Accelerate Wisely, Avoid Disaster

The blockchain and cryptocurrency landscape is experiencing rapid growth. Globally, regulatory frameworks are converging to allow for a broader range of products and services. Companies that were previously hesitant are now joining in, while those already involved are working to bring new products to market. In most technology sectors, early adopters often secure a competitive advantage before mass-market adoption. As blockchain enters this phase, companies must decide whether to act swiftly or risk being left behind for decades. If your CEO believes there's no need to rush, your company may have already conceded defeat. For those choosing to stay competitive, speed is crucial. However, it's essential to remember that rapid progress often comes with increased risk. Effective risk management is vital for companies seeking to capitalize on this market without succumbing to catastrophic failure. There are several strategies that can help minimize this risk, and I've identified three key approaches. Firstly, it's essential to establish robust controls and operations that prevent past mistakes from recurring. This may seem like closing the stable door after the horse has bolted, but it's a necessary step to avoid repeating history. Implementing external audits, business controls, and best practices can help achieve this. Fortunately, we now have access to experienced professionals who can apply valuable lessons learned from the blockchain and crypto space. Secondly, companies must think strategically about the types and levels of risk they're willing to take. This includes technology risk, market risk, and counter-party risk. While it's possible to learn from all three, it's often beneficial to create controlled environments for testing and learning. I've seen companies jump to incorrect conclusions when things go wrong, often due to taking on too many risks simultaneously and being unable to identify the causes. Lastly, it's crucial to be strategic about what tasks are handled internally and what's outsourced. In technology companies, particularly those led by engineers, there's often a temptation to build everything in-house. However, this approach can increase risk and complexity. As a well-known entrepreneur once said, 'Consultants are a cheat code.' Leveraging the expertise of others can help reduce risk and complexity. Growth inherently involves risk, which increases with the speed of growth. Therefore, companies seeking accelerated growth, especially in emerging technology ecosystems, must prioritize effective risk management policies. It's essential to be prepared for the challenges ahead and maintain a focus on the road to success. Disclaimer: These views are the personal opinions of the author and do not represent the views of EY.