Disruption and new technologies mean new risks. Is your organization ready to manage them?
The transformative age is increasing the complexity of organizational ecosystems at a speed never before seen. New digital technologies are driving an intense focus on developing disruptive new business models, creating new experiences, utilizing contingent and mobile workforces, and blurring traditional industry boundaries. It’s not only the pace of change, but the underlying approach to change, and our increasing reliance on being connected — whether it’s to data, interfaces, people, virtual communities or experiences.
Fully harnessing and converting this disruption into business value doesn’t just mean changing one part of your business. It means transforming the way you understand your value chain from end to end — from your suppliers’ suppliers to your customers’ customers. It means rethinking your ecosystem, changing your business model and looking beyond traditional sector silos.
But to thrive in this rapidly changing environment also demands a new way of managing risk. Because along with the opportunities of finding better ways of working is a risk landscape that is expanding at an unprecedented rate.
Every business should ask itself these questions:
- How is our risk function engaging with the board and C-suite to provide strategic insights to maximize value?
- Is our risk culture evolving from complete risk avoidance to making confident strategic moves?
- Do we have a good understanding and management strategy across risk categories — downside, upside and outside?
- Are we continuously scanning the risk landscape and responding? Is our risk mitigation approach shifting from reactive to predictive response strategies?
- Is our risk function disrupting itself along with the organization’s digital transformation? Do we have the right culture, skill sets, technologies, data, structures and ecosystem partners for the future?
Thriving in the transformative age
The most successful organizations of this era of rapid change will have a relentless focus and fundamental belief in their purpose, culture, values and principles. They will have the ability to identify, incorporate and utilize best practices from both internal and external sources to facilitate the development and delivery of the highest-value products and services. To do so, they need to understand the need to manage emerging downside risks to sustain trust while balancing the need to embrace upside risks with confidence and continuously evaluating outside risks.
The mindset of digital disruption is not one of threat, but of opportunity, one of embracing volatility with confidence. This is why ensuring your risk function is fit for the future is such a vital part of thriving and delivering value in the transformative age.
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Peter Katko – Global Digital Law Leader
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