Rethinking Risk: How Strategic Guardrails Can Actually Empower Innovation - Abim Kolawole, Chief Audit Executive at Northwestern Mutual - The TechEd Podcast

Episode Transcript
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Matt Kirchner (00:00):
Matt, it's Matt Kirkner on The TechEd Podcast.

(00:10):
Welcome to this week's episodetalking about, first of all, a
company that in my town ofMilwaukee, is absolutely
ubiquitous, Northwestern Mutual,huge, huge leader here in the
City of Milwaukee, tons ofphilanthropy, tons of community
leadership, doing some amazingthings. We're going to talk
about that today. Really excitedto bring that topic to our
audience. Also really excited tobring this particular guest, who

(00:33):
I'll introduce in just a moment.
We're going to talk about risk,but maybe not in the way that
you would think about risk.
We're going to get into somereally interesting angles about
how we should think about risk,how risk can even be a strategic
advantage for an organization.
And we're going to talk aboutthe world of audit as well,
which is a world that can kindof scare people away. Sometimes
nobody necessarily wants to beaudited. We will demystify that

(00:54):
a little bit with today's guestas well, someone who I'm really,
really excited to have on boardwith me. He's not only a great
community leader, an amazingcorporate leader, but he's a
great friend as well. I've knownABIM for quite a number of
years. ABIM coluoli is the ChiefAudit Executive for Northwestern
Mutual and ABIM, this is soawesome to have you in the

Abim Kolawole (01:15):
studio. Matt, absolutely. Thank you so much
for the opportunity to be onyour podcast. It's such a
wonderful pleasure. I've beenlooking forward to this
opportunity and really applaudall the things that you've been

doing. Well.
Thank you. It's going to begreat. I love your career
journey, which is like, it kindof feels like every three or
four years, we connect, and notonly do you have, like, a
different role at NorthwesternMutual but it's like a 90 degree
turn. It feels like, anyway,you've done so many great
things. They've all beenpromotions. They're all taking
on increasing responsibility andso on. But talk about that
career journey, and how do youend up being Chief Audit

(01:45):
Executive of a huge company likeNorthwestern

Mutual? Yeah, no, absolutely. Thanks so much, man
for that question. I would saymy career has just been a
privilege, a tremendous honor tohave the opportunity to lead at
a company like NorthwesternMutual. But it didn't just
happen like that. It startedwith sort of humble beginnings.
A little bit of my background, Igrew up in Nigeria, of sort of
humble parents, but there were acouple of foundational,

(02:08):
fundamental things that reallyaccounted for my success today,
and I'll talk a little bit aboutthat. I would say at the core of
it was grit and resilience andrecognition that opportunity is
something you go get so fastforward, I started my career in
New York in 1995 I had theopportunity to be a staff
attorney at the SEC theSecurities and Exchange
Commission, a flagship federalagency regulating securities

(02:31):
markets. But that story actuallyconnected to I remember I was a
young kid sitting on the couchwatching the movie Wall Street,
yeah, and Gecko gut. And getexactly and somewhere at the
end, somebody walked in andsaid, Hey, I'm from the SEC. And
I was thinking, Wall Street.
What the heck is this the SEC?
Fast forward to 1995 I'mstepping into the into the
building at number seven WallStreet Center. And that was the

(02:53):
beginning of my career. I hadthe opportunity to spend three
years there. They moved into acouple of law firms as a
transactional lawyer, greatbackground, and then had an
opportunity to move toMilwaukee, Wisconsin, to work
for this great financialservices company. What year was
that? That was 2003 in March of2003 after practicing in New
York for that period of time,Milwaukee is a great community

(03:14):
company. Is a great company,proceeded to spend 11 years in
the law department doingtransaction securities,
transactional work. And then,you know, I embarked on what I
call personal disruption, whichwas, again, this sort of
opportunity, you know, given toyou at North estimator to be the
best of who you can be. And thatled me to a couple of
operational roles. You know,over a couple of years

(03:35):
innovation, I had theopportunity to work in client
experience. And that hasculminated into my current role,
being the Chief Audit Executive.
So it's been a bit of a long andstored career. But like I said,
personal disruption and grit andresilience is at the core of
what's propelled me well,

and I love the fact that you start with grit
and resilience. You and I firstmet, I think, through our shared
love of cycling. That's rightinitially, and we talk about
that actually a little bit morerecently, more often, here on
The TechEd Podcast, but grit andresilience as important in
cycling as they are in lifewithout question. So I just want
to connect a dot, because youwent really quickly from these
humble beginnings in Nigeria toworking at the SEC. There's got

(04:13):
to be a story there as well.
What can you tell us aboutstarting out in this amazing
family in Nigeria and findingyour way to the SEC here in the
United States?

Yeah. So actually, I had gone to law
school in Nigeria, which is anundergraduate degree, unlike
here, where it's a graduatedegree, right? And I knew I
wanted to do something sort ofthe corporate, transactional
kind of field, sure, in Nigeriawas not as developed as perhaps
it is now. And so I, you know,again, that movie was quite
inspirational for me, right? Andin connecting the dots, you

(04:41):
know, I said to myself, hey,where can I find the opportunity
for full fulfillment? Andsomehow, I just had this
bullseye on continuing my legaleducation. So I went back to law
school again. Here, got a JD.
Did it twice, essentially, butwas really laser focused on how
I could build the chassis thatenables me to do. A variety of
things. And I think the criticalthinking, the written skills,

(05:02):
verbal communication skillsinfluence and skills are all
phenomenal traits. For sure, itreally helps you.

