Bitcoin

Managing identity-challenging technology: a framework. A multiple case study on DLT in the financial services industry

Bitcoin, blockchain, Blockchain, Business models, digital transformation, Distributed Ledger Technologie (DLT)

Managing identity-challenging technology: a framework. A multiple case study on DLT in the financial services industry. By Maxime Lubbers.

Two-thirds of organizations say that innovation is crucial to survival. However, less than a third say they are actually successfully innovating to drive growth and increase revenue (Trapp, 2017). Especially established organizations suffer from existing organizational structures when dealing with innovation (Chang et al., 2012; Tripsas & Gavetti, 2000). Besides the structure of the firm, the nature of the firm also influences its ability to innovate and adapt to change. For example, financial firms, that are risk-averse in nature, experience more difficulty than start-ups while innovating. It is even mentioned that renewing banks is a mission impossible (Betlem, 2018). Does this mean that it is impossible for banks and other financial institutions to innovate? No. However, as technology changes the way we do things, incumbents often focus too much on understanding the novel technology while neglecting the impact it has on the organization itself (Cámison & Villar-López, 2014).

Understanding the impact of innovation on identity challenges 

Organizations should question how innovations affect the mission and core business of the firm. Are financial firms, as we know them, still relevant in the future? How should and could they re-establish products and services to innovate and remain relevant in their changing ecosystem? When an innovation is also impacting the mission of a firm and thus challenging the organization’s identity, managing the innovation becomes more complex (Tripsas, 2009). Different types of innovation require distinct types of management and organizational capabilities (Verganti, 2008). Understanding whether an innovation is identity challenging or not is therefore crucial (Tripsas, 2009). Innovation is by its nature about novelty and change, while identity is rooted in stability and endurance. This implies a fundamental tension is created.

How could organizations manage the tension created by an identity challenging technology?

An example of an identity challenging technology is distributed ledger technology (DLT). DLT has the potential to disrupt the mission and core business of (financial) firms, as we know them. Existing firms can largely benefit from novel and identity challenging technologies. Unfortunately, the established capabilities of the firms often negatively influence the ability of the firm to respond to a technological change (Ulrich & Smallwood, 2004). In addition, even though it is known for radical innovations to create new dominant designs in which a new set of core capabilities are needed (Chang et al., 2012) its relation to organizational identity is left out. To be able to contribute to existing literature and to support managers in transforming their organizations the following question structured my graduate research: “How can established organizations successfully manage the implementation of identity challenging technology?”

The research question has directed this study towards the development of a grounded framework (see figure 1) that scholars and managers can use to increase their ability to cope with identity challenging technologies. In addition, two key factors that positively influence the ability of a firm to successfully go through the phases of the grounded framework are identified (see figure 2). This novel perspective towards capability development, positively influences the way organizations develop and adapt them to manage an identity challenging technology. If a firm does not incorporate the impact of the identity-challenging characteristic of the technology this can be problematic and result in costly and ineffective innovation practices. The findings of this study emphasize that established firms must do more than grasp novel technologies: they need to reconsider the context in which their firm is operating and developing capabilities.

Figure 1. Grounded framework “Successful management of Identity Challenging Technology”

Two identified key factors

As mentioned, I found two key factors that influence a firm’s ability to successfully walk through the five phases identified in the grounded framework: strategic alignment and absorptive capacity. Absorptive capacity is the firm’s ability to recognize the value of new information, integrate it, and apply to commercial ends. A crucial aspect of absorptive capacity is the firm’s ability to transform its structure, systems and behavior. Strategic innovation alignment indicates that both strategic and executive levels within the organization understand and support each other on the identity-challenging aspect of the innovation. Unfortunately, due to the risk-averse nature of financial firms, most of them did not have the capability to understand the identity challenging aspect that is required to scope the impact of DLT properly. To support managers in understanding where their company is at and how they can successfully manage DLT the two key factors are visualized in the matrix visible in figure 2. The different cases made visible in the matrix are independent organizations in the financial services industry that participated in my research. I placed them in the matrix based on multiple in-depth interviews that I analyzed.

Figure 2. Strategic innovation alignment and absorptive capacity matrix.

