights and the technology platform, since that is not your core competency.
Take the case of Under Armor. They have a trusted, innovation partnership with SAP which helps them work on a number of pilots that helps them “lead” their market. Successful pilots help Under Armor build competitive advantages and exploit value before the advantages become commonplace and extend to their competition.
In the pharmaceutical supply chain, Merck and AmeriSource Bergen Corporation co-innovated with SAP in a pilot to track serialized, saleable product.
Disagree, but commit
Another key attribute of the Digital Economy is speed. Amazon personifies this attribute with Jeff Bezos’ “disagree, but commit” policy, which allows projects to move ahead without buy-in from all parties. This significantly accelerates not only the decision-making process but also the innovation cycle.
Such a policy also helps inculcate a more nimble culture in the organization.
Set aside a venture fund: dollars and resources
You can emit all the right sounds, yet not do anything. Provisioning resources for these innovative bets signals company intent loud and clear. One step further in this direction would be to periodically assess the utilization of such resources. If not utilized or if underutilized, then some probing needs to happen. There is no dearth of initiatives and this underutilization could only mean that bolder initiatives are not being logged into the portfolio for assessment.
This is the key to technology strategy. However attractive and promising any technology is, some technology just cannot be applied to certain industries or functions.
When you earmark resources, you need to put in the right people with your industry experience. The technology partner can take care of the “how” part, i.e. how to set the technology up, how to work the proof-of-concept, but they depend on you for intimate knowledge of your industry and the problems that you are trying to solve.
Insights into processes, understanding of shipment volumes, error rates, issues with existing solutions, lessons learnt from past forays, etc. can only be provided by your team.
In conclusion, organizations must look to disrupt the status quo. Else they risk being disrupted. Most of the disruption is happening through technology. Every company is now a technology company. Corporations must stay abreast of the latest developments in technology.
The best strategy for futuristic technology, thus, is a combination of working with a trusted and able technology partner, having a culture of fast and low-cost co-innovation pilots and identifying the right use cases to tackle.
Happy to hear your thoughts in this context.