Stop antagonising your partners. Blockchain requires a business review.
There is a growing gap between the need for organisations to use technology and how ready they are to benefit from it. Many of the promises we hear from the technology industry do not materialise. Part of it has to do with organisations not transforming fast enough. We are delaying the use of technology not to put more on our mouth than what we can chew. To put it mildly, we are not able to chew fast enough for the relentless amount of technological progress coming our way.
Blockchain, like other new technologies, is not living up to its business potential. As far as talking a lot about technology and seeing much less adoption and usage than we expected, blockchain is probably the jewel of the crown.
We know how hard it is to recover from a false start. In order to deliver the expected business value, we need to revisit how to start using blockchain and how to take advantage of it. We need to talk about the importance of leadership, the need to work with the right partners and other critical success factors. But let me start with something as important: Stop antagonising your partners.
I appreciate some companies out there are not moving fast, and their contribution to your business may be irrelevant soon. I also appreciate this represents a risk to your business and you need to prepare for it.
A blaming culture does not work
The way to manage this risk, however, is not to force the use of blockchain applications on your partners. We cannot right the wrong simply by recording each step in a distributed, decentralised and immutable ledger making sure we are ready to blame those who do something they should not be doing.
This blaming game creates resistance to the use of technology and is likely to spark discussions about data accuracy, data ownership, or security as reasons to delay and avoid the use of blockchain.
Another mistake we make is to say blockchain is going to help us to remove intermediaries and go direct. Not surprisingly, it creates an awkward conversation most channel partners prefer to avoid.
And yet, most solution companies talking about blockchain continue to repeat this kind of messages: “if your business requires interaction with multiple stakeholders (which one does not?) and there is an element of lack of trust, blockchain is for you”. Ouch!
Collaboration between stakeholders is one of the key organisational competencies in the digital era. I cannot think of a most disastrous way to start this collaboration than to make a strong statement to those partners about how little we trust them and how eager we are to get rid of them.
To all soft-skills consultants out there, it seems there is a massive amount of work for you to do on improving empathy and resonance…
Blockchain can create stronger partner relationships
At this point, you would be excused for doubting whether blockchain still has any business potential for your organisation, or if it is something to be avoided in the interest of preserving strong relationships with business partners.
Let´s tackle that concern. A blockchain is a strong tool for building a new and stronger relationship with your partners, one based on innovation and collaboration. Here are some of the business benefits awaiting those who use it:
• Proof of origin and transparency.
The value of a distributed ledger is being able to present to the world all the good things we do. In many industries like agriculture, or farming, customers demand to know how products have been grown, raised, or treated, what this means in terms of resources, or emissions, and if this is in line with their values and the producer´s statements.
Many organisations struggle to communicate this in a credible way and to gain customers´ confidence despite their good work. Blockchain is a way to broadcast good things to the world.
Smart contracts will allow us to transact in more efficient ways and to do it with clarity and transparency. While there are other technologies that allow improvements in efficiency, smart contracts have the dual benefit of doing it while also moving both parties (or all parties) in the direction of transparency and fairness customers want to see.
• Combined innovation and business transformation.
Two or more organisations can now engage in value creation activities and use blockchain as a vehicle for mutual value, strengthening their business models and growing their skills and knowledge at the same time. Blockchain collaboration is a catalyst for business transformation.
Concrete steps to make progress
Having established what not to do, here are a few rules to follow when we look at getting value from the blockchain:
• Remember the importance of the channel in your business. Have we forgotten the reasons why we engage with intermediaries in the first place? Whether we are talking about sales channels (distributors, resellers, etc), or key suppliers, we need to ask ourselves one question: are we in a position to do everything ourselves?
If we were to remove the companies in our value chain, chances are our sales results will plummet and the risks to our model will grow in a similar proportion.
• Focus on helping your channel to stay relevant. Instead of falling for the trap of thinking we can do with disintermediation, let´s use this opportunity to create stronger alliances with some of our partners. Best way to do this is to help them with their own transformation efforts and make sure any blockchain initiatives will bring value to them and to you.
• Choose your blockchain initiatives wisely. It is always better to start with things your partner is doing great and you both value. Leverage on what you have in your relationship and on things you want to showcase to the world.
• Transform the way you work with your partners by exploring and learning new things together. Blockchain is a catalyst for business transformation. Most knowledge workers do not have the right confidence or knowledge to transform their functions and this is a good opportunity for it.
• Remember it is a journey. Making new technology a normal part of the way you do business takes time. You will go through some periods when you see little or no progress. Think about the organisation your customers will want you to become. There are multiple rewards ahead involving customer confidence and experience, operational efficiency, or faster innovation.