How executives should consider crypto

You are a leader: a CEO, a nonprofit CEO, an elected official, an investment manager. As such, your job is to see the future or – at least – how and from where that future comes to you. If you are an exceptional leader, you are one step ahead of this, actually creating the future you will be dealing with. The success of every decision you make hangs in the balance. Your organization’s very existence depends on your unique ability: vision.

This is nothing new. “Change is the law of life,” said John Kennedy. “And those who only look at the past or the present are sure to miss the future.” Nothing new there, but there is something new entering the mix: the tempo of change. If we trace the history of progress, defined here as the invention or discovery of civilization-changing phenomena—stone tools, controlled use of fire, clothing, agriculture, alphabets, electricity, banking, movable type, steam power, telegraphy, photography, electric light, airplanes, radio, medicines, television, space travel, internet, robotics, social media, mRNA, artificial intelligence, cryptocurrency – we see an interesting pattern. Despite this woefully incomplete list, we understand that throughout history, the true civilization-changers come to us less time after the one before it than one took after its predecessor.

Your leadership challenge

Which brings us to a management challenge, namely how to deal with these changes at technical, social and ethical levels. The most fundamental of these considerations—involvement—is the first question: Do we get involved or not to begin with?

Crypto is a good example, but first…

History is full of these successful decisions or failed non-decisions. For example, just after World War II, when jet engines on airplanes proved viable and applicable for commercial flight, Boeing jumped on the idea, while Douglas backed off. The result? Boeing’s 707, a large, lumbering, 4-engine craft, opened the game quite successfully. By the time Douglas realized that and countered with its DC8, Boeing’s lead was insurmountable. In the late fifties, with commercial jets a certainty, Boeing accepted the challenge of building a shorter-range aircraft, good for high-traffic routes such as New York-Miami. Their answer was the wildly successful 727 which for years had no competition because… why? … Douglas retreated. When Douglas finally realized (yet again) that they couldn’t see the future, they came back with the DC9. Good flight, but a day late and a dollar short.

Then Boeing changed aviation once again with the wide-body concept: the 747. Then Douglas gave the world the DC-10, a favorite among crews and passengers, but late to the party again. It is the ongoing story of the difference between seeing the future and either embracing it or not. Actually, this story was about one player creates the future while the other shrank from the challenge.

Of course, this could go the other way. Without going into too much detail, consider how much money was lost by many people and companies who gambled on the rotary engine for cars after the war. It was a positive action that made the participants regret the decision.

Possible outcomes

So as a leader, here’s how any forward-looking decision can shake out. You can: (1) Seize the day, be right and enjoy success; (2) Seize the day, make the wrong bet and suffer the losses; (3) Relax, miss the boat and languish in the “what ifs”; (4) Relax, look at the disaster and wipe your brow with relief.

And now to crypto

Same with cryptocurrency, except with a twist. You see the potential, but you’re uncomfortable (to say the least) with the lack of regulation. Are you and your company going into crypto or not? I convened an informal half-hour, quick-fire roundtable with five executives from companies ranging in size from $2.8 billion to $7.0 billion—all acquaintances of mine—to get a feel.

After a sharp drop in the global value of cryptocurrency – from a peak of $3.2 trillion in November 2021 to a crash landing of $835 billion in December 2022, a drop of 74% – we’ve seen a rebound to $1.18 trillion dollars, but another drop to $1.04 trillion as of this post. Our panelists were clear on one thing: their leadership and fiduciary responsibilities—not to mention ethics—made their decision easy. This is no time to gamble on your or your company’s financial well-being or, for that matter, the lives of the employees and their families who depend on them.

Until the regulations make this a fair game, nothing to do, so they.