Yeah, they help you, indeed. And you start to
think about, first of all, it'sso interesting that you bring up
the movie Wall Street, which wasin a we it's a weird way,
because it was inspirational tome, and it doesn't. I mean, in
the end, the protagonist ends upbeing Charlie Sheen, who kind of
rages against the machinecreated by Gordon Gekko and all
of the, I guess, all of thenefarious things that were going

(05:30):
on in terms of influences, stockmarket and insider trading. One
of my lines that I still usefrom time to time is Blue Horse,
who loves anacod steel, which isthe in that email. So not even
knowing you were going to bringthat up here, I was a freshman
in business school, actually,when that movie came on, and I
remember going to see that moviewith my roommate at the time,
and now still my best friend,Jeff Sherman, and we were both

(05:51):
like, wow, this is a this isjust amazing. And even though
they kind of made in a good way,right? Because insider trading
is a horrible thing, you know,they made the antagonists, the
business people. It still, in away, inspired me toward maybe
doing that on a legit basis, andtook a much different route than
than you did to Wall Street. I,you know, I went into, into

(06:12):
manufacturing and business, butin the same way, totally,
totally inspired me. So it'sjust fascinating that we were
both inspired in some ways, byexactly the same movie, and
we'll link that movie, or atleast I'll link to it up in the
show notes for anybody. That'sinterested in in checking that
out. So amazing career journey,really cool career journey.
Found yourself in this littlegem of Milwaukee. You're the
Chief Audit Executive for thisjust incredible behemoth of a

(06:34):
company, incredibly greatcompany, Northwestern Mutual.
You've got that word audit inyour title. I was actually an
auditor, a bank auditor for anumber of years earlier. Oh,
yeah, absolutely. And everybodythinks I'm an engineer. I
actually started on the audit,accounting and finance side of
business. People want toassociate that word with
innovation, but yet, when youand I have talked about this
role, you actually see it as arole related to innovation. So

(06:56):
touch on that. How can wereframe the whole idea of what
an audit is for our audience,yeah?

So maybe I would start just talking a little bit
about, for me, the context ofaudit, yeah. And it actually
connects to what we're talkingabout a little bit earlier on,
just in the context of the movieWall Street. At the core of part
of what I was attracted to themovie, and ultimately, the
beginning of my career wasaround this notion of trust,
trust and integrity in thesecurities markets is something

(07:21):
that I was privileged to be apart of. Fast forward to audit.
At the core of what I do isreally to assure trust,
confidence and integrity for ourclients in the company of
Northwestern Mutual, and auditis a phenomenal function that
helps to play a role in thattrust, confidence and integrity.
So I just want to kind of levelset in terms of what winning

(07:43):
looks like at the end of theday, is that the clients
continue to have trust in us,because that's that's the most
important currency, that's whatwe stand for at the end of the
day, that we can keep ourpromises

absolutely clients. And I'm just before you
go on, and I want to make sureyou do just a quick observation.
This was something I learnedfrom a mentor of mine years and
years ago when it comes to auditwhen it comes to being able to
have trust in financial markets.
And we were talking about someof the still some of the same
geopolitical things that we dealwith today on the economic and
financial side. And I wascommenting on a specific country
and some of the things that theywere doing. And do we have to

(08:13):
worry about the Americas in theUnited States position as a
financial leader here on theglobe. And his answer was, never
underestimate the value ofsecure markets. And he said, we
have something here in the USthat most people don't
recognize, which is that we haveregulation, we have security, we
have trust in our markets. Wehave people who, when they buy a

(08:35):
security, whether that's a stockor a bond or a derivative or
whatever it is, recognize thatthere's a system in place for
making sure that that value ismaintained, at least from a
regulatory standpoint, makingsure people are following by the
rules, which is just a, youknow, 20 years later, that
lesson for me, coming back toexactly what you just said,
trust and integrity in markets,which I never really thought

(08:55):
about that as a in terms of, youknow, an audit rule, but It
makes complete sense

to me, absolutely. I think what you
said completely underscoresthis. So at the core, like I
said, you know, it's abouttrust, confidence and integrity.
And when you think aboutinnovation, for me, I feel like
innovation is the jet fuel thatenables you to be able to do
that in space, you know, in ascalable way. So let me just
break that down a little bit. Atthe core, there are four things

(09:24):
that are connected to thepurpose of internal audit. I
would say the ability to deliverobjective assurance, which
assurance essentially isconfidence. Second is to provide
advice to the business in termsof what they can do better based
on your observations. The thirdis unique insights that you may
bring because you have theopportunity unfettered access to

(09:44):
data, to be able to explore andexamine the company
holistically, and the last isforesight, trending, what might
go wrong? How do you continue tocreate that assurance that trust
and integrity, and when youtalked about sort of the larger,
kind of macro thing it's about,couldn't. Controls and
standards, controls andstandards and a structural rule

(10:04):
of law to bring all those thingsto bear. So we have to think
very innovatively as a mechanismlike said, to be able to deliver
on that, on those four thingsthat I mentioned, we recognize
that part of innovation is interms of people, right how you
really up skill use people andtrain them on critical
capabilities, data andanalytics, the ability to take

(10:25):
large data sets and deriveunique insights through how you
analyze the data that enablesyou to be able to, like, look
for the needle in the hay stockabout what might happen. And, of
course, technology, your techcapabilities, all those things
that capabilities that existessentially a means to the end
we've talked about the endtrust, confidence and integrity,
for sure, and so innovation iscritical. It may seem like it's

(10:46):
not the sexiest of things todeploy an internal audit, but my
stakeholders, the auditcommittee and the senior
leadership team, the clients,all those people, the external
regulators, all thosestakeholders, want to make sure
that you're leveraging everycapability you can to really
deeply understand the companyand to create the kind of
confidence that everyone

needs. That's a really fascinating answer. You
know, I serve on a few orders ofmagnitude smaller scale. On I
actually chair the auditcommittee of manufacturing
company here in Wisconsin. Andone of the things that has been
interesting for me to watch isjust how the evolution of it in
my day of being an auditor, wegave some advice, but it was
really around assurance, right?
It was about, you know, here'smy income statement, here's my

(11:28):
balance sheet, go through thenumbers, make sure that we can
rely on those numbers, right?
And we did all kinds of testingand sampling and, you know, and
it was really at the end, youwere writing an opinion that
said, yeah, these financialstatements are produced in
compliance or in associationwith standards of the gap,
right? And that was 99% of thejob. And yeah, there might be a

(11:49):
few things on the end and on amanagement consulting side, as I
hear you talk about audit today.
Yes, that is no less important,right? We need to have a
function that says we can relyon whatever data is coming from,
wherever it's coming from,that's really, really important.
But when you talk about thesecond item that you talked
about, which is advising thecompany, you talk about the
fourth item that you talkedabout, which is looking at
trends in the data and lookingat trends in markets, those

(12:11):
aren't things that people wouldtraditionally associate with
audit, but it's really that'swhere, in some ways, where the
innovation is taking place. Isthat fair

to say absolutely, you know, and just
to take a step back again,because I am not the most
traditional auditor. I justdescribed my background. But

what the most traditional anything? You're
mad.

