The Rapid Evolution of Blockchain and Crypto
The blockchain and cryptocurrency landscape is experiencing an unprecedented surge of activity. With regulatory frameworks around the world beginning to align, we are witnessing the emergence of an operational model that supports a broader array of products and services. As a result, companies that have previously hesitated to enter this space are now diving in, while those already involved are strategizing on how to introduce innovative offerings to the market.
The Importance of Speed in Market Entry
In the technology sector, early success often determines long-term viability. As we transition into what I believe is the mass adoption phase for blockchain technology, companies face a critical choice: act swiftly or risk falling decades behind. If your CEO utters the phrase, “there’s no hurry, it’s early days yet,” it may signal that your company is already losing the competitive edge.
Navigating the Risks of Rapid Growth
For those committed to thriving in this dynamic environment, the old adage “speed kills” rings true—not just on the road, but in business as well. It’s essential to remember that the mantra “move fast” also comes with the caveat of “break things.” Consequently, effective risk management has become an indispensable skill for companies eager to forge ahead. Here are three strategies to mitigate the risks associated with rapid expansion.
Establish Strong Operational Controls
The first step in minimizing risk is to implement robust controls and operational frameworks that prevent the missteps of the past. Although it may seem like a reactive measure, failing to learn from previous mistakes can lead to a far more embarrassing repeat of history. The fundamentals are not overly complex; incorporating external audits, business controls, and adhering to best practices can create a safety net. Thankfully, we now have access to a wealth of experienced professionals in the blockchain and crypto fields who can share invaluable insights from their experiences.
Strategically Assessing Risk Tolerance
Next, it’s crucial for companies to think strategically and transparently about the types and levels of risks they are willing to embrace. Risks can be categorized into several categories: technology risk (especially pertinent with smart contracts and decentralized finance), market risk, and counter-party risk.
Gaining insights from these risks is vital, but it’s often beneficial to establish controlled environments for learning. One common frustration is witnessing teams jump to erroneous conclusions when issues arise, often due to taking on multiple risks simultaneously without understanding their individual impacts.
Balancing Internal Development with External Expertise
Finally, companies must adopt a strategic approach to differentiate between tasks that should be handled internally and those that can be outsourced. In tech-driven organizations, especially those led by engineers, there’s a natural inclination to build solutions in-house. As someone who manages an engineering team, I understand the satisfaction of saying “I built it” versus “I bought it.” However, as popular content creator Mr. Beast aptly noted, “Consultants are a cheat code.” Leveraging external expertise can streamline processes and reduce both risk and complexity.
Embracing Growth with Effective Risk Management
There can be no growth without risk, and that risk tends to escalate as the pace of growth accelerates. For organizations aiming for rapid expansion—especially in ecosystems powered by emerging technologies—implementing comprehensive risk management policies is essential. So buckle up for your journey ahead and keep your focus on the road to success.
Disclaimer: The views expressed in this article are solely those of the author and do not reflect the opinions of EY.
