Honeywell BrandVoice: How To Build A Trusted Brand In An Untrusted World: Blockchain

Blockchain technology helped Honeywell’s GoDirect Trade digitize a stubbornly analog marketplace. By bolstering consumer confidence, it can help your business shatter barriers of its own.

The pandemic has changed everything, including where we do our work, how our children learn, the size of our family gatherings and even what we do on Saturday nights.

It’s not just commutes, classrooms and calendars that look different, however. It’s also consumerism.

So suggests global communications firm Edelman, whose annual Edelman Trust Barometer Special Report found that in 2020, brand trust was the second most important purchasing factor for consumers when they were looking to buy a new brand, second only to price. According to Edelman — which says 44% of consumers have recently started using a new brand based on its response to the pandemic — the coronavirus has fundamentally changed consumers’ priorities. Before, only savings mattered. Now, so does social responsibility. In fact, 71 percent of consumers told Edelman that if they perceive a brand as putting profits ahead of people, they will lose trust in that brand forever.

But COVID-19 didn’t create consumers’ appetite for trustworthy brands. Rather, it accelerated it. Even before the pandemic, conditions were ripe for a mass reappraisal of consumer values. Data mining by mobile apps and social networks, the advent of “fake news” and a growing spate of cybersecurity breaches converged in a way that made trust and transparency more elusive than ever. And therefore, more desirable.

The appetite for trust and transparency is especially evident in certain sectors — like aviation. In particular, aviation parts, the market for which remains obstinately analog despite the pervasiveness of digital technology.

Whether you’re looking for a turbine engine for a commercial airliner, an actuator for a business jet or a new wheel for a puddle jumper, you are probably accustomed to buying it offline instead of online. The reason is twofold. First, cost. Aviation parts are expensive. Second, quality. Parts are purchased for installation on working aircraft, aviation parts must be safe and reliable. With prices and stakes so high, buyers prefer to transact not with anonymous internet sellers, but rather with known associates with whom they’ve exchanged handshakes, emails and cellphone numbers.

Simply put, buyers of aviation parts want relationships. Increasingly, however, they also want convenience. In 2018, Honeywell therefore launched its own software startup, GoDirect Trade, an e-trading platform for new, used and reconditioned aircraft parts and materials. Our goal is making it as fast, easy, efficient and affordable to buy and sell aviation parts online as it is to buy and sell countless other commodities, from clothes and groceries to furniture and electronics.

First, though, GoDirect Trade had to solve the trust problem: How could we use the internet to streamline transactions while instilling the same confidence in online transactions that buyers and sellers enjoy from offline relationships?

The answer surprised us — blockchain.

What is Blockchain?

Although it originally was designed for use with cryptocurrencies like Bitcoin, it turns out that blockchain can be as useful for tracing goods as it is for exchanging money. To understand why, it helps to comprehend a few blockchain fundamentals.

First, you should know that blockchains are decentralized, distributed and democratized. When software is built on top of a blockchain, it instantly captures, communicates and stores information simultaneously across myriad disparate computers. That means that there is neither a single machine nor a single user that controls data. Instead, an entire network owns and oversees it to ensure its integrity.

Second, you should know that blockchains are immutable. By design, blockchains are structured to record data in chunks, or “blocks.” Each new block that is added to the blockchain references the block that precedes it, forming a chain that stretches back to the inception of the database. Because each link in the chain is tied to the next, it’s impossible to make changes without alerting the entire network, all members of which must agree to changes before they can be made. The effect is that data stored on blockchains is permanent and enduring.

Finally, you should know that blockchains are secure. That’s because the information on blockchains is encrypted, and because users must verify their identity in order to participate. Once they’re verified, identities are continuously authenticated using a pair of unique alphanumeric codes, one of which is public and one of which is private. Together, these codes act as a tamper-proof signature on everything a given user does on the blockchain, ensuring accountability, legitimacy and transparency.

The marriage of decentralization with immutability and encryption makes fraud and falsification improbable. Perhaps even impossible. That makes blockchain technology an ideal medium through which to manufacture trust between untrusted parties. It gives buyers and sellers alike the means to ensure quality and credibility, whether they’re trading currency, food, pharmaceuticals or virtually anything else — including airplane parts.

Adding Value to Aviation Assets

The average order on GoDirect Trade is $10,000. Even a $1 million engine, however, can be purchased with the click of a mouse as if it were a pair of new running shoes. Blockchain is the reason why.

We use blockchain to create and share pedigrees for the serialized aviation parts that are traded on our site. Every time someone in our ecosystem touches a part — a manufacturer, buyer, seller, broker or even maintenance technician — they record their activity on the blockchain. Over time, as more information is captured and more trusted partners are added to the ecosystem, the result will be a thorough and transparent chain of custody that allows prospective buyers to see every time the part was previously bought, sold, inspected or repaired. And because aviation parts change ownership an average of four times apiece, that’s invaluable information to have.

Destination: Trust

Like GoDirect Trade, businesses of all sizes and in all sectors can use blockchain technology to build trust and generate value. To be successful, keep in mind these lessons that we have learned firsthand at GoDirect Trade:

• Rethink data ownership: In the modern era of big data, businesses have come to see data as a commodity. Intelligence about their products, services, operations and customers — all of it can be monetized in order to create a new income stream that’s based on information instead of innovation. Consumers’ new appetite for trust and transparency, however, is creating an environment in which data ownership is no longer sustainable. In order to build a trustworthy brand that can leverage the decentralization for which blockchain is known, companies that treat data as proprietary must therefore undergo a cultural change from being closed to being open, and from being driven by private gain to being driven by public good. Without that, blockchain initiatives will fail before they’ve even begun.
• Embrace crowdsourcing: When it comes to blockchain, crowdsourcing will likely require some trial and error. You can discover areas of opportunity, however, by looking for problems with multi-stakeholder solutions. One industry that has embraced blockchain, for example, is the seafood industry, which is using blockchain technology to track seafood from fisherman to market in order to prove to the consumer that the product was sustainably sourced. This is an ideal use case for blockchain because it requires cooperation and collaboration across entities — including competitors. Fishermen, distributors, wholesalers, restaurants and supermarkets all must agree to use the same platform, and to share their data on it.
• Learn before you leap: Although there’s something to be said for having first-mover advantage, you don’t need to reinvent the wheel. There are scads of organizations across a multitude of industries that already are taking advantage of blockchain technology and are enthusiastic about sharing their knowledge with others. You can learn from them — and you should. A good resource is Hyperledger, which describes itself as “an open source community focused on developing a suite of stable frameworks, tools and libraries for enterprise-grade blockchain deployments.” Hosted by The Linux Foundation, it offers case studies, white papers, webinars and online forums where blockchain newbies and veterans can comingle to share inspiration, ideas and intelligence.

Whatever your business, there’s only one destination for companies that wish to thrive in the post-pandemic world: trust. Blockchain can help you get there.