Trust comes in many different forms. We trust our friends because we believe they're well-intentioned and will act in our best interests. We even put our faith in strangers once we feel comfortable about their motivations and intentions. When it comes to blockchain, a solution that's supposed to inspire trust, business leaders struggle to buy in. That hesitancy stems from an uneasiness about what happens when leaders hand over troves of valuable business data to a technological solution they know relatively little about.
If executives and CEOs can't trust blockchain, how can they expect clients and customers to do the same? Many blockchain enthusiasts like to narrowly encapsulate trust with catchy phrases like “in code we trust” or “in crypto we trust.” The problem with those mottos is that they incorrectly equate trust with verification.
Trust involves something far more substantial. It's a sense of integrity to go along with a feeling of security. When businesses embrace blockchain, they must feel confident in the solution's benefits and verbalize them to the user base to ensure they feel secure about blockchain.
Cybercrime is a threat to all industries. A 2019 report from Cybersecurity Ventures predicts that cyberattacks will be responsible for more than $6 trillion in annual costs by 2021 – up quite a bit from $3 trillion in 2015. Unattended security compromises can destroy a company’s credibility and profit; building trust and transparency in tech like blockchain can save plenty of money down the line.
Trust in the current tech landscape is both a “high-value currency” and good business practice. Known names like Equifax, Target and Uber struggled to regain trust after their respective breaches, but it could be a death knell for smaller companies.
So why aren't leaders of businesses of all sizes breaking down doors to embrace blockchain? Companies certainly fear what will happen to their in-house data, but distrust of their peers and wariness regarding regulatory disruption also feeds into that apprehension. That's an odd sentiment considering that blockchain arrived on the scene through Bitcoin, a currency that allows transactions without any need for trust or government oversight.
Many C-suite members want to project honesty as a core corporate tenet to show value to customers. Leaders see the value of transparency, but find it hard to trust their technology teams or vendors to use keywords to drive revenue without building a project surrounding emerging technologies.
By being transparent about solutions such as blockchain, businesses can build trust and bring value to their consumers and clients with a well-thought-out process on how the data flows. It’s just a matter of finding the right approach.
Blockchain technology can be trusted, and it can build trust. Each transaction (block) has a unique ID number that corresponds to the previous block, and each block in the smart contract has a public key identifying the transaction. Public blockchains are completely transparent, with all the information available for anyone to see.
Blockchain isn’t designed to hold every last bit of data, but its small footprint makes it ideal for delivering the right data to the right people. Taking advantage of these benefits, of course, requires comfort with blockchain. Here are five great ways for business leaders to educate their clients and consumers:1. Teach the language.
Provide resources that will familiarize your customers and users with the technology. This will not only make the transition easier, but it can also clear up any misconceptions people might have about blockchain. For example, we routinely have calls with members of the C-suite who don't understand the difference between Bitcoin/Etherium and Hyperledger.
Make sure everyone understands that blockchain is a decentralized ledger for creating, verifying, and enforcing contracts. They should know that blockchain and cryptocurrency are not analogous, though. Blockchain is the platform for cryptocurrency that facilitates and enforces the transfer and record-keeping of currencies. Continuing to educate your customers and clients about blockchain puts them more at ease about using it as a solution.
Ensure that any technology you embrace benefits end users. A McKinsey study suggests that blockchain doesn’t have to eliminate transaction intermediaries to generate value. Its short-term dividends will come from reducing costs, a process which could take up to five years to reasonably materialize. It is possible for companies to start extracting value in the short term with the proper strategy, though.
Highlight the value proposition that blockchain provides to end users. Present case studies, testimonials, and other examples to highlight that value. Demonstrate how the basic functions of certain industries are more suited to blockchain solutions. For example, the core functions of financial management – transferring financial information and assets – align with blockchain's greatest strengths. Illustrate blockchain's applicability to end users to garner credibility for it as a solution.
Create pilot programs for select end users, using those results to help market your strategy to customers. For instance, Storj is an open-source storage provider that blends blockchain technology with big data. During its pilot program, Storj discovered that its decentralized approach could reduce data storage costs by 90%.
Use these kinds of pilot programs to unearth similar findings. Once you have the results, analyze and apply them to your current strategy and explain what they mean for customers and clients. The more you can prove that their convenience is central to your blockchain strategy, the more likely they are to have faith in it (and your company).
Most large companies today use multiple vendors to create a single product. This is true of car companies, furniture companies, and even organizations that provide the foods we eat.
For example, think about that leather couch you might have purchased from a leading manufacturer. The leather came from four companies in China before it was manufactured and shipped to your local store. The call center receives support for any wear, tear and fading that leather might encur. Through service agreements, the company dispatches its team to alleviate any problems and lead back to business as usual.
With blockchain, leaders can pull up unique information from call center support tickets to track the leather back to its source. Incorporate these insights into your development, using it to tweak specific portions of your service. This allows companies to re-evaluate their relationships with specific vendors to gain additional context on what might lead to problems and solutions.
My father purchased two faucets from a national retailer for DIY home supplies and services. One of the faucets had an issue with a bad washer, so my dad went back to the retailer and explained the problem. The support center explained that four different companies provide components of the faucet. The support specialist took a picture of the faucet, emailed it to the four providers, and my father received the washer a week later.
Blockchain can significantly cut down a process like this. Coupled with the enterprise resource planning software necessary to pull asset data on transactions, the source provider would have the necessary real-time info to solve problems in a timely manner.
As CEOs and consumers become more familiar with blockchain's workings and potential, they'll learn to trust the technology. It’s all a matter of cutting through the confusion of what blockchain is – and what it isn't. Once leaders are able to help customers and clients get past that initial confusion, blockchain will seem as transparent and trustworthy as an old friend.
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