In Defense of Risk
Risk has a branding problem.
We often hear the phrase “risk management” and immediately think of reduction, avoidance, or control. In the real world however, especially when leading in areas such as cybersecurity, operations, and innovation, risk is not something to necessarily avoid. It is a necessary component to manage when delivering strategic value.
As I’ve coached teams before, risk isn’t the enemy—inertia is. When leaders communicate with candor, explain their thinking, and demonstrate sound judgment, even a failed initiative can yield long-term strategic benefit.
Type-casting Risk
Before taking action, categorize the risk clearly. Is it:
· Investment Risk (think resource allocation)
· Operational Risk (think business continuity/compliance)
· Reputational Risk (think stakeholder trust or external perception)
· Technical Risk (think immaturity of a tool or approach)
· Regulatory Risk (think shifting legal landscape)
Understanding the type of risk can help frame the mitigation strategy. It can also help stakeholders contextualize the risk you’re presenting. Too often, we treat all risk as the same which leads to either unjustified caution or blind ambition, neither of which serves sustainable growth.
Training Judgment
Success in risk-forward leadership isn’t about always winning—it’s about showing your work. It’s critical to articulate your assumptions, gather cross-functional input, communicate risk and reward tradeoffs, and know when to pivot if data proves you wrong.
Recently, I greenlit a test deployment of a generative AI toolset across several departments. We sourced input from functional leaders, assembled a pilot group, and moved quickly to evaluate ROI and performance.
However, our subsequent training flagged significant friction points the initial test group missed. Why? Because it included more senior team members whose time we hadn’t secured in the first wave. Their insight was sharper, their broad understanding more refined. They’d seen more cycles and more failures. The test group was faster, but the training group was more effective. And while velocity matters in AI deployment, judgment matters more.
Fail Fast, Fail Cheap—Then Communicate Well
The decision to pause utility rollout frustrated some stakeholders, particularly learning and development teams, who saw a portion of their training budget go toward a tool we ultimately won’t deploy.
But 60% of the training content was transferable across similar tools, and we preserved optionality for future AI adoption. The experiment wasn't waste but a hedge. A fast, affordable one.
This is what good risk management looks like. Learn early, minimize sunk cost, preserve trust by communicating early and often.
Final Thoughts on Risk
I tend to have a higher risk tolerance than most. I’ve learned that this isn’t a flaw so long as humility, communication, and strong governance are preserved.
Failing isn't failure when it teaches fast, informs better bets, and strengthens cross-functional trust. It’s part of the process. But if you hide the rationale, skip stakeholder engagement, or bury the missteps—that’s when risk becomes a liability.