Risk Management in Strategy

It’s easy as a PM to only focus on the upside. But you'll notice: more experienced PMs actually spend more time on the downside. The reason is simple: the more time you’ve spent in Product Management, the more times you’ve been burned. The team releases “the” feature that was supposed to change everything for the product - and everything remains the same. When you reach this stage, product management becomes less about figuring out what new feature could deliver great value, and more about de-risking the choices you have made to deliver the needed impact. -- To do this systematically, I recommend considering Marty Cagan's classical 4 Risks. 𝟭. 𝗩𝗮𝗹𝘂𝗲 𝗥𝗶𝘀𝗸: 𝗧𝗵𝗲 𝗦𝗼𝘂𝗹 𝗼𝗳 𝘁𝗵𝗲 𝗣𝗿𝗼𝗱𝘂𝗰𝘁 Remember Juicero? They built a $400 Wi-Fi-enabled juicer, only to discover that their value proposition wasn’t compelling. Customers could just as easily squeeze the juice packs with their hands. A hard lesson in value risk. Value Risk asks whether customers care enough to open their wallets or devote their time. It’s the soul of your product. If you can’t be match how much they value their money or time, you’re toast. 𝟮. 𝗨𝘀𝗮𝗯𝗶𝗹𝗶𝘁𝘆 𝗥𝗶𝘀𝗸: 𝗧𝗵𝗲 𝗨𝘀𝗲𝗿’𝘀 𝗟𝗲𝗻𝘀 Usability Risk isn't about if customers find value; it's about whether they can even get to that value. Can they navigate your product without wanting to throw their device out the window? Google Glass failed not because of value but usability. People didn’t want to wear something perceived as geeky, or that invaded privacy. Google Glass was a usability nightmare that never got its day in the sun. 𝟯. 𝗙𝗲𝗮𝘀𝗶𝗯𝗶𝗹𝗶𝘁𝘆 𝗥𝗶𝘀𝗸: 𝗧𝗵𝗲 𝗔𝗿𝘁 𝗼𝗳 𝘁𝗵𝗲 𝗣𝗼𝘀𝘀𝗶𝗯𝗹𝗲 Feasibility Risk takes a different angle. It's not about the market or the user; it's about you. Can you and your team actually build what you’ve dreamed up? Theranos promised the moon but couldn't deliver. It claimed its technology could run extensive tests with a single drop of blood. The reality? It was scientifically impossible with their tech. They ignored feasibility risk and paid the price. 𝟰. 𝗩𝗶𝗮𝗯𝗶𝗹𝗶𝘁𝘆 𝗥𝗶𝘀𝗸: 𝗧𝗵𝗲 𝗠𝘂𝗹𝘁𝗶-𝗗𝗶𝗺𝗲𝗻𝘀𝗶𝗼𝗻𝗮𝗹 𝗖𝗵𝗲𝘀𝘀 𝗚𝗮𝗺𝗲 (Business) Viability Risk is the "grandmaster" of risks. It asks: Does this product make sense within the broader context of your business? Take Kodak for example. They actually invented the digital camera but failed to adapt their business model to this disruptive technology. They held back due to fear it would cannibalize their film business. -- This systematic approach is the best way I have found to help de-risk big launches. How do you like to de-risk?

Boards don’t need a threat feed. They need clarity. Here are 3 ways I’ve learned to make tech risk resonate at the executive level: 1. Lead with business impact. If it doesn’t tie to strategy, revenue, or reputation, it’s not getting airtime. 2. Keep it high signal. Boards aren’t allergic to detail—they’re allergic to noise. Prioritize the risks that actually matter. 3. Make it actionable. Clarity builds confidence. Security that isn’t understood can’t be governed. How are you helping your board make sense of digital risk? #CyberSecurity #BoardGovernance #ExecutiveLeadership

