Are you avoiding risk or managing risk?

Are you avoiding risk or managing risk?

avoid_risk_from_ITADI just read a great article over on the Mckinsey & Company blog titled “Building a bridge from CMO to CIO” where Matt Jauchius, EVP and CMO of Nationwide, describes his approach to working with the CIO of the company.    I encourage you to jump over there and read the article…there’s some great advice to help the CMO and CIO work together.

There was a line in that article that really caught my eye. The quote from the article is provided below:

As CIO, you want a CMO to be safe and avoid obvious risk. Marketing has a cultural need to be innovative.

Now, there’s something to be said for avoiding obvious risk. You don’t want to rush off into the world and take on every risk that comes along but you also don’t want to avoid any risk altogether. Part of being in any leadership role is to decide on what risks are worth taking and then determining how to manage those risks.

There’s a considerable different between avoiding risk and managing risk.  When  you avoid risk, you put yourself and your company at a disadvantage.  As a CIO (or CMO) you should never want to avoid risk at all…your goal should be to identify and manage the risks that are necessary to ensure your organization meets its goals.

Back to that quote from the McKinsey article regarding CIO’s wanting CMO’s to be “safe and avoid obvious risk”.  While I understand and can somewhat agree with the spirit behind the statement, I can’t agree with the statement itself.    If I were a CIO, I’d want the CMO (or any other colleague) to identify and manage risk, not avoid it. In fact, if risks are ‘obvious’ there’s generally a way to manage those risks. It’s usually the non-obvious risks that really cause the most trouble for an organization.

Rather than avoiding risks, the job of a leader should be managing risk and mitigating risk. Every activity undertaken by an organization has some risk involved with it. Software development has risk.  Outsourcing has risk. Using cloud services has risk.  The difference in whether any project is a success or failure lay partly in how risks are managed and mitigated.

I have to ask you…are you managing risk or avoiding risk?