Risk Management In Times Of Chaos. How To Survive It All?
If someone would tell you a year ago, that in a few months you will have to operate in a ‘new normal’ and new world that we have never seen before? Would you believe? Were you prepared or were your business operations ready for unexpected? Probably not, no one was or could be prepared for a coronavirus pandemic that lasts for almost a year now and we do not see the end of it.
Let us spend a moment and think why some companies despite the circumstances are still successful and some struggled at least during early months of Covid-19? Why some seemed to be ‘prepared’ and some seemed to be surprised? Here is the answer, despite the business you are in, and I know some like restaurants, gyms, bars, movie theatrescould not be prepared and would not be able to do anything because of government regulations, but any other company could do a lot… your answer is – have a well-developed risk management process in your company in place. Those that had formal risk management process developed across the company, were prepare and could react quickly. By experience, I know that even if some companies had no formal enterprise risk management in place, but had functional risk management processes in place, could survive and be prepared very quickly.
Why it is so important? Why am spending time on trying to convince you here? It is because I know that as soon as you had risk management in place, you were doing well. Businesses that were faced by Covid-19 side effects, but had healthy risk management process in place, were able to perform very quick risk assessments and current analysis of a situation and properly address it. Fact is, no one could be prepared but if you were able to react quickly, you prepared mitigating plans and you addressed newly immersed risks, you were good to go and you are a survivor.
Covid-19 happened and threatened everyone, but wherever risk management function existed and played 2nd line of defense function, it was easier to be prepared and get your operating plans back on track or at least adjusted. Knowing how to reduce new risks we were facing,was a key to future success. Remember, that we have never had a situation, when all of the sudden we have new immersed risks of remote work, new cyber threats on the horizon, new data privacy challenges, resilience questions for your key service partners, project delays and project re-prioritization and many, many more.
Last not least, it is never too late to start working on a design and development of your risk management function in your enterprise. Efforts will pay off, sooner or later you will be thankful that there is someone who can accurately assess your risk appetite, mitigate, or reduce risk to acceptable level. Coronavirus pandemic is a fact, it caused chaos and many unexpected events, but having properly developed risk function will help you to be prepared for unexpected. Your business operations have a chance not just to ‘survive’ but be even faster than ever before.
What I have learnt myself, being responsible among many others for cyber and IT risk management function, is that as Jon Kobat-Zinn said: you can’t stop the waves, but you can learn how to surf. How accurate this meaning today is… no matter what you do, if you adjust quickly, if you are flexible, creative, and fast, you survive, and the waves will get you far. It is a metaphor, but extremely accurate today.
Having well developed risk management function, will help you not only improve your operations and mitigate newly immersed risks, but also optimize, make risk management process effective and accelerate your operations going forward. Of course, keep in mind that by just having risk management in place, there is no guarantee you will be successful. What you must have in place isan efficient,effective,and ongoing risk management process in place that supports business decisions, is a driver of development and a real business partner vs. an obstacle.
In the next normal, we must realize that risk management is an ongoing process, risk management will support every business decision, if you use it wisely. Be prepared, your effective, agile risk management process supported by the leadershipmight be a real differentiator for your enterprisegoing forward. Organizations that will successfully navigate through those unexpected times, will grow and be stronger than ever before. As Rajiv Jain said: Be always prepared to face the unexpected because it is your ability to deal with the circumstances that determines your capability