The Navy just gave away its crown jewels. Not by accident…by memo. The Department of the Navy recently published its updated Priority Technology Areas (PTAs) — the blueprint for where they’re putting their investment, their focus, and their bets for the future. The list includes: - AI / Autonomy - Quantum - Transport / Connectivity - C5ISR / Naval Space - Cyber Operations / Zero Trust In other words: the exact areas hostile nation-states are trying to steal from. These aren’t just buzzwords they’re bullseyes. And if you work in these sectors (or touch them through vendors, R&D, or joint ventures), you don’t just need to secure your network. You need to secure your people. Because threat actors don’t just hack networks. They charm interns. They blackmail contractors. They recruit your engineer on LinkedIn. Human risk isn’t hypothetical. It’s the quiet insider leaking schematics. It’s production delays caused by sabotage. It’s the employee who doesn’t even know they’re being used. If you touch any part of these tech priorities, your people are targets — not just employees. This is why Human Risk Management can’t be an afterthought. Especially when IP theft, insider recruitment, and sabotage-by-trust are the playbook. So ask yourself: ✔️ Have your people been trained to recognize social engineering, elicitation, or suspicious contact? ✔️ Does your leadership know what a human risk assessment actually looks for? ✔️ Do you have a protocol for early signs of insider targeting? Because the next leak won’t come from a firewall... It’ll come from a badge swipe. And the Navy’s memo just handed adversaries the map. #HumanRisk #InsiderThreat #NationalSecurity #DON #PriorityTechnologyAreas #Cybersecurity #IPTheft #InsiderSabotage #AI #Quantum #C5ISR #ZeroTrust

I’ve had to protect my team in the past, particularly when their time or focus was at risk. I’ve seen this happen at companies like Microsoft, Google, and Amazon, where mandates and initiatives would stack during the same timeframe. While each initiative alone might have been reasonable, together they overburdened the teams. Those compiled costs may be invisible to the folks driving the individual mandates. You may have seen teams get overwhelmed by a major release, a review cycle, and bi-annual business planning all at once. This type of time management stress is usually manageable, but there are times when teams can be stretched too thin and compromise morale and quality. When you witness this, I believe it’s crucial to step in. You will hear from your team and you need to be close enough to the issues to decide how to respond. This can be tricky for a leader: on one hand, you want to ensure your team can succeed; on the other, you’re part of the broader leadership and need to support the decisions being made. Sometimes, you have very little room to maneuver. In those cases, I find it most effective to have a private conversation with key decision-makers. Meeting behind closed doors allows you to present the reality of your team’s capacity without putting anyone on the spot. Armed with clear data or project plans, you can often negotiate more realistic timelines or priorities. Another common pressure is when stakeholders create frequent direction changes. Repeated shifts in goals or features will thrash your team and waste energy. This often reflects deeper issues with strategy, alignment, and communication. However, you may not have time for a complete overhaul of your planning processes, and you still need a way to prevent thrash. A short-term fix is to set firm near-term milestones or “freeze” dates, after which any changes must go through a formal triage process. This ensures that if changes are necessary, they follow a transparent, deliberate sequence rather than blindsiding. After the freeze, broader project changes can be considered. Ultimately, I see my responsibility as a leader as fostering an environment where my team can perform at a high level, stay motivated, and avoid burnout. Part of a leader's role is to protect their team’s capability and long-term health. There will always be sprints and times when you need to push, but you also need to consider the long view and put on the brakes when required. People who feel supported are more productive, more creative, and likely to stay engaged.

