IDC forecasts worldwide spending on blockchains to reach $11.7 billion in 2022. A Deloitte survey of more than 1,000 “blockchain-savvy” executives found that 74% believe there is a compelling business case for blockchain technology and 84% believe it will eventually achieve mainstream adoption. The top blockchain consortia (such as Enterprise Ethereum Alliance, Hyperledger, and R3) each boast hundreds of corporate members.
All this activity could make you think that every senior executive gets why this technology has captured the attention of so many peers. But a secret lurks in corner offices around the world: many executives can’t explain what a blockchain is or how it could impact their business. “Don’t quote me,” wrote the CEO of a healthcare company after I announced I’d written a book to help educate executives on the opportunity in the space, “but I'm embarrassed to say I have absolutely no clue what a blockchain is.” The CEO of a data company shared, “It makes me feel dumb. I’m getting questions about our blockchain strategy, but I’m still trying to figure out if I care.” These and similar messages revealed a surprising level of vulnerability and frustration from senior executives.
Confused By Blockchains? You Are Not Alone
There should be no shame in this confession. Blockchains can be intimidating to even seasoned technical executives. They are staggeringly complex, disarmingly raw, and complicated by a seemingly distracting (yet crucial) tie to cryptoassets. We don’t yet have a broadly adopted “killer app” that demonstrates what blockchains make possible, like email did for the internet. In his book Radical Technologies, the urban designer Adam Greenfield calls blockchains “just fundamentally difficult for otherwise intelligent and highly capable people to understand.”
Blockchain consultant Jill Carlson explains:
This space is extremely multidisciplinary, cross-cutting economics, game theory, computer science, financial markets, governance, law, and many other areas. There aren’t many people who can be called subject matter experts in more than one of these areas—and each of these areas has its own jargon.
Spencer Bogart is a partner at Blockchain Capital, one of the oldest venture investors in the blockchain technology sector:
Less than 5% of the people I talk to outside the industry really understand blockchain technology—but many claim to understand it. When someone admits they don’t get it or what impact it will have, it’s a sign of self-awareness. It’s easily six to twelve months to even get to a basic level. But this is getting better over time as we learn more about the technology and where it will have impact.
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"There's real potential in blockchains to solve long-term industry problems,” says Dennis Becker, the CEO of Mobivity, who counts Subway, Round Table Pizza, and Smashburger as clients and is investing in a blockchain-based infrastructure. “But no matter what your background or how many degrees you have, it can take months to really understand how."
“It’s a real challenge for people who aren’t native to the space to onboard and participate effectively,” explains Brian Lio, the CEO of research and advisory firm Smith + Crown. “There are all these organizations doing thoughtful work across industries, but we lack a mature platform to provide real fundamental insight. It is difficult for new members of the industry to really understand the breadth of what is going on—and especially difficult to separate signal from all the noise.”
Execs Under Pressure: How Will Blockchains Disrupt?
But senior executives do have an imperative to forecast how blockchains, once more widely adopted and integrated, could disrupt their markets. Whereas many outside the blockchain community tend to measure the wherewithal of the nascent blockchain space based on the state of today's cryptocurrency markets, blockchain development continues to mature and gather disruptive fuel even through the recent market plummet. While still early (according to Gartner, only 9% of CIOs reported implementing blockchain-related projects or plans to within a year), we’ve seen from other disruptive technologies how quickly a company can learn, assimilate, and leverage them increasingly determines on which side of a widening digital divide they will fall.
More mature blockchain technology could widen this digital divide in several ways. First, it could drive new efficiencies for the companies that understand how to use blockchains by becoming an automated, secure backbone for payments and contracts, reducing paper and inefficiencies that still plague corporate ecosystems. Secondly, their unique feature set, such as the functionality to develop programmable assets, could trigger the development of all-new disruptive products and services. They could also put disruptive pressure on middlemen (and most businesses have at least some middlemen role) because they enable secure transactions without an intermediary. The impact could span nearly every sector and industry.
These are complicated, ecosystem-level plays that could take years to take shape. But the speed at which the market is evolving puts execs under pressure to understand disruptive potential, before there is a clear path to that disruption.
O’Reilly, a learning company focused on transformative technology, reports searches for blockchain on their learning platform are up 40%. “We’re seeing a lot of enterprise interest,” explains Roger Magoulas, vice president of research and head of O’Reilly Radar. “They're paying attention and working to cut through the hype because they know someone they compete with likely is. They don’t want to be caught off guard.”
So what else can you do? Here are three ways that executives are working to rapidly raise their blockchain literacy and that of their companies:
- Connect to knowledge already in your industry ecosystem: Hundreds of the world’s largest companies have joined consortia to collaborate, learn, and experiment together, and there are more than 60 consortia to choose from. While many are struggling with the complex politics of bringing together competitive organizations, others are working on promising pilots.
- Find passion within your organization: Mine internally for sometimes hidden pockets of passion and expertise. Blockchains, in particular, are a subject that captures the hearts and minds of a diverse range of people. You may have more resources inside than you think, and they could be anywhere in your organization. Many companies have been able to build a rich internal network of business experts who also have personal interest in the technology, which can be leveraged to help identify meaningful use cases and potential risk.
- Connect with the blockchain community: The space is characterized by rapid and globally dispersed development, and so it’s essential to plug your organization into the heart of the community—but it can take time to find credible thought leaders. Invest in identifying the most respected voices in your industry. Follow their work or even bring them in to help you get grounded in the dynamics that will influence your space as the technology becomes more broadly integrated and adopted.
Each of these approaches is not just about gaining knowledge, but connecting to a network of others who are also building capability. With the technology evolving so fast, a rich network is a cornerstone to understanding where disruption could start. But because some of the greatest promise of blockchains come from the new kinds of ecosystem-level collaboration they make possible, building this network accomplishes something more. It also lays the groundwork for faster concepting should your organization decide to more actively explore the technology. As PG&E blockchain lead Lydia Krefta explains, “Blockchains are inherently a distributed technology. Everyone benefits when knowledge is shared.”
IDC forecasts worldwide spending on […]