Chapter 5: The Risk Management Advantage
It's an uncanny thing—I've been sensitive to risk my entire life. Growing up, I can remember weighing the upside (or downside) of a decision when my peers were more likely to have made a more spontaneous choice. Even in school, I can remember my friends giving me a hard time for being an old man about things. To clarify, in this context an "old man" refers to weighing the pros and cons of a decision before making it. Usually in a social environment.
What I didn't realize during those formative years is that I was developing a decision tree-style of thinking that would help me evaluate different choices and see down various paths and their potential outcomes. And while my ratio of correct outcome predictions to incorrect outcomes is nothing to brag about, the skill has been quite useful not only in technology and consulting, but also in starting and operating a business.
Now, I'm not about to tell you how to go about assessing technology risks, or debate the merits of a bottom-up over a top-down risk assessment in your company. What I want to do is provide a lens that gives you a view of how I approached scenarios from a risk perspective and how I emerged from each situation.
Through my career in technology, consulting, and entrepreneurship, I've identified three core applications of risk-aware thinking that consistently deliver results.
Risk-Aware Product Development
Risk-Aware Client Relations
Risk-Aware Business Strategy
RISK MINDSET IN TECHNOLOGY
As a Product Manager in tech, my responsibilities spanned multiple areas. The one I gravitated toward most was (and is) designing for scale. For example, when designing our third-party integration framework, we faced a choice: implement a simple data model that accounted for a majority of content providers and their offerings but that would necessarily invite more enhancement requests, or build a more bespoke data model tailored to each content provider that reduced the number of enhancement requests but introduced more technical overhead. We opted for the former—a decision that proved crucial when we quickly signed several content providers in a single year.
Balancing the needs from a development and an end user perspective is an ongoing contest. Those two guiding principles can be difficult to reconcile. Traditionally, it's been very challenging to build a simple, intuitive, and capable product—one that stands the test of time. To make it simple for your users, it's likely quite complex for your engineering team. Conversely, developing a product with a greater sensitivity to your engineering team rather than your users is more likely to yield a product that doesn't resonate with your intended audience.
This illustrates the fundamental challenge: There's an inherent tradeoff between function and form. The result of your labors can't possibly please everyone, so you have to make educated, well-informed decisions knowing that focusing more on one cohort means focusing less on another.
Every day, I was balancing the complaints or suggestions of customers, services, or developers and weighing their potential costs and benefits against one another. A great example that may resonate with other product-oriented professionals is that of feature versus tech debt. New features attract new business and grab attention, which scales revenue growth. Addressing tech debt does not garner attention or new business but does keep your ecosystem healthy for continued technical growth.
RISK MINDSET IN CONSULTING
Full disclosure: I worked in risk advisory consulting; however, I'm not about to go down that subject-matter rabbit hole. I want to keep things more relatable, so instead, I'd like to focus on how I, personally, walked the many minefields that were client stakeholder groups. What I discovered was that technical risk assessment and interpersonal risk management are inseparable—a lesson I learned the hard way on my first major engagement.
Early in my career, I was staffed on a project with a big US bank. It was a third-party risk management program system design and implementation, and there was an army of resources between the client and our team. I was just an associate then, so I was merely a sponge—soaking in everything I could about navigating big business, working closely with colleagues, and maintaining professionalism as a consultant.
It was during this engagement that I learned that even seemingly innocuous statements could have outsized impacts. For example, validating testing results that came back as failures, which appeared not to fail in my own testing. So, as our team had up to that point, I wrote them up as procedural errors, given that the testers were relatively unfamiliar with the system. While I'll spare the specifics, my written conclusion was ill-received by one individual in particular. In hindsight, I should've known that this person's reaction would've been disproportionate to my assessment. I soon received a scathing phone call from the tester.
So, what did I learn from this, and what am I hoping your takeaway is, as well? I learned that discretion is the better part of valor. A quick sanity check with a senior team member prior to a written publication can do wonders, even if the end result is the same, although it likely wouldn't be for any number of reasons in this case:
They could've noticed something I didn't in my validation testing
They may have softened the language in the write-up
They could have confirmed everything about my assessment and prepared me for the inevitable fallout, but given me all the assurance I needed
The point is, when you're working with people, discretion matters, so ensure what you're about to say or write is really what you want to convey.
RISK MINDSET AS A BUSINESS OWNER
Nearly every decision you make as a business owner entails risk, because every choice has a cost—remember opportunity costs? And also, that quip, "time is money!" That's more relevant than ever. As I write this, I could be dedicating more time to curating a pipeline. Instead, I'm choosing to develop a rapport with an audience. Why? Whether driven by potential new revenue streams or simply the satisfaction of helping others avoid costly mistakes, this choice itself demonstrates risk-reward thinking in action.
As a business owner, I've learned that effective risk management follows three principles:
Information gathering: What data do I have, and what am I missing?
Impact assessment: What are the potential outcomes, and can I live with the worst case?
Adaptation planning: How quickly can I pivot if my assumptions prove wrong?
This framework has guided decisions from staffing choices to market expansion, turning uncertainty from a paralysis point into a competitive advantage. I hope it can do the same for you.
-Chris