The blockchain and cryptocurrency landscape is experiencing a rapid evolution. Globally, the regulatory framework is aligning, embracing an operating model that allows for a broader spectrum of products and services. Firms that have been hesitant are now diving in, while those already involved are strategizing on how to introduce a variety of new offerings.
In technology markets, the early frontrunners usually emerge long before widespread adoption occurs. As we approach what I believe is the era of mass adoption for blockchain, companies now face a pivotal choice: act swiftly or spend decades trying to catch up. If your CEO suggests, “there’s no rush; it’s still early,” your organization may have already conceded defeat.
For those committed to remaining competitive, speed is crucial. This principle applies not only on the road but also in the business realm. Many tend to overlook that “move fast” is often paired with “break things.” Therefore, for those eager to lead in this sector, effective risk management has never been more essential. When done right, there are multiple strategies for firms pushing ahead to mitigate the chances of critical failure. I’ll outline three key approaches.
The first step is to establish controls and processes that prevent previous issues encountered by other companies. It might seem like closing the barn door after the horse has bolted, but it’s vital because failing to do so could lead to repeating past mistakes, which is far more embarrassing than making entirely new ones. Moreover, implementing the basics isn’t overly complex: engage external auditors, set up business controls, and adhere to established best practices. We’re fortunate to be in a time where there’s a considerable pool of seasoned blockchain and crypto professionals who can share valuable lessons gleaned from experience.
Secondly, it’s essential for firms to strategically and clearly define the types of risks they are willing to embrace. There’s technology risk (particularly relevant with smart contracts and decentralized finance), market risk, and counter-party risk.
Each of these areas offers important lessons, yet it often proves beneficial to cultivate controlled environments for learning. One of my frustrations is observing individuals jump to wildly inaccurate conclusions when challenges arise, sometimes due to simultaneous risks that obscure the root causes.
Lastly, adopting a deliberate approach regarding what tasks to handle in-house versus what to outsource is wise. In tech companies, especially when engineers lead, there’s always a strong inclination to build. I understand; I lead an engineering team. It’s often more engaging than managing a vendor. “I built it” carries significantly more satisfaction than saying “I bought it.” Although I never imagined I’d refer to concepts popularized by influencers in business discussions, one notable insight is that “Consultants are a cheat code.” It’s straightforward: someone else has navigated similar challenges before. Leverage that insight to decrease risk and simplify complexity.
There’s no route to growth without some level of risk, and that risk escalates with the pace of expansion. Consequently, for organizations pursuing rapid growth—especially within ecosystems driven by emerging technologies—solid risk management practices are non-negotiable. Please ensure your safety by staying alert and focused on the path ahead.
Disclaimer: These are the personal opinions of the author and do not reflect the views of any organization.