But what I love about this, because we're
beginning to talk about somelike just key fundamental
leadership skill sets, right? Iwould expect that any leader has
to continue to think aboutwhether you're running a
business, whether you're runningthe function, thinking outside
of the box and thinkinginnovatively to drive a value.
And that's no different frominternal audit. So your points

(12:52):
are absolutely well taken. Andyou know most people will say
you never leave a place the sameway you found it. Internal Audit
happens to be a great function,and I have to really think about
the unlocks that enables us todeliver value. Because, to your
point again, I mean, I think youstarted by saying, hey, you
know, most people are not reallylooking forward to the audit,
but I'm trying to flip thenarrative through this

(13:12):
innovative lens about thinkabout how we might add value.
You are placing bets everysingle day, and you want to make
sure that your bets actuallyyield fruit. Come help me
understand my priorities andleverage your innovative
capabilities to tell me what aremy watch points. How can I
actually accelerate thepriorities or the, you know, or

(13:34):
some of my own strategy to beable to achieve, like I said,
you know, the the outcomesyou're looking for. So I'm very,
very passionate aboutinnovation, very passionate
about leadership. Innovation isa competency within overall
leadership, but also equallypassionate about the role of
internal audit in the

assurance, yeah, which is, I mean, you're opening
my eyes to what it can be. Sohere's, here's a question that
occurred to me, you're leading ateam people, obviously, and so
you've got, you're working withthose people to maybe reframe
their perception or theirparadigm around what the
function of audit is. You have ahuge organization like Northwest
mutual how many total employeesjust to put in? We have about

(14:11):
8500 Yeah, so 8500 folks thatare in that organization that
that you're necessarilyinteracting with every one of
them every day, but you'reinteracting with divisional
leaders and, you know, othersenior executives and so on, how
much of the job of parentchanging that paradigm is
helping your team understandthat they have to think
differently about their role,and how much of it is working
with the entire organization tosay, hey, we're not just here to

(14:34):
look at your data and tellsomebody else whether or not
it's accurate. We've got allthis other value we can add. How
do you break that down?

It's a great question, and again, I would
answer it by underscoring therole of a leader. There's a
particular string here that'saround leadership the first
thing I had to do. So what's theproblem to be solved? As an
example, the problem to besolved is enabling the
enterprise, whatever theenterprise, to see, internal
audit among other risk partners.
Are the true strategic partnerand enabler. That's a problem to

(15:01):
be solved. To solve that, youhave to think innovatively. And
what we had to do, what I had todo, was have a vision. We have a
vision called Vision 2028 andthe vision 2028 and you build a
strategy. So we had a threepronged strategy that ties into
so that you're not just likedeveloping like ad hoc
initiatives, everything iscentered, grounded and rooted in

(15:22):
a strategy. And to your point,the first was around elevating
the audit experience for allstakeholders, from my team
members to the auditees to theaudit committee of the board to
the senior leadership team. Howshould they be thinking? How do
they think differently about thebrand and the perception of
internal audit and the tons ofinitiatives that have to tie to

(15:42):
that. The second key strategicoutcome was around operational
effectiveness and agility, andthat's where data and analytics
and things like the oil thatmakes you do your job better
comes in. And the third was thefundamental rails around talent
and culture upskilling yourpeople so that they're more you
do those three things very well,and what you just asked in terms

(16:04):
of changing the brand perceptionbegins to happen. People begin
to think of you differently, seeyou differently. You'll be more
efficient. You'll be moreeffective. You're helping to de
risk certain areas. People leanon you more, right? Because they
begin to truly perceive thevalue. So I just wanted to frame
that again, from a leadershipstandpoint, there's got to be
the vision, the strategy, andthen you start seeing the value

(16:26):
that you deliver.

And it's like anything else, whether I'm
serving a customer in abusiness, whether I'm a teacher
serving a student, as soon asyou can start to show some of
those changes and show whereyou're adding value, all of a
sudden it flips from thosepeople are just here to audit to
I need to go find that guy,because he can help me improve
doing what I'm doing, whatevermy responsibility is in the
organization. I know you knowall of these ideas and beliefs

(16:52):
that you have around leadership,around culture, around strategy,
to your earlier point. You knowyou would think if somebody
said, Hey, you got a Chief AuditExecutive from a major company
coming in to do a podcast, Iwould just assume immediately
that that person studiedaccounting, and they went to
work for one of the now bigthree, you know, accounting
firms. And then you know,whatever that that was their

(17:13):
path, right? And in your case,you know, you come at it, as you
mentioned earlier, from thelegal perspective, and with it,
with a background in law. Howdoes that influence the way that
you do your job? How does itinfluence the way that your team
maybe thinks about you in thatrole? And were there any hurdles
to get over? Kind of going from,you know, okay, I've got this
different background, and nowI'm taking on this, this

(17:35):
responsibility.

No, it's a great question to your point. It's
not, it's not intuitive to manypeople, for instance, like, oh,
you know, you expect to have aCPA. But I think at the core,
what one has to think about is,what are the skills for success
of somebody in this role?
Because at the core, you're notblocking and tackling and
grinding and doing audits as theChief Audit Executive, right?
You have somebody in thetrenches, yeah, of course. So to

(17:59):
me, really, I would frame thegreatest skill sets as strategic
influence and leadership. I amin the persuasion business, in
the due diligence business, inthe sense making kind of
business. And those skill setsheavily derived from my prior
roles, particularly in legal andeven in operational. I
understand operations. Iunderstand controls a first line

(18:20):
accountability. You're able toreally sense, make you
empathetic to the business,right? You're able to sit down
with the business leader andunderstand, but on the other
hand, you recognize that the wayyou frame things, why this is an
issue, what the risk severityis, has to make sense and
resonate right away, sure. Andso the culmination of the legal

(18:41):
skill sets and what I've donebefore, I'm not going to say,
made it easy, right? But so muchmore transferable when you think
about that kind of deliverymechanism. So people often know,
oh, so are you an accountant?
Are you a CP? And, you know,it's like the you know? And so
I've been trying to bring myteam along also by saying, and
actually, one of the key thingswe're working on is, I believe

(19:04):
the auditor of the future has asuperpower, and the superpower
is the ability to reallycommunicate and influence and
break down complex informationinto simple, digestible things
that move somebody to action.

