Risks Deferred Are Risks Accepted

The client did something I’ve seen many times before. The staff considered addressing obvious compliance and security issues, and then decided to postpone that work. While they said they were simply going to push the work back a few months, as typically happens, the postponement became indefinite.

Or perhaps more accurately, the postponement will be indefinite until a costly problem exposes these ignored risks as real, costly and immediate.

Like most clients, they claimed a number of reasons to postpone this work: cash flow, timing, budget restrictions, pending new projects, disruption to other projects, and the time required by management and staff.

Sounding sincere about their need to address these compliance and security issues, clients say, “This is going to be a lot of work, and we need to take care of other matters first so we can better focus on this with less distraction.”

Yet despite claiming to believe compliance and security work is important, clients usually minimize their concerns about risk. After all, they say, as they’ve grown their business, the risks have never materialized, and they really need to put their cash into the growth of the business.

As a business owner, I realize there are times you must make risky decisions. I know there are times where you do have to postpone important work because of something as simple as cash flow or lack of manpower. However, these risky decisions should be made with a sincere evaluation and acceptance of the risks, not by turning a convenient blind-eye and manufacturing emotional justification.

Too many leaders become overwhelmed by the size of the risks they have created -- or allowed to be created -- over time. When these issues become obvious, for whatever the reason, the most common response unfortunately is not to attack these risks full-blast or even to start whittling them down. No, the most common response is to push all these risks into the back of a dark closet where they can be ignored, where they can be put out of sight and out of mind.

Business leaders who decide to defer addressing real security and compliance risks must understand they are essentially self-insuring this risk. They have accepted the risks, even if that acceptance is by default or denial.

If a problem develops from these ignored compliance and security risks, it will be the business that pays the cost, whether it be cash, distraction, reputation, and, perhaps even, sanctions. Perhaps some risks are worth taking, but in most cases I see few leaders acknowledge the true risks and actual consequences. Apparently ignorance is bliss even when the ignorance is by choice.

Glenn S. Phillips, the president of Forte' Incorporated, works with business leaders who want to leverage technology and understand the often hidden risks within. He is the author of the book Nerd-to-English and you can find him on twitter at @NerdToEnglish.