15 Making Sense of Blockchain: How Firms Can Chart a Strategic Path Forward ^Top Quadrant I: Transition is Neither Safe nor Required Now Small and medium enterprises operate with a limited number of vendors and low transaction volumes. Operational scalability therefore does not pose much concern (low ITI) and their needs can be met with existing technologies that are safer and cheaper than blockchain (low IRI). Such firms don’t need to invest in blockchain until it is adopted widely. If they do decide to experiment at this early stage, they need to find ways to mitigate potential risks. Quadrant II: Transition is Needed but Could Be Risky Now Many large firms’ existing businesses can benefit from disintermediation, transparency, smart contracts, provenance verification, decentralization, etc. (Examples include financial services firms, mining firms, retailers, and gov- ernment departments.) But unless a firm is a technology provider, it will likely not be tech-ready for blockchain. Firms that could benefit but don’t have the capabilities to adopt blockchain can delay investing until the benefits outweigh the costs. Most firms operate with sensitive data and risk compromising their security and operations if their decisions are ill-informed.18 The healthcare industry, for instance, could benefit greatly if patients’ electronic medical records could be accessed by healthcare providers and insurance firms. However, applying an unproven technology to this kind of data could have serious repercussions. Such firms can avoid the blockchain path until it is proven. Firms dealing with less sensitive data, such as Spotify or De Beers, could explore blockchain by borrowing competencies through tech partnerships. They could also invest in internal tech competencies if they have disposable resources, as BNY Mellon, Citi, and Comcast have done. 18 Donald Sull, “Why good companies go bad,” Harvard Business Review, July-August, 2000, https://hbr. org/1999/07/why-good-companies-go-bad.