Love it, yep. So the first thing, I think, is
that we should do a quiz. Weshould have done a quiz with the
audience and said, we have twopeople in a room. One of them is
a Chief Audit Executive of oneof the largest companies in
Wisconsin, this huge householdname. The other one is a
education technology executive,runs several ed tech companies

(19:39):
and is a podcast host. Which ofthe two of those is a CPA? And
most of them probably wouldn'thave guessed that it was me, but
actually I would have been thecorrect answer. You would have
been the correct answer. But asyou're talking about that, there
are a couple more things of BIMthat occur to me. I spent time
working in county government fora number of years. Then I was in
public accounting, then I ran anRFID. Company for improve. I

(20:01):
stepped in as controller andended up running that business.
And then I ran a manufacturingcompany, spin off of Rockwell
Automation. Then I spent timerunning another private equity
back manufacturing business. NowI'm in ed tech, and everybody's
like, you know, how in the worlddo you jump from, yeah, from one
to one to one to one? And myanswer has always been, they're
all the same. I mean, thetechnology and the products and
the customers are different. Butwhat makes the businesses

(20:22):
successful? Businessessuccessful, which is culture,
talent, treating people well,building a reputation, finding
ways to innovate, finding theblue sky in the space that
you're in. In other words, dosomething that nobody else is
doing. So you create your ownmarket. I know you know that,
but making sure the audiencedoes as well. Those are the
things, at least for me, thatwas like the rest of it is, you
know, the product and thetechnology. You got plenty of

(20:43):
people around you to figure thatout. That's the importance of
having having an amazing team.
So speaking of that technology,and learning technology and
leveraging it, you know, youtalk about technology being a
quote, an accelerant, right? Soit's literally, I love that word
accelerate for a whole bunch ofreasons. When you think about
that it's an accelerant, butyou've also said only if it's
delivered safely. So help meunderstand what you mean by

(21:04):
that? What? How is technology anaccelerant, but only if you're
delivering it in a safe fashion?

Yeah. So two quick points on that,
technology, obviously is acapability, and I've always
expected that tech partners orthird party vendors really need
to understand the applicabilityof technology in the context of
what you're trying to do.
Essentially business enablingtechnology. And once you dial it
in right, like, hey, if weleverage this tech capability,

(21:31):
these are the outcomes thatyou're more likely to achieve on
this timeline. So it becomes anaccelerant, but sometimes people
do that without really makingsure that. This is when I say
safe like fit for purpose, andyou don't have to take steps
back because you didn't kick theties around a couple of things.
So I have with my team try to beas close as possible, whether

(21:55):
it's software delivery lifecycle or whatever the capability
maybe, even third parties tomake sure that we think about
the impact like security as anexample is a critical everybody
can relate to security andintegrity of that particularly
if that capability is going toingest real, confidential or
proprietary data, you might beas safe and secure. So the
security of tech capability isjust using that example is

(22:18):
critical, because when itdoesn't work, that's the time
when you tend to lose thegreatest the currency we're
talking about. Imagine ifthere's a breach and your
clients are exposed, or the datais exposed just because maybe
you didn't kick the tiesappropriately or make sure you
harden it. It could reallydetract from tech accelerating
your

business, for sure, well, and detract from
reputation, and especially in a,you know, an organization like
yours, where the what was, itwas the trust integrity, and yet
another was a C confidence inthe middle of that. And I mean,
especially in that case, right?
I mean, where your the trustthat your clients have in your
organization is really, that'sthe core of your value, right? I
mean, that's what they're,quote, buying us. That's what,

(22:59):
that's why they do business withan organization in northwestern
like Northwestern Mutual. Andthere's certainly direct harm
that can be done if security isbreached, and then the
reputational harm that canfollow from that is just
absolutely, you know, canabsolutely crush an
organization. So that's why it'sreally, really important. And
it's not as simple as saying,Hey, we're not going to upload
someone's financial informationto an open version of chat. GPT.

(23:19):
I mean, it goes way, way furtherthan that, of really thinking
through on the front end, all ofthe implications of we're
engaging in new technology.
We're bringing new technology onboard. What are all the
different aspects of risk? Isthat a formal process? Or how do
you how do you go through

that? It is somewhat formal, but obviously
it's something we continue todial and when I say it is
somewhat formal, there needs tobe an operating rhythm, or sort
of operating model rather thatfacilitates that. So it starts
with business technologypartners, understanding exactly
what their points of alignmentin terms of the capability. Then

(23:54):
it requires the leaders again.
That's why this is a leadershipthing, to take a step back and
think, what are the otherinterdependencies? Who else is
within the ecosystem that weneed to assure and create the
confidence, whether it's legal,whether it's compliance, whether
it's risk, the right partnersneed to be at the table like
sort of a SWAT team, because ifnot done at that point, you run
ahead and you deliver thecapability and oops, something

(24:16):
is wrong. But it reallyfundamentally, again, it's
leadership behavior to recognizethose interdependencies and make
sure it's working right from theground floor. And that's
something I'm very proud of,that we do a great job at
Northwestern Mutual. But again,it's just a real strong
leadership competency that'sneeded for any business.

And it's amazing how often you bring up this idea
of leadership, and how much ofit comes back to certainly
leadership as a noun and as averb, right? I mean leadership
in terms of the leadership team,the senior leadership team of
the organization. But also, howare we going about and actively
leading migration to newtechnologies, and doing that in
a way that we're mitigating andminimizing, if not eliminating,
risk? And then we start thinkingabout this whole idea of you.