Enabling & developing organizational capabilities

Beyond the two key factors that are required for firms to successfully manage DLT, it should be stressed that the different phases require specific organizational capabilities. If a firm invests in an innovation lab, but moves existing hires into a novel context, it should be questioned whether these employees understand why they are moved there. The same accounts for innovating within core business processes. It has shown that the more autonomous an innovation lab is, the more productive the innovation practices and their implementations become. Considering phase 4, it becomes clear that firms need to understand whether DLT is a fitting technological enabler for their business problems. By solely developing DLT related capabilities a business problem will not come to the surface and will thus not be solved.

If firms do not reconsider their organizational design, including governance structure and systems, it is impossible to develop a strategy and capabilities that facilitate the firm in innovating and remaining relevant in the (near) future. If an established firm can create a new context in which it facilitates its business and creates its customer value it becomes possible to compete with fintechs. They might even include them into their ecosystem. A new context facilitates new ways of thinking; doing and innovating which at the same time provides a fruitful perspective on capability development.

Personal note on DLT in the financial services industry

As the financial services industry is by nature risk-averse and highly regulated it is not the easiest sector to experiment with emerging technologies. Let alone implementing them. However, as customers are getting used to seamless, mobile and individually optimized services, financial firms need to act and innovate. Innovation is essential for survival as fin-techs and other financial start-ups are offering extremely competitive services. Solely focusing on emerging and identity challenging technology such as DLT is however a major pitfall. Many firms focus on understanding the ins and outs of novel and trendy technologies, however forgetting that the technology should be used as a means to an end. Technology is not an end, it is a means that could optimize multiple administrative and business processes.

Firms should wary that they focus on the business problems they need to solve for their customers.

Keeping up to date with technological trends is important, understanding what business problems are present is however key. Without a thorough understanding of the source of the problem, no technology will support a financial firm in creating that smooth and seamless experience the customer is already expecting.

Sources

  • Betlem, R. (2018). Bestaande Bank Vernieuwen is Mission Impossible. Retrieved June 6, 64 2018. From: https://fd.nl/beurs/1257047/bestaande-bank-vernieuwen-is-missionimpossible.
  • Camisón, C., & Villar-López, A. (2014). Organizational innovation as an enabler of technological innovation capabilities and firm performance. Journal of business research, 67(1), 2891-2902.
  • Chang, Y. C., Chang, H. T., Chi, H. R., Chen, M. H., & Deng, L. L. (2012). How do established firms improve radical innovation performance? The organizational capabilities view. Technovation, 32(7-8), 441-451.
  • Trapp, R. (2017). Why Business Leaders Continue to Struggle with Innovation. Retrieved June 3, 2018. From: https://www.forbes.com/sites/rogertrapp/2017/04/10/why business-leaders-continue-to-struggle-with-innovation/#4a153f3842de.
  • Tripsas, M., & Gavetti, G. (2000). Capabilities, cognition, and inertia: Evidence from digital imaging. Strategic management journal, 1147-1161.
  • Tripsas, M. (2013). Exploring the interaction between organizational identity and organizational design in technological transitions. Working paper.
  • Ulrich, D., & Smallwood, N. (2004). Capitalizing on capabilities. Harvard business review, 119-128.
  • Verganti, R. (2008). Design, meanings, and radical innovation: A metamodel and a research agenda. Journal of product innovation management, 25(5), 436-456.

Bio Maxime Lubbers

Maxime is an ambitious and driven graduate from the University of Amsterdam. She successfully pursued two master degrees in Entrepreneurship and Digital Business. She aims to be the connection between business and technology as it allows her to solve problems by combining her passion and growing knowledge of technology with her other passion for people. For her final graduate internship, she researched which organizational capabilities established financial firms need to be ready to successfully manage Distributed Ledger Technology (DLT). If you are interested in following Maxime you can find here on LinkedIn

Blockchain Technology – A Cure for Pharmaceutical Counterfeit (1/2)

Big Data, Bitcoin, blockchain, Blockchain, data, Distributed Ledger Technologie (DLT), Innovation, Inspiring, technology, Trends, Trendwatching

Part I – Current status, Impact on the Industry

The use of Blockchain for the pharmaceutical industry has been speculated and discussed by many different entities and stakeholders for quite some time already. Blockchain is thought to address the burning platforms pressuring the pharmaceutical industry, and to possibly optimize its supply chain operations.

