7 IT executives share their strategies for smart risk-taking

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New rules for the CIO

The Enterprisers Project asked top IT executives to share some ways they encourage risk-taking within IT. Here's what they said:


Stuart Kippelman, corporate vice president and chief information officer, Covanta

"Back when I was at Johnson & Johnson, I led a lot of the IT innovation work. That’s where I learned that there is a fine line between people who are risk-takers and people who take unnecessary risks. You definitely don’t want people who take risks for the sake of taking risks; you want people who are risk takers for the sake of innovation.

The truth is, nobody likes things to fail. Success and innovation are not about failing. They are not about taking silly risks. They are about taking the right risks so that, if successful, they will really drive the company forward. And risks cannot be 'skunkworks.' Risks have to be done in a transparent way. You need to hear from your staff, 'Here’s what we’re working on, here’s why we’re going to do it in a riskier way, and here’s the benefit if we succeed.' It’s about getting buy-in and support for the idea, and then it’s full steam ahead — not just trying something silly."

So how can you tell the difference between a risk-taker and someone who takes risks?

It depends on the role. There’s no such thing as pure failure for me. There’s smart failure, which is what happens to people who try things in multiple different ways in an effort to seek new and better approaches to the tried and true. The whole reason for risk is to innovate faster, and you do need failure to do it, but you need to fail in a way that leads to new understanding."


David A. Bray, chief information officer, Federal Communications Commission

"Encouraging informed risk-taking is really just the idea of whether your employees feel like they've got your backing. After they present their idea, and they provide sufficient, satisfactory reasons why their idea is one worth pursuing, then your employees should, with your support, be able to move forward with confidence, knowing you will have their back and will take a hit if anything goes wrong. Note that I’m not saying go forth and do things willy-nilly. We definitely have to be good stewards of resources and outcomes, and we also have to balance maintaining the status quo with doing experiments to adapt to our changing world. What I am saying is our exponential era of change does not come with an existing textbook that shows us the way to go: we’re going to have to experiment.

With these experiments, if things go right, the team are the ones who deserve the spotlight. If things don’t go right, a good leader should take responsibility and protect the team. I think the best senior executive – CIOs, CTOs, or CEOs – are those who take responsibility when things go wrong, while at the same time give the credit, kudos, and praise to the team when things go right. That’s how you encourage courageous team members and cultivate ‘positive change agents’ across an organization.

Leadership differs from management in that it involves stepping outside of expectations and managing the friction that occurs when you do that. Given our rapidly changing world, we need good leaders to inspire courage and creativity across institutions. This way you can attract a diversity of talent that might otherwise pick a job solely on pay, and instead are excited to pick a job because they can try new ventures, take informed risks, operate with some autonomy on meaningful efforts, and help organizations adapt in a period of exponential technological changes."


Charlene Begley, Red Hat Board of Directors and former GE CIO

"It’s no wonder some CIOs are risk-averse. It was only five or ten years ago that IT was all about staying under the radar, making sure systems were always available and reliable at the lowest possible cost. After operating under those goals for so long, I can see why some IT folks were afraid to go out there and do something that might cause a reliability or availability issue.

Unfortunately, I think that was a huge disservice to IT teams around the world, because in today’s day and age, you simply can not work in IT and be risk-averse. Emerging technologies and ever-evolving tools are key to making many organizations more competitive. And a big part of becoming more strategic and taking advantage of those technologies is being willing to take risks.

As CIOs look for ways to take a seat at the strategic table, they must change the culture in IT from keeping the lights on and making sure nobody notices anything going wrong to actually stepping up to help make the company more competitive. Once we made that change at GE, that’s when we really had a seat at the table.

You can’t just take risks without direction or planning. You must articulate what you’re trying to achieve and how you plan to do it. For us, it was about setting bold, aggressive goals and really holding ourselves accountable for achieving them. We took a risk by setting ambitious goals, such as reducing the number of general ledgers by 90 percent in three years. That was an enormous risk. If we achieved even half of that we would have celebrated like crazy. When it comes to risk-taking in IT, rather than tell everyone it’s OK to fail, I think it’s better to tell people we’re going to set some really aggressive goals, and even if we only get halfway there, I promise you we will make more progress than if we did what was safe.

When pursuing anything that’s risky, you must always have your team’s back. When something bad happens — and stuff happens, whether it’s a cyber attack or your data center goes down during a really crucial time — whatever the case may be, it is so critically important that that CIO takes all the blame and protects their team.

When you’re trying to get your team to drive to really aggressive goals, and you’re trying to change the way they work, you must be ready to stand up for them. I really had to have some backs a few times. But if your team knows you’re there for them, you can count on them to take more risks for you. And when they do, they will achieve a hell of a lot more."


Ron Webb, executive director of Open Standards Benchmarking, Stats Hub, and Information System, The American Productivity & Quality Center

"Don't be afraid of failure, and evaluate EVERY failure to see if it was avoidable or unavoidable. Too many IT groups (and staff) are afraid to admit a failure. I work to celebrate the avoidable failures my team identifies, if (and only if) they take the steps to make sure that the failure won't happen again. Fail once moving forward toward delivering what your customer needs by when they need it is seldom a bad thing. Failing twice at the same thing isn't what we want. Failing three times at the same thing is a trend that should be addressed."


John Marcante, CIO and managing director of Vanguard's Information Technology Division, Vanguard

"Some ways CIOs can develop a more entrpreneurial culture are to let employees take risks without fear of failing. It's not about preventing failure, but understanding how to learn from failure. Find ways to let them do more and experiment more. Set up sandbox environments where they can play with new tools. Developers are creative by nature but engineers by discipline; they will find ways to automate and streamline processes and develop tools to enhance productivity. Signal that you understand the value of their ideas. As an example, at Vanguard, we sponsor a yearly 'ideation' challenge in which employees pitch thier ideas first to peers, then to the IT senior team. The winning ideas are sponsored and supported, and it's a thrill each year to see how engaged the participants are and the variety of ideas."


Uri Sarid, chief technology officer, MuleSoft

"You need to carve off projects that are a little out of IT's comfort zone, and require them to give up a bit of control. For instance, build an API that allows people to access data themselves, rather than getting it for them. Allow employees to access the cloud rather than creating a governance layer that stops them. Put your IT team on the right side of history. Rather than fight unstoppable trends, encourage your team to enable them. The positive feedback they get from the rest of the company will make them more confident about taking on similar projects in the future."


Ty Rollin, chief technology officer, Mobiquity

"First focus on business objectives, not on technology. Don't select the tool and retrofit the problem to it. And second, break down your world into APIs. If you can map a vendor to an API, then it is an option. That way, enterprises can avoid vendor lock-in and the associated headaches, as any vendor compatible to the API can be used."

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