(25:00):
Anytime we're talking aboutrisk, it feels like we're on the
defensive, right? I mean, we'rebusy kind of thinking through,
how do I prevent something badfrom happening, and whether
that's, you know, workers compinsurance, whether it's property
and casualty insurance, whetherit's health insurance, whether
it's finding other areas of riskin our business and mitigating
those, that's defense, right?
You've got a whole theory aboutusing risk offensively and

(25:21):
actually using it to drive valueand to improve your
organization. Talk about

that. Yeah, great points again, two points that I
have, or maybe threeperspectives. The first is
there's still a behavior andoperating rhythm aspect of it
that I think is number one, andthat's for the business,
thinking about whatever theinitiative is, inviting the risk
partners to the table, becauserisk as a strategic enabler is
what I continue to say, hey,help us understand what we might

(25:50):
not be seeing as a startingpoint right here, where we're
placing our bets, the vision,the strategy for the business.
Then risk partners like myselfhelping to point out things that
we may have seen in the pastfrom prior audits, is a second
step. But the third step reallyis and organizations need to
mature around defining your riskappetite, okay, risk tolerance

(26:11):
and understanding what thewatermark is when you're outside
on the line or below your risk.
And that's where you reallybegin to with all the things I
talked about. You can understandthat, wow, I am within appetite.
Maybe I may be able to lean in alittle bit more, because you
helped me design the key riskindicators that now tells me if
I'm within appetite, if I'mclearly outside of appetite, I

(26:31):
can go on the offense I need to,or maybe I can. It just depends.
Right eyes wide open. Yep. Sothere's an aspect of risk
tolerance and risk appetite, andalso a framework for risk
acceptance, because it does costmoney sometimes to sort of shore
up, and sometimes you might justsay, hey, you know what? Eyes
wide open, we actually going totolerate this risk for us, it

(26:53):
depends on what the severity ofthe risk. Right? You know, you
can never do it in perpetuity.
You have the rightconversations, but at least you
know management of business isdoing this. Eyes wide open. So
again, risk tolerance, riskappetite, risk acceptance,
bringing the right parties tothe table as strategic enablers,
having those conversations, allthose things working very well,

(27:17):
enables the business to say,Wow, thank you so much.
Actually, we can lean in alittle bit more here based on
these guardrails that we've putin place. In the absence of
that. To your point, theperception continues to be that
you're just defense, and to acertain extent, sometimes you're
just the party that says no,right, as opposed to

enabling, Yep, absolutely. That was when I was
leading an accounting team. Thisgoes back years and years ago.
That was my whole thesis, forbetter or for worse was that
we're not going to be theorganization or the part of the
company that stands in the wayof progress. We're going to be
here to facilitate it. We'regoing to make sure that we're
doing it responsibly andhonestly, and we're going to
hold ourselves accountable, butwe're not going to be the

(27:53):
roadblock that prevents theorganization from moving
forward. You know, I think asyou were talking about risk
tolerance and appetite for risk,I think you make some great
points, and it's really thatanswer isn't the same for every
organization. And I'll tell youa story where I learned that,
not even the hard way, everyonce in a while, we have people
that kind of set us straight inthe conversation. And I was, I
was in a in a meeting, and itwas without going into too many

(28:15):
details. It was an organizationwhere we were advising a large
client on basically a businessendeavor. And I was like, myth,
this is my company. I would makethis decision tomorrow. We would
just go and somebody was like,You know what? That's fine for
you to say that, but you've got1000s of shareholders on the
other side of this relationshipin this company that are
counting on us to make really,really good decisions. And if

(28:35):
you're doing that with your ownmoney, and you're making that
decision, and you're the onethat's going to live or die by
that decision, that's fine, butthis is totally different. We're
here responsible. This isn't ourcompany. We're here, you know,
protecting the investment andreally being the caretaker for
this incredible value. And it'sa totally different way of
looking at risk. And so I thinkpart of what I took away from

(28:55):
that last answer, which waseloquent, as can be expected,
was that risk and risk and risktolerance is different for every
organization. We have to beintentional about that. We have
to think about that. You know, Iwas also thinking about, you can
correct me if I'm wrong. Butdoes our mitigation of risk and
really being thoughtful andcareful about it? Does that
become a value proposition tocustomers sometimes too? And I'm

(29:18):
thinking about, we do in one ofour ed tech companies, a lot of
E learning work, and we actuallypicked up several years ago, one
of our partners picked up theirentire they were all on site
service, on prem servers thatwere running an entire e
learning library for customers.
And one of the things that thatorganization did with our
support was pick that wholething up and put it in the
cloud. And in that case, theypartnered with AWS and lots of

(29:39):
options, but that was one theychose, and the whole idea was,
now it's a value proposition forcustomers. We're mitigating this
risk. For you, here's how we'redoing it, as a way of tightening
that relationship. And I've gotto believe that. In fact, I know
that's got to Don't tell me,don't say anything that you
can't but that's got to be ahuge part of how Northwestern
Mutual thinks about. De riskingwhatever it is for your clients

(30:00):
is that it's one more reason forfolks to do business with you.

Yeah. You know, at the core, Matt, we are the
policyholders company. We havepolicyholders, and we have
clients, and we exist for thebenefit of our policyholders.
Principle of mutuality, whichbasically means that we have to
keep the company in fightingshape for generations, right? We
have this notion of a multigenerational compact that we're
making decisions on a long termbasis so the company can be

(30:27):
around. That is probably thegreatest, most resounding
example of why we need to thinkabout how to maximize
policyholder benefit, but alsokeep the company in fighting
shape and risk. And the lens wehave from a risk perspective, is
a great way of thinking aboutit. And I just so love that,
that everyone is looking fordecades, looking ahead decades,

(30:50):
and saying, if we don't do theright thing today, this company
will not be there for the next167, plus years. So risk is
fundamental in creating valuefor the policyholders. But
that's not to say that thepoints we're making earlier on,
that we recognize that sometimesyou might be able to you should
lean in, because, you know,you're also creating value by
like, entering into newfrontiers of things that present

(31:13):
risk. And so there's an aspectof the offense, I would say it's
sort of an and the offense andthe defense at the end of the
day, like encapsulate what wetalked about policyholder value
and keeping the company infighting shape for the long
term. But just wanted to doubleclick on the prior conversation.
Those things always require thatoperating rhythm about bringing
your risk partners or other sortof people within the ecosystem

