Blockchain Short Story 016: Collaboration Paradox
In 2021, the World Economic Forum (WEF) published a report titled “Digital Assets, Distributed Ledger Technology, and the Future of Capital Markets”. This report highlighted a significant challenge known as the “collaboration paradox” within the finance industry’s efforts to harness ecosystem-wide advantages of Distributed Ledger Technology.
This collaboration paradox is hindering stakeholders from collaborating effectively and leveraging their collective strengths to advance the industry. The issue arises when the anticipated advantages of collaboration are undermined or negated by certain behaviors, practices, or systemic issues that obstruct productive teamwork. Without close ecosystem-wide collaboration, however, the long-anticipated benefits of DLT remain out of reach.
So far, I have identified the following obstacles:
➡️ Competitive Siloing: Organizations may recognize the value of collaboration but continue to operate in silos to protect proprietary information or maintain competitive advantage, thus limiting the depth and effectiveness of cooperative endeavors.
➡️ Investment Preservation: Organizations with significant investments in distributed ledger technology may find collaboration more challenging, as it could render some investments redundant. This prospect is difficult both to rationalize and to embrace.
➡️ Misaligned Incentives: Collaborative initiatives often stumble when the parties involved have differing goals, rewards systems, or measurements of success, leading to conflicts of interest and reduced willingness to fully engage in joint efforts.
➡️ Communication Barrier: Effective collaboration requires open, transparent communication. The paradox emerges when parties either cannot or choose not to communicate effectively due to cultural differences, technological limitations, or strategic withholding of information.
➡️ Trust Deficit: A foundational element of successful collaboration is trust among participants. The paradox is evident when the need for collaboration is recognized, but a lack of trust prevents the open exchange of ideas, resources, and strategies.
➡️ Loss of Control: Fear of losing autonomy over key decisions and strategies can deter organizations from engaging in full collaboration. This concern often arises from the belief that joint efforts may dilute individual authority and control over project directions, outcomes, and intellectual property.
➡️ Collaboration as a Sign of Weakness: Some entities may perceive the act of seeking collaboration as an admission of their own deficiencies or inability to succeed independently.
➡️ Desire for Learning and Individual Exploration: This inclination towards hands-on experimentation and the desire to independently navigate through the realm of DLT, while learning along the way, is a vital component of innovation and progress. However, this very positive drive also contributes to redundancy and inefficiencies, which are difficult to justify from a long-term cost perspective.
What are your observations?