How to de-risk your startup idea using "riskiest assumption tests" (and why it’s the most important thing you’re not doing yet) Bringing something new into the world—whether a startup, a product, or a bold idea inside a company—is inherently risky. But not all risks are created equal. The difference between an idea that succeeds and one that fails often comes down to whether the team identified and tested the riskiest assumptions early. Here’s a simple, powerful method to reduce risk systematically. 🔍 Step 1: Identify Your Assumptions Every new idea is built on a stack of assumptions. To uncover them, use “We believe…” statements. For example, for an AI-powered career coaching app for recent grads: 1. We believe recent grads want personalized job search support. 2. We believe they trust AI to provide that support. 3. We believe we can reach them through campus career centers. 4. We believe they’ll pay $10/month for the premium version. Write each assumption on a separate sticky note. Include assumptions across product, customer, go-to-market, pricing, operations, team, and stakeholders. The most critical areas early on are: *Do customers want this? *Can I reach them? *Will they pay? *Can I build it? 📈 Step 2: Plot Assumptions on a 2x2 Matrix (see below) Create a grid: X-axis: Risk to the business if this is wrong. Y-axis: Level of uncertainty—level of evidence you have. Plot each sticky note on the matrix. ⚠️ This isn't about exact numbers--it's judgment-based. You’re identifying what's both high risk and high uncertainty. 🔥 Step 3: Identify the Top 5 Riskiest Assumptions From the upper-right quadrant, choose the top 5. Then assess the cost (money + time) of testing each. If something’s too expensive to test (e.g., requires a clinical trial), start with a cheaper one. Example: We believe recent grads trust AI career tools. 🧪 Step 4: Design a Real Test Test it with a landing page and short demo. Run $100 in social ads targeting recent grads with this headline: | “Let AI help you land your dream job—meet your AI career coach.” Track clicks, sign-ups, and responses to: | "Would you use this? Why or why not?” This gives you real evidence—fast. No guessing. ♾️Always be testing Continue to systematically move through testing your riskiest assumptions. 🎯 Why This Matters Testing your riskiest assumptions early: ✅ Shorten the feedback loop ✅ Reduce waste ✅ Focus limited resources on what matters ✅ Give yourself the best shot at success Innovation isn’t about being certain. It’s about being disciplined in your curiosity. 🗓️ Want to practice this? Join me at 4PM today at Raleigh-Durham Startup Week for a hands-on workshop and walk through this method you startup. If you’ve done riskiest assumption testing before, I’d love to hear what your biggest learning was. Drop it in the comments 👇 #LIPostingDayApril #startups #innovation

Here's the thing about being proactive with risk management: It sounds doable until you actually get to it. That’s not because teams ignore risk. Hell, everyone manages different parts of risk in silos. ➡️ HR owns access risk ➡️ Engineering owns infra risk ➡️ Product owns vendor risk But no one owns the whole story. From building Sprinto, I’ve learned that risk is shaped by what changes between periodic reviews, not what shows up in them. Think about it. Right now, while you're reading this: → That developer who quit last week? Still has GitHub access → Your "trusted" vendor? Their SOC 2 expired a few days ago → That new AI tool? It's chewing through customer data with zero governance Do you see the problem here? This is why I get frustrated with traditional risk management. You can't just log something in a register, review it once a quarter, and pray nothing changed. At Sprinto, we work with companies that've figured this out. The mature ones do three things differently: 📌They track risk movement continuously 📌They align controls with actual business risks 📌They surface risk exposure in real time, and not in review cycles The future of risk isn’t too complicated. It's having a system that actually keeps pace with how fast your business changes.

In my experience, when I ask leaders to identify risks within their operations, the response ranges from discomfort to defensiveness. There is a view that acknowledging risks is an admission of weakness or failure in managing a business. In reality, this perspective can limit the organization’s growth and adaptability. When leaders equate risk identification with ineffective management, they miss the reality that risks are inherent in every business. No organization operates in a risk-free environment. The courage to recognize and talk about risks demonstrates not only self-awareness but also a proactive approach to navigating uncertainty. It is a myth that naming risks is a sign of bad management. Instead, actively managing your risks supports a culture where risk empowers 1) growth/revenue, 2) cost containment, and 3) brand/reputation. A proactive leader views risk not solely as a threat to be mitigated. They see risk as a path to innovation and transformation. A transparent risk discussion: 1️⃣Uncovers growth options 2️⃣Anticipates shifts in the market to proactively respond to disruptive uncertainty 3️⃣Sustains a culture of transparency and resilience to develop creative solutions When risk is viewed as an opportunity, it becomes a catalyst for progress rather than a barrier to success. Leaders who encourage open risk discussions build organizations that are agile, adaptable, and prepared for disruption. By shifting the narrative from risk avoidance to strategic risk-taking, leaders can turn challenges into competitive advantages. What is your perspective? #RiskManagement #Strategy #Leaders Inside Edge Risk Advisors LLC