(31:36):
to bear, because if you don't,you're going to overlook what
you don't know and just runahead, yep and deliver on things
that may come back to bite

you as we're having this conversation, I'm
reflecting on comments that weremade to me by actually two
different fortune 500 CEOs, thefirst one being Tom linebarger,
who, at the time was theChairman and CEO of Cummins. And
he talked about he was justmaniacal about this. And I met
him through a close, closefriend of mine. Then he had this
big job, right? Cummins is ahuge company. I don't know how

(32:04):
many 10s of billions of dollarsof revenue they were at the
time. This goes back probablyfive or so years. And he said,
I'm not the chairman and CEO ofCummins. He said, I am a steward
of this incredible asset for thebenefit of Yeah, that was the
way he looked at it. He's like,this company's been around
before me. It's going to bearound after me. I'm a steward
of this, and that's my job, andI've got an obligation to your
point, make sure that you knowwhether it's 167 years or

(32:27):
whatever that period of time isthat, how long Northwestern
Mutual has been around? Yeah,about 167 I mean, that's crazy.
I mean, awesome. Obviouslyyou're doing things right, and
so you're this incrediblesteward. The other one is Todd
wanick, who's the CEO of AshleyFurniture industries and Todd
talks about having to what hesays is rebirth your company
every seven years. He's like, welive in a changing world, and

(32:48):
what worked 10 years ago isn'tgoing to work 10 years from now,
we have to revision the futureof our organization every seven
years, and that requires leaningin and being willing to take a
certain amount of risk. So Ithink, you know, just kind of
putting those two together. I'massuming you kind of see it
somewhat the same way.

No question, no question. It's so far so good.
It's proven to be a greatapproach to complement the
business model and ensuresuccess of the multi year
strategy and all that just sortof, you know, goes back to the
first point we made about, sortof value, in terms of value
delivery and preserving thismulti generational comeback we

talked about, absolutely. So it's value and
relevance both, right? And soyou know, one of the things
you're serving, you know,policyholders, I'm assuming, you
know, I'm more more familiar,frankly, with kind of the
typical corporate model where wehave a fiduciary responsibility
to shareholders, your fiduciaryresponsibility, and, in other
words, your your obligation toact solely in their interest, or
at least, you know, largely intheir interest, never against
our interest. To yourpolicyholders and you also have

(33:43):
clients, it's important toremain relevant to both of those
groups of people, right? Yes.
And so talk about how you'releveraging technology to make
sure that you're continuallyrelevant to both stakeholders,
your policyholders, to whom youhave is fiduciary
responsibility, and your clientswhom you're serving.

Yeah, no, it's a very good question for a company
like I said, that's been aroundfor 167, plus years, you have to
be able to remain relevant togrow, and growth is very
important. And a couple ofdimensions where technology
plays a role. A key aspect ofthat business model is having
trusted advisors, financialadvisors, who are on the front

(34:18):
lines of engaging their clientsand their specific tools that
they may use in understandingyou, your hopes, ones, dreams
and aspirations, and being ableto sort of model what your
financial future may look like.
That's the first set of frontierof relevance. And there's
specific technology capabilitiesthat we leverage the other
technology capabilities thatmakes the life of an advisor

(34:40):
easier, so to speak, so they cando their jobs and essentially
scale it so a you need the righttech capabilities to attract the
right people into the system, tomake them, when I say them, the
financial advisors, as efficientand as effective as possible.
That is really being able toknow your clients. So third is
the technology capabilities totailor a personalized plan

(35:02):
that's really dialed in tofulfill your hopes and
aspirations. And then third, ora critical part, is how we then
service those clients over alifetime, the technology
capabilities that we need tohave within the home office,
whether it's in the servicing orunderwriting or claims
processing, or name, any of theoperational area, all those

(35:23):
things combined, continues tocreate relevance for our
clients. They see us as relevantbecause we're in the business of
helping, showing them how we'refulfilling the hope streams and
aspirations and hopefully makingit easy for advisors to be able
to do their jobs a lot easierand have the insight. So the
landscape of tech capability isnever over, right or not, right?
It continues. But relevance issomething that is of paramount

(35:47):
importance. In fact, a CEO, newCEO,

Unknown (35:52):
Tim Garand, I was just with him a couple weeks ago. Is
that right? Okay, so you sharedwith you some of these focus
areas. We just

chatted briefly.
We were actually at a charityevent for a local, local school
here in Milwaukee, and had achance Mark Mone, who's the now
almost to be former chancellorof UW University of Wisconsin.
Milwaukee, introduced him and Iso super, super person, yeah,

very, very, just a great visionary. We're really
enjoying having him leading thecompany. And he spoke to four
key focus areas, okay? And oneof them was around, growing our
relevance. We have to continueto think about relevance and
like, say it again, there'speople, there's processes, but
technology plays a huge role inhow we can be relevant to our
clients.

For sure, you know, I It occurs to me, I was
reading the study not too longago. I think it was delight. But
don't quote me on that. Talkedabout Gen Z and what's important
to Gen Z in a career. And itsaid 80% of Gen Z want to work
in tech, which I thought wasreally interesting. I spent a
lot of my time in manufacturing,right? 80% I spent a lot of my
time in manufacturing. We don'tthink about, like, if somebody's

(36:52):
going to think about, all right,what's a tech career? Well,
that's going to work for SpaceX,or that's going to Tesla, or
that's going to Facebook or ormeadow, and whatever we call it.
Now that's what they think ofwhen it comes to tech. They
don't think of manufacturing.
They probably don't think offinance and insurance either,
right? And InvestmentManagement. But in truth, those
are tech careers. And as youwere talking about attracting
advisors and attracting talentand being relevant, so much of

(37:14):
that is telling the story abouthow tech is transforming the
world that you're in, right?
And, I mean, am I right that thecareers at Northwestern Mutual,
in a lot of ways, are techcareers, or there's plenty of
them

available. Yeah.
I mean, there are lots ofopportunities, lots of
positions, jobs in NorthwesternMutual that obviously are tech
related. No question. But I muchprefer that our tech partners
employees really attuned to thebusiness what needs to be
delivered, because tech initself has a standalone
capability. To me is, I mean, itdoes the job, but how do you