The burning platform in the pharmaceutical industry

The one big burning question in this context is whether the pharmaceutical industry is ever going to embrace the long awaiting digital revolution, or if they are going to bundle their forces in the act to avoid the inevitable? Although pharmaceutical R&D is driven by innovation, this feature is not so much blended into their general activities and operational processes. Already being one of the most conventional and traditional industries, the organizational hierarchy and strong fragmentation of the pharmaceutical industry only further strains the ability of companies to embrace novel technologies, such as Blockchain. Responsibility of patient health and safety carried by the pharmaceutical industry makes stakeholders rather hesitant towards novel technologies and rules out the opportunity of a trial-and-error-like implementation approach of technologies.

Blockchain in pharma, fighting the falsified instead of diseases

Regardless of their ignorance, the pharmaceutical industry has already been confronted with multiple burning platforms. Counterfeit is a continuously increasing problem across the pharmaceutical supply chain, conveying major consequences for patient health and company performance. Counterfeit products either contain a too high or too low concentration of the active ingredient, reducing the clinically proven efficacy of the product. Apart from a deviating dosage, counterfeit products may contain excipients being different from those displayed on the package, which may affect the efficacy of the active ingredient or cause unpredicted side-effects to patients after administration. Although in most cases this may only cause modest discomfort for the patient, in other cases counterfeit products can cause severe adverse events and lead to hospitalization or even lethality in its extreme. It is therefore necessary to eliminate pharmaceutical counterfeit, the sooner the better. To facilitate the pharmaceutical fight of the falsified, governments have enacted serialization regulations, obligating the pharmaceutical industry to make each individual product traceable along the entire supply chain. This allows every stakeholder to, at any given point in the process, confirm the authenticity of the product.

Trust, the challenge & the opportunity 

Circulation of illegitimate pharmaceutical products does not only put patient health and safety at stake, but also has a damaging impact on the business operations of pharmaceutical companies. As long as counterfeit keeps on existing, pharmaceutical companies are not able to assure quality and safety of their products. This has an eroding effect on their reputation as perceived by the patient as well as by other influential stakeholders, such as physicians, specialists, pharmacies, and regulatory bodies.

The inability of pharmaceutical companies to deliver product quality and safety has a direct effect on their revenue.

A decline in trust has a diminishing effect on sales. Additionally, sales of counterfeit products take away the incremental revenue of pharmaceutical companies. Thus, apart from protecting patient safety and product quality, the pharmaceutical industry is in an overwhelming need to safeguard and protect its reputation and revenue.

Curing the pharma counterfeit

Counterfeit products are incredibly difficult to identify by the naked eye, making it complicated to reveal and eliminate these products by human efforts solely. A technological tool with the capacity to enable end-to-end traceability could cure this pain point. Technically, Blockchain has the capacity to completely revolutionize the pharmaceutical industry, its processes, but above all to address the burning platforms and cure counterfeit. Its immutable character makes mutual trust and the need for intermediary parties redundant, while safeguarding secure storage and exchange of sensitive information.

Practically, however, unaligned objectives of industry stakeholders, a lack of trust in the technology itself, and the absence of willingness and often the guts to further explore the opportunities of Blockchain stagnates the utilization of these capacities.

As clearly described in Enterprise Blockchain: Are We There Yet? by Sebastian Wurst (Accenture Strategy, Munich), the unique value and at the same time the challenge is in developing a Blockchain solution that perfectly fits an enterprise setting. The abstractness and technical complexity should be converted into a commercial concept, in order to fully unlock Blockchain’s business value for any industry, and the pharmaceutical industry here in specific.

Blockchain in pharma: No success until mass adoption?

Along the way of praising Blockchain’s potential, we should not forget to touch upon the expected – disruptive – impact of Blockchain on company business models. Given the comparatively low extent of industry digitalization, current business models of pharmaceutical companies do not inherently support the implementation of a highly complex and abstract technology as Blockchain. Although some believe that Blockchain-enabled business models are on the rise, others recognize the need for only small adjustments to be made by the industry to successfully integrate Blockchain in their processes.

The largest adjustment required is said to be targeted at the mindset and core values lived up to by industry stakeholders and employees.

