Forbes: Five key elements of a successful business blockchain

This week's Forbes article lists five key elements that an enterprise blockchain must have to succeed.

According to the article, the role of the blockchain is driven by the network effect. In other words, the more participants on the shared platform, the greater the potential value. However, executives have found that trying to support their ecosystem is a daunting task. The potential to unlock trillions of dollars in value can be achieved by eliminating friction and opening up opportunities to enter new markets. But to achieve this goal, organizations need to transition from a model that has complete control over applications and data to a model that shares applications and data, a dramatic shift in thinking.

To complicate this shift, the technology is also new, with no recognized best practices or a recognized return on investment. However, executives of some companies are making progress, and best practices for blockchain collaboration are beginning to surface.

1. Focus on a single common problem

Nadia Hewett, head of the blockchain and distributed ledger technology project at the World Economic Forum, said

“Collaboration is the best when the entire industry is united because of real pain points, not just blockchains. Their pressure may come from regulators, investors, consumers or employees, but in any case, when the industry The trend will happen when faced with a problem that every participant must solve or affects each participant."

This requires executives to shift from an internal concept to an external one. Instead of exploring how to optimize their business internally, they are united to find the issues that all members of the industry ecosystem must address and then find a way to work together. This naturally creates complexity, so partners need to have a common reason to unite when trying to solve problems at the same time.

2, don't rush to plan a solution

Before the key industry partners are actively involved, the further you go the way you conceive, structure, and build the solution, the less the others will have a sense of belonging to the results, and the less likely it is to support it. Kim Harrington, head of the Bayer Blockchain Center of Excellence, explains, “It’s our number one priority to collaborate from the start. The technology has nothing to do with individual organizations. We are very cautious about engaging with the industry and engaging people in what we are exploring. Work, this is very important for how we organize our work.” This requires ensuring that everyone is in the same context, which takes time and patience. “In the early days, I spent more time on external meetings with potential partners and collaborators than on solutions,” Harrington said.

Because this technology is a new technology, potential partners bring a range of experiences and misunderstandings. Ensuring that everyone has a basic understanding of the new features of the blockchain is an important first step, before which participants can adjust the goals they want to achieve.

3. Engage people who can make difficult decisions on the governance side.

Many projects start with decisions on cross-organizational governance, opening up new horizons for cross-organizational governance. “In order for the blockchain to be meaningful, it must be decentralized, but in reality, companies rarely start from there. First, they tend to try to use a more centralized blockchain governance model because they are more efficient and easier. Execution,” said Mary Lacity, director of the Center for Excellence in Block Chains at the University of Arkansas.

“This is a continuous and slow migration to decentralized governance.”

Establishing a fair and inclusive governance system while ensuring control is not an easy task.

4. Don't forget the neutral third party

Neutral third parties are often an important part of the blockchain program in which competitors also participate. It provides a place to solve a variety of problems, which may include antitrust issues, and can manage projects. CVS Health CTO, Claus Jensen, said

“There is a need for a neutral third party that all participants trust, and they must be willing to let the third party define the security and governance architecture. It is not easy to give up this power.”

5, stay agile

We are still learning how to design a blockchain program that promotes collaboration and delivers continuous value to all participants. The most successful plan is to realize that they can't solve all the problems from the beginning, so they need to actively incorporate new insights and experiences into their work. “If you list the blockchain alliances that have achieved the greatest success, you will see that many of them are very agile,” Hewett shared.

“It involves business models, funding, and the way they communicate and think. This agile approach and the recognition that decisions made today may be important after a year and a half.”

Lacity explained that

“From the beginning, the alliance needs to constantly think about how to add value to each participant's business. This means developing and learning from mistakes.”

Companies have long been trying to capitalize on new technologies. Blockchain adds complexity because changes need to occur in multiple organizations simultaneously. This is not to mobilize an organization, but to mobilize an industry. This is a hard work. Harrington said, "Successful managers are born partners and they won't give up easily."

By Xiu MU

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Disclaimer: It is only the author's point of view and does not constitute investment advice. Investment is risky and at your own risk.