With the unrelenting pace of technology change and a host of new challenges and opportunities knocking on 2017’s door, CIOs know that risk-taking is par for the course in IT. We asked eight technology and business leaders to share how they cope with risks and tips for taking smarter risks in IT. Here’s what they had to say.
1. Challenge the status quo
“Taking risks is an essential ingredient for innovation in business and IT operations; it’s the process of not being content with status quo and looking for ways to work more efficiently and solve problems. The irony is that one of the biggest risks individuals and organizations can take is not acting and instead being content with the way things are. It’s an easy trap to fall into; you and your team are overwhelmed, there’s concern that operations might be disrupted and besides, if customers and employees aren’t complaining, why fix what isn’t broken? Such complacency can be catastrophic, which is why we encourage our team to take a proactive approach to investigating flaws in our IT systems and also challenging standard practices to identify new and more efficient techniques. Opening up yourself and your business for criticism and question can be seen to some as the ultimate risk – but to us, it’s an endeavor that leads to stronger networks, educated employees and brand trust, the ultimate reward.”
Greg Hoffer, VP of engineering, Globalscape
2. Embrace emerging technologies
"In today’s real-time business environment, playing it safe is seldom an effective strategy – and that includes IT. But by taking a forward-thinking approach, driven by modern components such as AI, machine learning and advanced analytics, many successful CIOs are implementing faster service engagements, self-service support and more effective change management throughout their organizations. It’s the smart risks that often propel businesses forward. Today’s most successful CIOs recognize that the right tools can create a more engaged and efficient IT landscape while keeping risk under control. "
John Prestridge, VP of product strategy, SunView Software
3. Celebrate failure
“I've built my whole career on taking risks that others would not. As Thomas Edison said, ‘I have not failed. I've just found 10,000 ways that won't work.’ I live by this mantra and look at failure as a learning opportunity rather than the negative connotation that society places on it. The reason people don't take risks is that they are afraid of failure, I say embrace it and the wins are much more impactful than the safe wins. That said, it is important to take calculated risks and not the shotgun approach. I think the only way to do this is to make informed decisions based on facts rather than lead by emotions. Facts only exist if you have information, information only exists if you collect data and analyze it. So, identify the information that are the levers that affect your business, collect it, analyze it and use it to make informed decisions about which risks to take and which ones to let lie.”
Shahin Pirooz, CTO, DataEndure
4. Change the IT scorecard
“CEB research shows that 68 percent of IT employees have a risk-averse mindset, and that mindset creates barriers to speed and innovation in IT. To increase risk tolerance, IT leaders should first change the message communicated by IT’s metrics and scorecards from efficiency and reliability to innovation and speed. If metrics for efficiency, on-time delivery, reliability, and quality are always the first to be mentioned in leadership messages, the IT team will take this to mean that they should avoid actions that might compromise these metrics. Second, IT leaders should position failure as a learning opportunity rather than something that is unusual and rarely discussed. Progressive companies create programs to share examples of 'praiseworthy failure' – failures where someone made a reasonable decision with the information they had available to them but that didn’t work out – and extract the lessons from them.”
Andrew Horne, IT practice leader, CEB
5. Make it a team effort
“IT is one of the fastest-growing industries on the planet as well as one of the riskiest. With the huge range of apps and software, people use roughly 7-10 on a daily basis. Taking a risk is a great opportunity to stand out and to present yourself as a leader rather than a follower satisfied with the status quo. Success never comes without taking certain risks and every team member understands that, especially if they are willing to share a part of that success. Taking a risk is also a good way to stimulate your team members and yourself since people don’t like to lose. As to some of the benefits of risk taking, I would say I’ve seen a significant improvement in teamwork quality, productivity, and self-encouragement. I’m definitely a risk taker however at the same time, I also do my homework and understand the importance of implementation and follow through. I don’t benefit from risks without preparing to take them and try to learn from the outcomes, positive or negative.”
Yuri Khlystov, CEO, LaowaiCareer
6. Ask the right questions
“It is crucial that business leaders foster a corporate culture that rewards calculated risk-taking. This goes beyond only rewarding successes and punishing for failures, which will stifle initiative and risk taking. When it comes to taking risks, failing fast is as important as succeeding. Admitting failure requires confidence and this is where a supportive corporate culture is so critical. When taking risks, it is important to develop a programmatic approach, evaluating the objectives, establishing clear KPIs and exploring alternative approaches. Since companies do not have historic data for new initiatives, secondary data sources should be explored. Have our competitors embarked on similar initiatives? Have companies in other industries faced similar challenges? What reasonable assumptions can we apply to better scope the risk? Once the due diligence is done, the best option based on a ‘calculated risks’ approach should be assumed with confidence. The effects of the change should be subject to continuous, real-time monitoring against the KPIs. Now that your team has closed this circle, they can repeat the creative process as many times as necessary.”
Michael Segal, area vice president, strategic marketing, NETSCOUT
7. Communicate and collaborate
“We embrace a company culture that it’s better to ask for forgiveness than to ask for approval. We don’t have strict approval processes because we want to encourage everyone to think for themselves. It comes down to trusting everyone within the organization and making sure everyone is comfortable with trying new things and are comfortable accepting failure. The benefit of risk-taking is innovation. The best ideas don’t necessarily come from the top, they can come from anywhere in the organization. We have a culture where risk-taking is rewarded which leads to having more ideas coming to the surface. When people communicate and collaborate effectively is when creative ideas happen.”
Derek Roos, CEO and co-founder, Mendix
8. Prepare for the consequences
“Risk-taking often promotes initiative taking. We’ve seen individuals who are now more keen to help fix business problems without being asked to do so. We’ve had an employee work ‘on the side’ to help document and automate part of our new hire onboarding process. Of course, you need to reinforce the behavior through recognition of the effort as well as the result. An organization also needs to refrain from reprimanding employees excessively for risk-taking if the result is not a positive one. It may sound simple, but play it out – whether it be on paper and a formal business case or workshop different scenarios (including worst case) with all stakeholders. Business leaders can ask themselves: should everything go sideways, can we live with the result if it fails? If you agree as a group up front then everyone should be prepared for the consequences. Is everyone on board?”
Francis Li, VP of IT, Softchoice
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