Understanding risk key to entrepreneurial IT

Seaworks CEO provides insights into risk-management

What could a man who runs a business working on the seabed have to tell the NZ Computer Society — apart from insights into submarine fibre-optic cables?

The topic taken up by Bill Day, CEO of Seaworks, at a breakfast meeting earlier this month was entrepreneurialism — a matter that could, and some say should, occupy ICT professionals more than it does.

Perhaps it was a subtle counter-strike against those behind the ICT-NZ effort who accuse the NZCS of a narrow, over-technical and backward-looking view. At any rate, Day aroused great interest from the membership, with a number pinning him down after the meeting to discuss his approach to business.

The chief message of his presentation was that business risk should not be equated with gambling. Many people whose experience with risk is Lotto or a punt on the horses tend to equate the two. It’s not so, he says. Gambling is a win-lose situation with two alternatives. Business risk can, literally, be a win-win situation.

“I know that’s a cliché, but a lot of the time it’s true,” he says.

Many of the steps in the building of Seaworks have been risky, but involved wins for the company and its clients — in gaining new expertise and new equipment for Seaworks at the same time as getting the client’s job done.

He told the story of pretending, early in his career, to expertise in “gravity coring”, a technique of sampling sediments from the seabed, to gain a shot at a contract, then quickly finding out what it meant and exploring how it could be done with the resources the company had available or could obtain cheaply. They ended up doing the job from a vessel smaller than any used to date, and hence more quickly and at lower cost.

“We didn’t know it was usually done with big boats, because we were dumb,” he says.

If you “throw enough value on the table for the client” they will be willing to take the risk on board and subsidise what will not only be a good job done but often a valuable experience and a portal to further work in a new area.

Business risk is not binary, he says. If an approach doesn’t lead to a win, there are often alternatives that will — or to a different win — by another route.

Seaworks laid Telstra Saturn’s first cable around the coast using a reconditioned ship and “little inventions” like a way to control the plough that digs the cable trench from the shore rather than from a vessel at sea.

“Entrepreneurs are characterised by failure,” he says. “You keep putting your head up and getting it whacked,” but sticking it up again quickly somewhere else.

The entrepreneur “lives in the future” rather than dwelling on past glories or planning for the short term, Day says. Their eyes are always on a distant target and how to overcome the obstacles separating them from it. When they achieve the goal there may be time for a quick celebration, but by then the entrepreneur is envisaging the next goal.

It’s no good saying “but my head doesn’t work that way”, Day says. Everyone can find some time in their life when they were consumed with the prospect of a future event — even if they have to go back to their childhood and get a desired Christmas present.

Social interaction is essential to oil the wheels, he told the NZCS, telling a story unrepeatable in print about informal negotiations with a Middle Eastern client to survey old oilfields, over a meal including sheep’s testicles. After that, every business meal featured a round of Kiwi sheep jokes.

If there’s one shortcoming to the entrepreneurial mindset, he says, it’s that in concentrating on fast footwork to overcome sudden change in circumstances “we’re not tuned for slow change in the environment, and that’s often what catches us out.”

- CIO magazine features Entrepreneurial CIOs in its July issue.

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