Cooperation, interoperability, and transparency are not naturally fostered by the pharmaceutical industry, being in an almost direct opposition to the core concepts of Blockchain. Additional education on Blockchain would increase the understanding of the technology, and possibly mitigate the risk anticipated to come with implementation. Altogether, the pharmaceutical industry may expect to be confronted with many different challenges along the way to adoption, making the successfulness of Blockchain an uncertain parameter. To address these challenges, it will require strong incentives to encourage and solid recommendations to point the pharmaceutical industry in the right direction and unlock the synergy between business and technology.

Biography

With a background in Pharmaceutical Sciences, Marlou is currently in the last stage of the Master’s program Science and Business Management, pursuing her passion of unlocking the synergy between life science and business. Her ambition is to improve and strengthen the collaborative relationship of life science and business development, through encouraging communication and cooperation between the different fields. After finalizing her graduate internship at Accenture Strategy, The Netherlands, focusing on the potential of Blockchain for the pharmaceutical supply chain, Marlou is starting a PhD in human psychopharmacology at Swinburne University, Melbourne, Australia, striving for the aspired career in the pharmaceutical industry.

 Image sources

Image 1, Wharton: ‘Trying to Recapture the Magic’: The Strategy Behind the Pharma M&A Rush

Blockchain: cryptocurrencies and the limitless other applications of this technology

Bitcoin, Blockchain, Business Model Innovation, Business models, Distributed Ledger Technologie (DLT), Innovation

Today I was asked to present about Blockchain, cryptocurrencies and the limitless other applications of this technology for a group of 60 students.

Are you interested in a key note or workshop as well, let me know via a LinkedIn message or via a comment below this post.

 

Vandaag heb ik gesproken voor een groep van 60 studenten over Blockchain, cryptocurrencies en de vele andere mogelijkheden en toepassingen van deze technologie.

Geinteresseerd in een keynote of workshop, laat het me weten via LinkedIn of in de comments hier beneden en ik neem contact met je op.

What happens with Blockchain in the Dutch government?

bitcoin, Bitcoin, blockchain, Blockchain, Business Model Innovation, Business models, Distributed Ledger Technologie (DLT), Innovation, Inspiring

Are you interested what happens with Blockchain within the Dutch government?

Make sure you look out this 389 pages counting .pdf. In this document called: Results Blockchain pilots june – november 2016 there is a very nice overview on a diversity of Blockchain pilots within the Dutch government.

Verkenningen_Pilots bij Rijksoverheid_Resultaten blockchainpilots jun-nov 2016

Source: DA2020

 

If you want to share your thoughts on Blockchain within the Dutch government you can join our community:

Blockchain voor Overheid

Blochchain: re-organizing productivity as we know it

bitcoin, Bitcoin, blockchain, Blockchain, Business Model Innovation, Business models, Distributed Ledger Technologie (DLT), Innovation, Inspiring

Blochchain is a Distributed Ledger Technology (DLT) which has a huge potential to re-organize productivity as we know it.

Together with Eddie Altenburg, Daan Bunte & Dibran Mulder, I wrote this whitepaper on Blockchain (Dutch) called: “Blockchain, de hype voorbij!”

 

Blockchain is een Distributed Ledger Technology (DLT) welke een enorm potentieel biedt om productiviteit zoals wij het nu kennen te re-organiseren.

Samen met Eddie Altenburg, Daan Bunte & Dibran Mulder,schreef ik het whitepaper:”Blockchain, de hype voorbij!”

Blockchain (government) & Cryptocurrency – meet-up aftermovie

bitcoin, Bitcoin, blockchain, Blockchain, Distributed Ledger Technologie (DLT), Innovation, Inspiring

English: After movie of the event: “Blockchain & (investing wisely in) Cryptocurrency” the first meet-up in the Den Bosch region where Eddie Altenburg, Menno Pietersen and Rick Bouter spoke around the themes: What is Blockchain? What is happening with Blockchain in the Dutch Government? How to invest wisely in cryptocurrency? Bitcoin, Ethereum, WAVES, TenX, Aragon, Litecoin, NEO, ICONOMI and more.

