William Mougayar is a Toronto-based entrepreneur, investor and advisor to Consensus 2016, CoinDesk's flagship conference. He is also the author of the upcoming book, The Business Blockchain.
In this opinion piece, Mougayar discusses the common ways that enterprise businesses are seeking to establish and roll out blockchain strategies as part of their innovation initiatives.
Despite its rising importance in finance and business, the blockchain is not going to make a big impact until it reaches the highest level of corporate echelons, the boardroom.
While some boards have been discussing the blockchain, the nature of these discussions means they often treat their subject matter as a curiosity. Boards with blockchain visionaries driving innovative agendas from the top down are, without a doubt, the absolute minority.
For many, this is because they have not sought to define a blockchain strategy. For example, a serious boardroom discussion is not likely to happen until clarity emerges on the particular direction that an organization is headed toward.
This means establishing how the company can get organized to attack the issue; how various use cases should be selected, developed and deployed; and how the benefits of blockchain solutions will be evaluated versus existing legacy solutions.
But, fleshing out a blockchain strategy is not a simple task.
Typically, it starts in the middle layers of management when someone is tasked to marshall a company's internal resources and investigate the various questions and options.
But, even with a central orchestrator in charge, it takes some time for the blockchain topic to gain momentum, understanding and share of mind within senior executive ranks.
Still, organizations can benefit from understanding how others have navigated this path.
Here are three of the most common ways:
1. Building a lab
Some companies are funding a "Blockchain Labs" entity that includes software engineers who can get their "hands dirty" as soon as ideas come to the fore and need to be demonstrated.
Such organizations typically have an internal focus to "show and sell", or educate the blockchain's possibilities to other business units and departments within the organization.
The lab is sometimes part of the Innovation group that is chartered with importing the latest technologies into the organization by figuring out the intersection and integration points.
However, importing innovation is one thing, but applying it is another. The challenge will be not in the incubation of ideas, but rather in how these concepts get handed over to other departments and business units that serve as the real implementations playgrounds.
2. Task forces
Other organizations have formed an internal blockchain task force comprised of different business unit stakeholders, who meet and communicate on a regular basis.
One scenario I have seen with this option is to have two co-chairs of that committee, one from the business side, and another from the technical side. Just like IT, blockchains fall in the business-technology realm.
The challenge with this type of approach is that not all of these stakeholders may be at the same level of knowledge or motivation, and they may not agree on a given direction. The role of this group could be more about sharing and collective learning, rather than influencing a given direction.
Given the distributed nature of the task force approach, there is also a risk proof-of-concept initiatives won't be carried out with full diligence. POCs are notorious for reaching dead-ends, or not living-up to their expected benefits.
To be more successful, the task force will need to establish self-enforced guidelines and standards, so that the orchestration of activities continues to remain in sync.
3. Hybrid approach
The hybrid method is my favorite, because it combines the urgency of the lab approach with the organizational infiltration of the committee technique.
But to make this work well, you need to instill a central "blockchain Czar" role.
The origin of the czar analogy dates back to the reengineering days during the early 1990s when Michael Hammer and James Champy advocated this role in their book, "Reenginering the Corporation". The reengineering czar was that person who would become the rallying point for such efforts within a company.
Following the practices of process reengineering was business religion in its purest form, and it is my hope that blockchain initiatives and investments get the same treatment. For context, I held that business reengineering czar role at Hewlett-Packard back in the day, and I can vouch firsthand for the effectiveness of that approach.
The blockchain czar is responsible for removing obstacles within your organization, facilitating education, curating and sharing best practices, and overseeing the progress of various implementations across the organization. This job is a tough one, because it involves finding and obliterating old processes, instead of just automating or streamlining what is currently being done.
One of the activities to be undertaken under the hybrid approach is to find ideas within the various groups via a common discovery process, develop the proofs-of-concepts in the labs, then proceeding to implementing the best candidates with the business units who take direct ownership for them
Regardless of your chosen method, there are benefits in having at least one strong blockchain advocate who is a respected thought leader, bold communicator and an enthusiast about blockchain technologies.
The blockchain, in its fullest form, is a new strategic development platform. Strategic means that it is not just there to reduce costs and improve transactions latency. Strategic means that it needs to find strategic usages that can give you a leg up on your competition, or inject unique benefits to your customers.
To get on the board agenda, you need to showcase and explain the blockchain’s strategic role. The board wants to hear how the blockchain will give your company that competitive advantage, and not just how it's being tested here and there.
Best practices for internal approaches for blockchain strategies will be discussed during an upcoming panel at Consensus 2016, CoinDesk's flagship conference, with panelists who are leading blockchain initiatives from Barclays, Citibank, Deutsche Bank, Philips and Thomson Reuters.
Boardroom image via Shutterstock