If you think data visualization and statistics don’t apply to FP&A -- consider just how much valuable information is hidden away in those financial processes. For instance, understanding not only the average days payable but also the variance around those payables can shed light on potential risks or opportunities. The same approach can be applied to other metrics, such as sales forecasts or overhead expenses: analyzing forecast accuracy, identifying anomalies, or even spotting correlations between different expense lines can significantly enhance strategic decision-making. Of course, transforming raw spreadsheets and disparate systems into a structured, analysis-ready format requires effort, but it pays off once those cleansed datasets are in place. With the right data visualization and statistical techniques, these metrics become more than just numbers on a page -- they become actionable insights that drive better decisions. FP&A actually benefits substantially from this kind of analysis, and those who overlook its potential may be missing out on valuable guidance. Embracing data analytics and visualization can help surface insights that might otherwise remain buried and give organizations a more comprehensive view of their financial health and future direction.

"𝘞𝘦 𝘤𝘢𝘯'𝘵 𝘢𝘱𝘱𝘳𝘰𝘷𝘦 𝘵𝘩𝘪𝘴 𝘤𝘺𝘣𝘦𝘳𝘴𝘦𝘤𝘶𝘳𝘪𝘵𝘺 𝘣𝘶𝘥𝘨𝘦𝘵 𝘸𝘪𝘵𝘩𝘰𝘶𝘵 𝘶𝘯𝘥𝘦𝘳𝘴𝘵𝘢𝘯𝘥𝘪𝘯𝘨 𝘵𝘩𝘦 𝘙𝘖𝘐." The CFO's request was reasonable but revealed a fundamental disconnect in how organizations evaluate security investments: conventional financial metrics don't apply to risk mitigation. 𝗧𝗵𝗲 𝗖𝗵𝗮𝗹𝗹𝗲𝗻𝗴𝗲: 𝗠𝗮𝗸𝗶𝗻𝗴 𝗦𝗲𝗰𝘂𝗿𝗶𝘁𝘆 𝗧𝗮𝗻𝗴𝗶𝗯𝗹𝗲 Traditional security justifications relied on fear-based narratives and compliance checkboxes. Neither approach satisfied our financially rigorous executive team. Our breakthrough came through implementing a risk quantification framework that translated complex security concepts into financial terms executives could evaluate alongside other business investments. 𝗧𝗵𝗲 𝗠𝗲𝘁𝗵𝗼𝗱𝗼𝗹𝗼𝗴𝘆: 𝗤𝘂𝗮𝗻𝘁𝗶𝗳𝘆𝗶𝗻𝗴 𝗥𝗶𝘀𝗸 𝗘𝘅𝗽𝗼𝘀𝘂𝗿𝗲  𝟭. 𝗕𝗮𝘀𝗲𝗹𝗶𝗻𝗲 𝗥𝗶𝘀𝗸 𝗖𝗮𝗹𝗰𝘂𝗹𝗮𝘁𝗶𝗼𝗻: We established our annual loss exposure by mapping threats to business capabilities and quantifying potential impacts through a structured valuation model.  𝟮. 𝗖𝗼𝗻𝘁𝗿𝗼𝗹 𝗘𝗳𝗳𝗲𝗰𝘁𝗶𝘃𝗲𝗻𝗲𝘀𝘀 𝗦𝗰𝗼𝗿𝗶𝗻𝗴: We created an objective framework to measure how effectively each security control reduced specific risks, producing an "effectiveness quotient" for our entire security portfolio.  𝟯. 𝗘𝗳𝗳𝗶𝗰𝗶𝗲𝗻𝗰𝘆 𝗙𝗮𝗰𝘁𝗼𝗿 𝗔𝗻𝗮𝗹𝘆𝘀𝗶𝘀: We analyzed the relationship between control spending and risk reduction, identifying high-efficiency vs. low-efficiency security investments. 