Dutch: After movie van het event: “Blockchain & (verstandig investeren in) Cryptocurrency” de eerste meet-up in regio Den Bosch waar Eddie Altenburg, Menno Pietersen en Rick Bouter een presentatie gaven over: Wat is Blockchain? Wat gebeurt er met Blockchain binnen de overheid en hoe kun je nu verstandig investeren in cryptocurrency? Bitcoin, Ethereum, WAVES, TenX, Aragon, Litecoin, NEO, ICONOMI en meer.

Blockchain & (verstandig investeren in) Cryptocurrency door Eddie Altenburg, Menno Pietersen en Rick Bouter from Rick on Vimeo.

Bitcoin: A Peer-to-Peer Electronic Cash System

bitcoin, Bitcoin, blockchain, Blockchain, Distributed Ledger Technologie (DLT), Innovation, Inspiring

Initial Bitcoin paper by Satoshi Nakamoto

Abstract. A purely peer-to-peer version of electronic cash would allow online
payments to be sent directly from one party to another without going through a
financial institution. Digital signatures provide part of the solution, but the main
benefits are lost if a trusted third party is still required to prevent double-spending.
We propose a solution to the double-spending problem using a peer-to-peer network.
The network timestamps transactions by hashing them into an ongoing chain of
hash-based proof-of-work, forming a record that cannot be changed without redoing
the proof-of-work. The longest chain not only serves as proof of the sequence of
events witnessed, but proof that it came from the largest pool of CPU power. As
long as a majority of CPU power is controlled by nodes that are not cooperating to
attack the network, they’ll generate the longest chain and outpace attackers. The
network itself requires minimal structure. Messages are broadcast on a best effort
basis, and nodes can leave and rejoin the network at will, accepting the longest
proof-of-work chain as proof of what happened while they were gone.

Source: Bitcoin.org

Here is what the 500 million dollar ICO of TON (Telegram Open Network) looks like

bitcoin, Bitcoin, blockchain, Blockchain, Business Model Innovation, Distributed Ledger Technologie (DLT), Innovation

The Telegram Open Network (TON) will be a “third generation” blockchain with more efficient transaction and scaling capabilities than current solutions like Bitcoin and Ethereum

Source: TNW

After movie: Blockchain lead masterclass

bitcoin, Bitcoin, blockchain, Blockchain, Business Model Innovation, Business models, Distributed Ledger Technologie (DLT)

At the end of 2017 I organized and attended the Blockchain lead masterclass given by Paul Bessems. Paul is renowed Blockchain Consultant and founder of Weconet in the Netherlands. Here you can view the aftermovie of this two days full of Blockchain inspiration.

“Blockchain, de hype voorbij!”

Bitcoin, Blockchain, Business Model Innovation, Business models, Caesar, Caesar Experts, digital transformation, Distributed Ledger Technologie (DLT), Innovation

Naar aanleiding van het event: “Blockchain en kansen binnen de overheid” van begin oktober bleven vragen binnenkomen bij Caesar Overheid over Blockchain. Vragen over wat Blockchain en Distributed Ledger Technology zijn. Hoe je tot Blockchain use cases komt, maar ook hoe je van concept naar experimentatie fase gaat. Kortom genoeg vragen om een whitepaper over te schrijven. Om deze reden lanceert Caesar het whitepaper met als titel:

“Blockchain, de hype voorbij!”

In dit whitepaper hopen de schrijvers drie vragen te beantwoorden:

1. Wat is Blockchain?

Hier gaan we in op de technologie Blockchain, wat Digital Ledger Technology is en wat bijvoorbeeld digitaal vertrouwen is. Ook gaan we in op de werking van Blockchain en open en closed Blockchains.

2. Wat gebeurt er binnen de (overheids)markt?

In dit gedeelte geven we een overzicht van pilots welke plaatsvinden binnen de overheid. Hier kijken we naar de huidige situatie van een scenario, de impact en het concept van Blockchain en de waarde ervan.

3. Hoe moeten wij als organisatie nu concreet beginnen?

Hier geven we een aantal concrete tips om aan de slag te gaan met Distributed Ledger Technology (DLT).

Benieuwd hoe ik je kan helpen in het experimenteren en organiseren van Blockchain? Laat het weten in de comments en ik neem contact met je op om de mogelijkheden te bespreken.

Meer weten over Blockchain en wat er gebeurt binnen de overheidsmarkt? In de LinkedIn groep Blockchain Overheid gaan we hierover verder in gesprek.