Five Critical Ingredients For Enterprise Blockchain Success

Blockchain benefits are driven by network effects: the more participants on a shared platform, the greater its potential value. Yet executives have found it’s a struggle to align the support of their ecosystems. At stake is the potential to unlock trillions of dollars of value by removing friction and opening access to new markets. But to get there, organizations need to move from a model in which they have complete control of their application and their data to a model in which applications and data are shared—a dramatic shift in mindset.

Further complicating this shift, the technology is new, without established best practices or proven ROI. Yet, motivated by its promise, pioneering executives are forging ahead and early signals of blockchain collaboration best practice are beginning to emerge. Here are five:

1. Focus your attention on a single shared problem.

“Collaboration works best when the industry is motivated to come together because they have a true pain point, not just because of blockchain,” explains Nadia Hewett, project lead for blockchain and distributed ledger technology for the World Economic Forum. “Pressure may be coming from regulators, investors, consumers, or employees, but regardless, momentum happens when the industry is facing a problem that everyone must solve or there will be consequences for everyone.”

This requires executives to shift from an internal mindset to an external mindset. Instead of looking internally for ways to optimize their own business, they need to jointly explore the problems that all members of an industry ecosystem must solve, and then find a way to work together on it. This naturally introduces complexity, and so partners are better off identifying a single, common motivator to rally around than trying to attack diverse problems all at once.

1. Resist the urge to mastermind a solution.

The farther you go down the path of ideating, architecting, and building out a solution before a critical mass of industry partners is actively involved, the less ownership others will feel they have in the result–and the less likely they will be to support it. Kim Harrington, who heads the Blockchain Center of Excellence for Bayer explains, “Collaboration from the very beginning is our number one priority. This technology is not about a single organization. We are very careful to reach out to the industry and bring people in on what we are exploring—and it’s been very influential on how we structure our work.” This requires making sure everyone is on the same page, which takes time and patience. “In these early days, I spend more time meeting externally with potential partners and collaborators than I do building solutions,” says Harrington.

Because the technology is new, potential partners come in with a range of experience and preconceptions. Making sure everyone has a baseline education on the new capabilities blockchains make possible is an important first step before collaborators can truly align on what they are looking to achieve.

1. Involve the people that can make difficult decisions about governance.

These projects are forging new ground in cross-organization governance, starting with the fundamental decision of how decentralized the project should be. “In order for a blockchain to make sense it must be decentralized, but in practice, it’s rare for enterprises to start there. First, they tend to experiment with more centralized blockchain governance models—they’re simply more efficient and easier to execute,” says Mary Lacity, Director of the Blockchain Center of Excellence for the University of Arkansas. “It’s a slow migration to decentralized governance, and a continuing tussle.”

Read Full Story at Forbes