Not taking risks is risky

So, I am catching up on my magazine reading and I see this BMW ad in Wired Magazine with the tagline above. The ad goes on “And while uncharted territory is unnerving to some, we know the greater risk lies in mediocrity”

I see BusinessWeek with Nathan Myhrvold (ex Microsoft) on cover with this tag line “is out to corner the idea for big ideas. Why that’s spooking the business world”

Then I see on the cover of InfoWorld magazine the title “How to reduce risk at every turn” It is an issue on compliance and risk mitigation, but in a sense reflects how conservative we have made our IT groups.

This when we are in one of the most dynamic times in technology, even by the dynamic nature of our industry. The Valley is bursting with Web 2.0. Scandinavia with Open Source. Korea with amazing mobile apps. India with all types of vertical BPO. China with amazing manufacturing efficiencies. This at a time when CEOs are screaming for innovation as our edge in response to changing global markets.

The old adage – “you do not get fired for buying from IBM” has morphed in to “you do not get fired for buying from IBM, Microsoft, SAP, EMC.” But do you need an expensive IT staff to recommend a safe choice? Any CEO can pick up the phone and call IBM or SAP themselves. No – you want your CIO to be prowling the Valley or Korea for innovation ideas.

We have encouraged CIOs to consolidate vendors. Many CIOs will privately tell me that the lock in costs of long-term relationships with large vendors far exceed the benefits of administrative and architectural convenience from such consolidation.

If I was a CEO, I would redefine diversity in my organization. Continue with gender and racial diversity. But also define it as 25% of my IT budget to be spent with vendors less than 3 years old. Those focused on innovation and results, not lock in. Yes, some of those vendors will not survive long term, but if done right will deliver significant payback justifying the risk.

And I would unburden my CIO from a compliance focus (which Gartner says, thanks to Sarbanes, is now eating 10-15% of most US IT budgets). I have my CFO, VP of HR and General Counsel focused there. I would tell my CIO to go focus on innovation. The best thing they can buy from IBM is not new products – but more its new advertising campaign “CIO = Chief Innovation Officer”. Now that is something you definitely will not be fired for “buying” from IBM.