One hundred percent of board of directors and other executive leaders I interact with know of the blockchain. Not all are fans of cryptocurrency, but all seem to be deeply interested in exploring the business impact of the distributed ledger that makes cryptocurrencies work.
There are quite a few interesting use cases out there. Some may hold great potential. But there are also lots of interesting ideas that once you start asking questions don't make so much sense.
To help you ask the right questions, this article provides some executive level context on what the blockchain is.
At a high level, consider blockchain technology as a system that lets you distribute a ledger that records data and, depending on how it is implemented, can let everyone see the data in ways that prove its accuracy. Some blockchain technologies can do even more than that. Some solutions can provide blockchain capabilities just inside an enterprise. Some can provide ways to program contracts and monitor their execution.
What that as an introduction, here is my view of the things every executive should know about blockchain enabled technologies:
- Executives should have at least a basic understanding of how the technology works, including the technology of the blockchain behind bitcoin and the blockchain and computing fabric behind Ethereum, which is much more powerful in producing smart contracts. There are some good books on this topic. One we recommend is: Digital Gold: Bitcoin and the Inside Story of the Misfits and Millionaires Trying to Reinvent Money
- Executives should have a clear understanding that investing in cryptocurrencies is different than investing in blockchain solutions for your business. Investing in cryptocurrencies is a special topic and may also interest you (we recommend everyone open a Coinbase account and put at least a tiny bit of money into some of the currencies there), but for most companies the big investment you will want to make is in developers who can program blockchain enabled solutions (get your tech team learning the tool called Solidity).
- Executives should know that the use of the term "smart contract" in a blockchain context refers to computer programs that can be written to directly control the transfer of value when certain conditions are met. Smart contracts digitally facilitate, verify, or enforce the negotiation or performance of a contract, all without third party involvement.
- Although the blockchain will disrupt many industries, the one which may see the biggest impact fastest is the financial sector. Executives in this industry already know this. But all of us who are their customers also need to be thinking through this disruption. We can have a voice in how our financial services providers serve us and should be pushing them to do so smartly with blockchain enabled solutions.
- Executives should also be on the lookout for new capabilities from venture capital funded companies that can leverage the blockchain to accelerate or improve business functions for your own company. If your competitor works with a firm like this but you do not you could be losing out. If you leverage a partner before a competitor does you can beat them in the market.
- Consider the impact that blockchain technologies can have on your current company strategy. This is especially important if you are a board member or CEO. You should ensure your entire management team is smart enough on what the concepts are to be able to have intelligent discussion on coming opportunities and threats.
- Consider ways that smart contracts and blockchain technologies can improve your internal systems. Developers who know how to program blockchain solutions can provide applications that work inside your firm but deliver similar strong benefits as those that run on the public blockchain. We have seen proof of concept solutions like this already and are also seeing a rise in new commercially supported solutions that will soon be available for HR, Admin, Supply Chain Management and even cybersecurity.
- For executives in technical domains (the CIO, CTO, CDO, CISO), you will find it easy to work through tutorials that show how to build blockchain solutions yourself. I've built my coin and learned quite a bit in doing so. Building a coin has become the "hello world" of the new blockchain coding world, and doing that will give you more food for thought.
- As hinted about above, executives should also be ready to ask questions regarding any proposed solutions that leverages a blockchain technology. Ask, for example, why it is better than a solution that involves a modern database with smart encryption.
Maybe the most important recommendation for executives: View the blockchain with excitement! And channel that excitement into action to improve your business.
CTOvision will be providing more context on this topic in our newest category, Cryptocurrencies and Blockchain. To ensure you never miss a post, be sure to sign up for our newsletters and you will be alerted when we publish.