(37:47):
know if you're delivering on theoutcomes? Right? So there's
certainly lots and lots ofopportunities, and not system.
You should be able to do that.
But at the end of the day, forme, the most important thing is,
are people in better financialshape? Do they go to sleep at
night? Do they have peace ofmind? That's the outcome for
people. Peace of mind. Can theylive their best lives now and

(38:11):
then? Let's think about how techcan enable that. So I feel like
needs to be a connected thing tomaximize your success, as
opposed to just thinking interms of tech in search of the
business

outcome, right?
Yeah, exactly. A solution insearch of a problem, right?
Exactly. And we talk about,again, going back to my
experience in manufacturing, alot of folks, for a long time
have been doing continuous orimprovement or Kaizen events,
yes. And we always talk about,to what end, right? It's great
to do continuous improvement.
What's the goal? Let's go doingkaizen. For the sake of doing
Kaizen is a fool's errand. It's,let's pick a problem. Let's find

(38:43):
a problem. Let's bring that tobear. To solve the problem.
We're doing the same thing withindustry 4.0 technology in
manufacturing, which is, yeah,you can have smart sensors and
devices on the edge. You can befeeding all this data up to the
cloud. You can use AI to findpatterns. And what problem are
you trying to solve correct andyou know, the same thing is true
for technology, which is, in theend, you have a value
proposition for your clients andyour policyholders. That is,

(39:06):
it's not how much tech can weload into this business and brag
about it's, how are weleveraging that to the end of
improving people's lives andquestion lines. So I really like
the way

you can, yeah, there was some sort of, you
know, and people have differentperspectives, sure, debates or
discussions about whethernothing special is a tech
company or a tech driven companyor tech enabled company,
whatever the case may be, thetruth is somewhere in there, I'd
like to believe it's a techenabled company, because we
talked about tech and the needto build those capabilities to

(39:36):
really accelerate, you know,optimize, the business outcomes
that you want. So tech isfundamental to how we create
relevance.

Yep, for sure.
And I love the way you answeredthat question, and I think
that's a really great way tothink about the the other thing
I want us to think about herefor a moment a BIM is the
education sector, and I knowjust from being in and around
the orbit of Northwestern Mutualhow involved you are in. In
education, certainly greatthings going on in partnership
with organizations like my almamater, Marquette, University,
University of Wisconsin,Milwaukee, I know you have a ton

(40:07):
of endeavors around k 12education, I'd be interested in
this. And as much as we have alot of educators that listen to
this podcast, what do you thinkthey can learn from Northwestern
Mutual when it comes to anythingrelated to risk or technology
and morphing that clientexperience. What could they
learn from the work that you'redoing?

Yes, I just very much appreciate the role that
Northwich mutual plays in termsof its footprint within the
Milwaukee and Wisconsin area. Imean, these things are very,
very important taking a stepback. I think we need to
rethink, or maybe folks arethinking about that just in
terms of what I would calltransforming the student
experience. And it all startswith design thinking. What does

(40:48):
that student experience looklike, 345, years from now?
Because in the absence of designthinking, like, you know, which
is more contextual, like, whatis the role of student? How are
they going to learn? And howdoes tech enable that. I think
it fundamentally starts fromthere, building that vision, and
then what must happen? Ianalogize that to kind of what
we did with the advisorexperience or client experience.

(41:11):
We need to write, get into theheads of the clients and
understand what transformingthat experience looks like. So I
would say a key takeaway wouldbe, maybe those studies have
been done already in terms ofthe design thinking, like,
what's the problem to be solved,you know? And then what are the
capabilities that need to bebuilt? And even maybe the
teacher experience? How do werethink and transform the

(41:31):
teacher experience? And then,where does technology play a
role? But you have to understandwhat outcomes you're looking for
now, based on that designthinking,

absolutely I wasn't expecting the last
question to be such a perfecttee up for the one that you just
answered, but the truth of thematter is that it's really the
same thing. It's let's not doeducation for the sake of
education. What's the end? Whatare we after? And then, how do
we align all of our resources toproduce that empathy? That's a
great way of thinking abouteducation, and great way of
thinking about the work thatyou're doing at Northwestern

(41:59):
Mutual. Got two final questionsfor you, and one and the ones
that we ask of them every one ofour guests here on The TechEd
Podcast, and we always, we getgreat answers, and we, I love
the different variety ofanswers. I know this first one
I'm gonna I'm fascinated by youranswer already, and you haven't
even started answering thequestion. But your education
experience obviously muchdifferent from mine, much
different from a lot of thefolks that are listening to this

(42:19):
podcast. Growing up in Nigeria,going to law school there as an
undergrad degree, and thencoming here to the US and
continuing that education,you've got some really
interesting perspectives oneducation as a result of that.
Is there something that youbelieve about education that
would surprise our listeners?

How do we enable the best critical thinking, in
my opinion, is something I'mreally passionate about. I do
this for my kids. I mean, thereall kinds of capabilities to the
engine, AI, but not losing thatcritical thinking, because
that's the continuum, even afterleaving school, that carries
through and with my department,with my auditors, I continue to

(42:59):
talk about the value of criticalthinking. So I would emphasize
so maybe that's not a surprise,necessarily, but what do we need
to do to really continue todrive that critical thinking,
that depth of curiosity is whatI would say is, that's a thread
that I've carried through myentire education

Absolutely. And I agree with you, and I will tell
you that, you know, we talk alot here on the podcast about
how education is going to bedisrupted, already is being and
will be continued at anincreasing pace. And one of the
things I'm a huge believer of isexactly what you talk about.
What does education need to looklike when a student can get the
answer to any question inseconds using Gen AI or just
even going to Google? And so wereally have to rethink that,

(43:38):
that it's not necessarily aboutrote memorization. It's not
about the sage on the stagejust, you know, imparting wisdom
to the students, which wasnecessary in the days of
Aristotle, because that was ouronly way to convey information.
We got all kinds of ways toconvey information now. So we're
believers that you know what'sgoing to happen is that, in the
past, you went to school to kindof learn and gain knowledge, and
you went to Home to practice.
That's going to flip and flip,yeah, and we're going to we're