𝗧𝗵𝗲 𝗥𝗲𝘀𝘂𝗹𝘁𝘀: 𝗧𝗮𝗿𝗴𝗲𝘁𝗲𝗱 𝗥𝗶𝘀𝗸 𝗠𝗮𝗻𝗮𝗴𝗲𝗺𝗲𝗻𝘁  • Our IAM investments delivered the highest risk reduction per dollar spent (3.4x more efficient than endpoint security)  • 22% of our security budget was allocated to controls addressing negligible business risks  • Several critical risks remained under-protected despite significant overall spending 𝗞𝗲𝘆 𝗟𝗲𝘀𝘀𝗼𝗻𝘀 𝗶𝗻 𝗥𝗶𝘀𝗸 𝗤𝘂𝗮𝗻𝘁𝗶𝗳𝗶𝗰𝗮𝘁𝗶𝗼𝗻  𝟭. 𝗦𝗵𝗶𝗳𝘁 𝗳𝗿𝗼𝗺 𝗯𝗶𝗻𝗮𝗿𝘆 𝘁𝗼 𝗽𝗿𝗼𝗯𝗮𝗯𝗶𝗹𝗶𝘀𝘁𝗶𝗰 𝘁𝗵𝗶𝗻𝗸𝗶𝗻𝗴: Security isn't about being "secure" or "vulnerable"—it's about managing probability and impact systematically.  𝟮. 𝗖𝗼𝗻𝗻𝗲𝗰𝘁 𝗰𝗼𝗻𝘁𝗿𝗼𝗹𝘀 𝘁𝗼 𝗯𝘂𝘀𝗶𝗻𝗲𝘀𝘀 𝗼𝘂𝘁𝗰𝗼𝗺𝗲𝘀: Each security control must clearly link to specific business risks and have quantifiable impacts.  𝟯. 𝗖𝗵𝗮𝗹𝗹𝗲𝗻𝗴𝗲 𝗰𝗵𝗲𝗿𝗶𝘀𝗵𝗲𝗱 𝗮𝘀𝘀𝘂𝗺𝗽𝘁𝗶𝗼𝗻𝘀: Our analysis revealed that several long-standing "essential" security investments delivered minimal risk reduction. By reallocating resources based on these findings, we:  • Reduced overall cybersecurity spending by $9M annually  • Improved our quantified risk protection by 22%  • Provided clear financial justification for every security investment 𝐷𝑖𝑠𝑐𝑙𝑎𝑖𝑚𝑒𝑟: 𝑉𝑖𝑒𝑤𝑠 𝑒𝑥𝑝𝑟𝑒𝑠𝑠𝑒𝑑 𝑎𝑟𝑒 𝑝𝑒𝑟𝑠𝑜𝑛𝑎𝑙 𝑎𝑛𝑑 𝑑𝑜𝑛'𝑡 𝑟𝑒𝑝𝑟𝑒𝑠𝑒𝑛𝑡 𝑚𝑦 𝑒𝑚𝑝𝑙𝑜𝑦𝑒𝑟𝑠. 𝑇ℎ𝑒 𝑚𝑒𝑛𝑡𝑖𝑜𝑛𝑒𝑑 𝑏𝑟𝑎𝑛𝑑𝑠 𝑏𝑒𝑙𝑜𝑛𝑔 𝑡𝑜 𝑡ℎ𝑒𝑖𝑟 𝑟𝑒𝑠𝑝𝑒𝑐𝑡𝑖𝑣𝑒 𝑜𝑤𝑛𝑒𝑟𝑠.

Is Risk Appetite Really a Thing? Yes — but it’s often misunderstood or poorly applied. At its best, risk appetite is the bridge between strategy and risk management. It helps boards and executives decide how much uncertainty they are willing to take on in pursuit of objectives. When articulated well, it prevents over- or under-reaction to risks. For example: deciding whether to expand into a volatile market, invest in a new technology, or tolerate a temporary compliance exposure. Too often, risk appetite statements are vague (“we have low appetite for reputational risk”), boilerplate, or disconnected from actual decisions. In those cases, they add no value and become governance wallpaper. If risk appetite isn’t tied to decision-making, capital allocation, or conduct expectations, it really is just blah blah blah. When It’s Helpful - some thoughts…. In financial services, regulators require clear risk appetite frameworks, which drive a bank's ability to lend, trade, or invest. A risk appetite statement in healthcare might clearly state, “Zero tolerance for patient safety failures,” which anchors operational priorities. In corporate governance, it can help boards debate how aggressive or conservative they should be when pursuing growth vs. protecting reputation. Bottom line Risk appetite is only helpful if it’s specific, actionable, and linked to decisions. Otherwise, it’s empty jargon!