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Risk Taking: Time for a Comeback

Nowhere is risk taking more evident--and critical--than in the high-stakes world of high tech. Those technology vendors that played it safe over the years (think Digital Equipment) are part of the industry folklore. Those that mustered the courage to reinvent themselves (think IBM) have not only the luxury of survival, but also the awesome responsibility and financial rewards of industry leadership. Among IT users, Wal-Mart has boldly bet its business on supply-chain, inventory and point-of-sale technologies, so successfully that it's now the biggest company in the world. In a PC/server market infamous for its paper-thin margins, Dell can regularly slash prices and still count on healthy profits thanks to an IT-driven business model that eschews conventional manufacturing and distribution.

Four-Letter Word

Over the past several years, however, risk became a four-letter word among the IT set. Funding for start-ups dried up. In many cases, only the most stable vendors made customer shortlists. Only those projects with the clearest financial returns were approved. Risk taking was replaced by risk assessment, risk analysis, risk communication, risk management and, ultimately, risk avoidance. Actuaries and auditors seized the reins of corporate power from the visionaries.

Of course, this shift in temperament wasn't completely without merit. During the wonder years, tech vendors overpromised and overextended. Executives ran their companies to impress impressionable investors (or to enlarge their personal fortunes) rather than to generate profits. Business plans and projects were funded with little regard for their potential. No wonder so many companies failed or recoiled. Risk is one thing; foolishness and greed are another.

Nonetheless, the high-tech community has hunkered down for too long. We harrumph when the Harvard Business Review theorizes that IT has become a commodity, but if we're building, buying and doing pretty much what every other IT shop is building, buying and doing--managing our information technology risk down to zero--then hasn't our IT become a commodity?