(43:59):
gonna, we're gonna stay, andwe'll still go to school to
learn, but we can learn in time.
We can, like, there's bazillionsof ways. You got LinkedIn
learning. You've got all kindsof E learning platforms. You
have YouTube, you have ticktock. You can, I mean, you can
consume information any way thatyou want. Anything that you want
to learn at any time isavailable to you, if you're, you
know, at least in in thetechnological world, there's,
there's just no question aboutthat. But then when we go to

(44:21):
school, how do we apply what welearned? How do we solve
problems? How do wetroubleshoot? How do we think
critically? I'm also just to addon, as somebody who was produced
by a liberal arts education, andI went to Marquette, and there
were some things I think youmiss out and not having some of
the hands on. At least backthen, I know that's changed, but
certainly some of the hugebenefits I had, we were required

(44:43):
to take nine credits in Theo andnine credits in philosophy and
in addition to the businessclasses and everything else I
was taking in the number ofhistory credits as well as we
started thinking about the worldof AI, in human responsibility
in the world of AI, there wasjust an article in the Wall
Street Journal this morningabout the risks. Of just letting
AI go without any guardrailsaround it, we have to really

(45:04):
think about what it means to betruly human and what it means to
be in the position in the worldthat we're in, so that if we are
engaging in AI and creating likeagents, which are different than
just software programs, agentsthink for themselves. They make
their own decisions. We got tomake sure that we're
understanding our role in AI andall

that. Yeah, I just, I just feel like people
are gonna go on to differentwalks of life, and let's just
take business leaders. Yes, youcan leverage AI. You can
leverage Gen AI. But how do weleverage the power of the unlock
that comes from the ability toprocess information exactly
you're standing you'redelivering a presentation,
you're in a boardroom, orwhatever the case may be, you

(45:43):
don't have your computer to beable to like, query for Gen, AI,
what do you do in that moment interms of the ability to process
information, process things, youknow, just and that's why I feel
like that is probably the mostfundamental thing. I call it
sort of unlocking the ability tojust process information.

I think it's totally true. Really a super,
super important skill, whetheryou're in a boardroom, whether
you're making a presentation,whether you're sitting in a
podcast studio, not knowing whatquestion is coming in
necessarily, and being able toprocess that question and answer
it in a way that's interestingto the audience, that's honest
and also doesn't cross anyregulatory boundaries and so on
that I know you have to complywith in a role like yours. One

(46:21):
final question for vim colawale,as we wrap up our time on The
TechEd Podcast, I love this oneas well. I know you as a 15 year
old, your life, you know, wasprobably different than mine was
as a 15 year old, probablydifferent than everybody's. But
you talk about your humblebeginnings, you talk about grit
and resilience. You talk aboutbeing, or think about being, a
15 year old young man who hadany idea you'd have this

(46:41):
incredible career ahead of youif you could go back and give
that 15 year old the BIM colawole, any piece of advice? What
would it

be? There'll be two things. But in particular,
the first will be no fear. Nofear. Just lean in and do it.
You know, I am who I am today,but there were moments in my
career where sometimes you justdon't lean into, you don't grab
onto that opportunity, becauseyou're afraid of failing, right?
So I would say to myself, nofear. And the second would be,

(47:10):
travel more, yeah, all right,

yeah. That's great advice. Seeing the world
really, really important. Andthen the other part of it is
just not being afraid,recognizing, you know, just dive
in and you just have a life hasa way of putting the right
resources in front of you at theright time that you'll figure it
out, but you're gonna take alittle bit of risk, calculated
risk, but you have to take alittle bit of risk. So glad that
I took the risk in reaching outto you the year or two ago. BIM

(47:38):
just to start putting togetherthis time together, as our
audience now knows you have justthis incredible background that
your journey to the role, thatyou have, your philosophy around
risk mitigation, audit, yourrole in an amazing company like
Northwestern Mutual so sothankful that you took the time
to be with us.

Absolutely want to say thank you also, Matt and
to your audience members forlistening to me. I hope that the
items I shared today wereimpactful in some way, shape or
form, but also wanted to saythank you for all the things you
do. This is a wonderfulopportunity to be able to engage
the community, engage youraudience members leave some
great nuggets that people cantake and, you know, actionable
things, my thing is justwonderful what you and your team

(48:16):
does

well, I appreciate that. And when we're
on a journey to secure theAmerican Dream for the next
generation of STEM and workforcetalent like we are. It's amazing
the great people such asyourself that say, Wow, I want
to be a part of that. I'mwilling to take some time out of
an incredibly busy schedule andhelp send that message. Because
it's not our message, it's themessage of our guests, and it's
it's the folks in the audiencethat listen to that message and

(48:36):
then go out and work the magicin the classrooms and the labs
across America. So super, superhappy that we had this time
together with a BIM cola wole. Iknew he was going to be an
amazing, awesome guest, and hecertainly was. We covered a lot
of stuff. We'll link some stuffin the show notes. You know, we
have the best show notes in thebusiness. We'll put some
information about NorthwesternMutual and about a BIM in there.
Check those out when you'redone. Then go see us on social.

(49:00):
You can find us all over. We'reon Instagram, Facebook,
LinkedIn, Tiktok, wherever youconsume your social media, you
will find The TechEd Podcast. Bythe way, those show notes we'll
put at TechEd podcast.com/ I'llmake it easy on the audience.
We'll say a BIM. So TechEdpodcast.com/a B, I m is where
you'll find the show notes. Youwill find me right back here in

(49:22):
the studio of The TechEd Podcastnext week. Hope you'll join us.
Then thanks for being with usthis week. I'm Matt Kirkner, and
this is The TechEd Podcast. You.

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Rethinking Risk: How Strategic Guardrails Can Actually Empower Innovation - Abim Kolawole, Chief Audit Executive at Northwestern Mutual

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.css-14f5ked{margin:0;word-break:break-word;display:-webkit-box;-webkit-box-orient:vertical;box-orient:vertical;-webkit-line-clamp:2;overflow:hidden;}Rethinking Risk: How Strategic Guardrails Can Actually Empower Innovation - Abim Kolawole, Chief Audit Executive at Northwestern Mutual