Corporate Dusk: How does the blockchain reshape the business world?

Our existing organization will face deconstruction and reconstruction, which is the trend of the times we face, and the opportunity for the future.

I believe everyone has an intuitive feeling: people who talk about blockchain now seem to be getting fewer and fewer. The virtual currency that once caused heated discussion was named by the market as “cutting the leek”, and many people therefore called “the blockchain is cold”.

Is this really the case?

According to Gong Wei, a professor of entrepreneurship management in China and Europe and a director of the CEIBS program, blockchain is a low-level technology that is being used more and more widely. A number of far-reaching trends are taking place, and the blockchain will bring profound changes in the future.

In 1494, the Italian mathematician Luca Pacioli used a chapter in his book "Analysis of Arithmetic, Geometry, Ratio and Proportion" to make a clear understanding of the underlying logic and underlying rules of the book for the first time. Expression.

Pacioli wrote in the book: "When a businessman records every business transaction, he should use the AD year as a time, so that they always remember to follow the ethics."

What is ethics in business scenarios? It is the spirit of the contract. The double-entry bookkeeping method and the spirit of the contract are closely related. In a sense, this is an institutionalized starting point.

Why is double-entry bookkeeping very important? Because a precise, scientific book is the basis for modern business . To this day, double-entry bookkeeping has a history of more than 600 years, and the development of modern business is based on it.

But today, we find that double-entry bookkeeping faces a big dilemma.

Double-entry bookkeeping records assets, cash flows, revenues, and profits, and is a result-based bookkeeping method.

  • Its first dilemma is the inability to document the entire process leading to this result. It is not a process book and cannot record the actions and decisions behind the results.
  • The second dilemma is that there is no complete record of the ROI (return on investment) of internal and external users , which makes it impossible for the company to accurately decompose and calculate the contribution of each employee (incentive “black box”), and the granulation of the incentive is very coarse; External users, especially the early loyal users of the company, can't enjoy the dividends brought by the growth of the company.

The emergence of blockchains has solved these dilemmas.

Two fundamental changes brought by blockchain

The blockchain is a new technology. Its essence is a book. I call it the book version 2.0, which can bring us two fundamental changes.

  • First, achieve precise incentives for effective behavior. Blockchain-based ledger 2.0 can correlate behavior with results to achieve accurate measurement and incentives.
  • Second, an accurate calculation of the inner/outer ROI is achieved to solve the two bottlenecks mentioned above (incentive "black box" and incentive coarse grain).

Any new technology has bottlenecks. But in some scenarios, the blockchain can indeed break through the dilemma of the book 1.0. Based on the blockchain technology, the centralized measurement method of the double-entry bookkeeping method will become the distributed measurement method of the blockchain, and the non-continuous method will also become the record and feedback of timeliness.

Let's take Kindle+ as an example to illustrate that this is the first law firm in the world to transform residential blockchain thinking.

There have always been some problems with the lawyer's incentives: the centralization of the incentives – the boss has the final say, the partners have the final say; non-continuous – often count the general ledger once a year, each lawyer is more difficult to do more accurately. This is a typical incentive for "black box".

However, the growth of the law firm is entirely dependent on people, so the precise measure of the lawyer's incentives and the calculation of the lawyer's ROI are actually very crucial. Therefore, Kindle+ has made a system that uses the blockchain incentives to replace the previous incentives.

  • First, Kindle+ defines rights. This interest has incentives for internal behavior, as well as exchange of equity and dividends.
  • Then, Kindle+ sets the behavior of how each behavior is linked to the equity, that is, the mechanism design. For example, there is an act called introducing customers. As long as this behavior is made, the corresponding equity is to receive 1000 tokens, which are confirmed by finance.
  • Finally, each action generates a smart contract that can be executed automatically . After the smart contract is generated, it is deployed through the blockchain, so that it can transition to distributed incentives, and the whole process cannot be tampered with.

The original motivation was a black box, and now it is clear at a glance. Every employee can see their actions and results, and each behavior is accurately measured in real time.

Let's look at an example. Regarding the revolution of the external ROI, the protagonist is the Wei Lai car that everyone is familiar with.

In the face of such a strong opponent of Tesla, Wei Lai is difficult to compete with it in most dimensions. The only dimension that can be shaken is the user. As the major shareholder of Weilai Automobile, Li Bin made a promise: the user who owns Weilai Automobile will eventually get a share of Weilai Automobile's stock cut out from his personal share.

In a sense, this means that when you buy Weilai Automobile, you become a shareholder of Weilai Automobile, and you can enjoy the company's growth premium in the future. Although the blockchain is not mentioned, the underlying logic of this mechanism is the typical blockchain thinking.

Change the three trends of the future

I think that the company system has entered the evening. The reason, the underlying logic of the company system is double-entry bookkeeping . Over the past 600 years, the premise of the company system has undergone profound changes, and revolutionary changes are imminent.

Sun Zhengyi once said: "If someone asks me what the stock price of a company is in the next year? I can't see it, but I can tell you how much the company is worth ten years later. The problem at hand will become noise."

The more hesitant, the more he must pay attention to the future. Looking at it now, which trends are happening? How will they change the future?

1. The power of the times has changed

Today's era of power has been made from the king, through the channel is king, into the stage of the user is king. As user rights grow larger, they will ask for a portion of the company's growth and will propose to control their own data rather than letting the company control the data.

Now some new enterprises have moved from data centerization to decentralization. They advocate that users really control their own data, and when the platform needs to call user data, the platform needs to pay a corresponding price. As the trend of users becoming king is evolving, there will be many new business models to destroy the original business model.

2. The technical form has changed

Account book 1.0 is rooted in the industrial revolution, while book book 2.0 is closely related to today's new technology.

Today's cutting-edge technology can be summarized in three letters: A-Artificial Intelligence, B-Block Chain, C-Cloud. The technical representatives of the account book 1.0 era are mechanical technology and hydraulic technology. Today, the center of the stage is a new technology form with artificial intelligence, blockchain and cloud as the core.

3. Organizational morphology has changed

Richard Scott, a well-known scholar at Stanford University, has detailed the path of organizational evolution in the book Organization.

  • The first stage of organizational evolution is the so-called rational organization, which is the organization of the industrial age, bureaucratic system, hierarchical, and everyone is working towards the same goal – to maximize the company's profits.
  • The second stage of organizational evolution is to become a natural organization. The ultimate goal of a natural organization is different from that of a rational organization. Rational organization is survival, and natural organization is entering an open system.

This textbook has been published for more than 20 years. The evolution path of corporate organizations is basically consistent with that of Richard Scott. From rational organization to natural organization, we finally move to an open system.

3 inferences about the future

I have several interesting inferences based on the differences in the power of the times, the changes in the form of technology, and the change in organizational form.

1. From the trilateral game to the Trinity

A company has three core stakeholders: shareholders, employees, and users. The interests between the three are in conflict and game. Whose interests should be put in the first place? In the history of modern business, the trilateral game is a problem that the traditional corporate system can never solve.

In the new organizational form based on the blockchain , the trilateral game will likely become a trinity, and corporate users may become one of the most capable and non-paid employees in the organization, and they can share the company’s premium and dividend.

2. Individual strength will bring fission effects

One of the underlying logics of the industrial age is the scale effect. The larger the scale effect, the faster the cost of the enterprise declines, and the higher the market share, which is a positive cycle. Therefore, in the era of industrialization, scale effect is the driving force for the development of the entire organization.

In the era of the Internet, the second effect was added on the basis of the scale effect. We call it the network effect. Internet organizations not only have economies of scale but also network effects.

What is the network effect? Whenever a new user joins, the value of the original 1st to Nth users increases, which is called the network effect. Network effects and scale effects are two completely different effects, but they all have a serious social consequence: the gap between rich and poor is widening.

The scale effect has widened the gap between the rich and the poor, and the network effect has further aggravated the gap between the rich and the poor. Because of the world of network effects, it is a world where winners are all-inclusive.

We hope that the fissile effects of individual users corresponding to the blockchain and the blockchain can hedge the network effect, stimulate the individual's power, and bring benefits to the whole society, instead of worsening the results of the existing technological evolution. The push to aggravate the gap between the rich and the poor will be something we do not want to see.

3. Existing organizational methods will be deconstructed and reconstructed

There is a saying in the Communist Manifesto: "All levels and fixed things have vanished."

This is also a true portrayal of corporate change in the account book 2.0 era.

Our existing organizational methods will face deconstruction and reconstruction, such as: communication methods, coordination methods, cooperation methods, incentive methods, conflict resolution methods, alliance methods, and value network methods. This is the trend of the times we face and the opportunity for the future.

Author: Ni Yunhua, public Number: Ni Yunhua new knowledge, everyone is a product manager columnist. Ten-year multinational management consultants have served PwC and IBM Global Consulting Services, providing consulting services to companies such as Huawei, Haier and Tencent, and management consultants for a number of startup companies; and the “Sharing Economic Trends”.

Source: Everyone is a product manager