In the business world, navigating uncertainty requires a proactive approach. Explore these five strategies that leaders use to identify potential threats and stay ahead of the curve.
|
March 29, 2024 INSIDE THIS ARTICLE, YOU'LL FIND: |
The global landscape feels more uncertain than ever. Wars in Ukraine and the Middle East, ongoing supply chain disruptions, and tensions between world powers are just a few examples of the constant, unexpected hurdles businesses navigate today.
While it's impossible to predict the future with absolute certainty, successful businesses don't simply wait and react: They identify emerging risks and develop strategies to mitigate their impact. This proactive approach is the cornerstone of business resilience, allowing you to navigate these uncertain times and seize opportunities for growth.
The challenge, however, lies in identifying those threats that haven't emerged yet. Though the war in Ukraine unfolded on the world stage, its impact on businesses around the world — through increased inflation, cybersecurity concerns, and inventory shortages — was hardly clear when the war started. Today, many other emerging risks simmer beneath the surface, their potential impact unclear. How do you identify these emerging risks, and limit their impact on your organization?
The Cost of Ignoring Emerging Risks
The inability to identify or act on emerging risks can have serious repercussions for an organization. While business risks — new technology, competition, or shifts in consumer sentiment — impact the bottom line, security risks and geopolitical issues can impact everything from profit margins to your personnel’s ability to operate or even their safety.
For example, the COVID-19 pandemic upended supply chains, labor, and virtually every other aspect of running a business, but also put individual workers at risk if the business was not able to move to protect them quickly enough. The war in Ukraine has impacted businesses around the world due to supply shocks, inflation, and shifts in consumer spending, not to mention led to the deaths and displacement of many who were previously living and working in Ukraine. As the war continues with no end in sight, the crisis will only deepen and impact the global economy and individual businesses further.
The impact that risks and their repercussions have on businesses can extend beyond financial losses. Businesses that fail to address emerging risks like data breaches or environmental concerns can suffer significant reputational damage. An organization that fails in its capacity to fulfill its duty of care obligations will find hiring and maintaining a dedicated workforce more difficult.
By proactively identifying potential threats, businesses can navigate these complexities. They can explore alternative suppliers, diversify their markets, and implement robust crisis management plans. This proactive approach safeguards not only the bottom line but also the company's people and image, fostering trust and resilience in the face of unforeseen challenges.
Proactive Strategies for Identifying Emerging Risks
In the business world, navigating uncertainty requires a proactive approach. There are several strategies and methods that leaders can use to identify potential threats and stay ahead of the curve.
1. Leverage tested frameworks
To effectively identify emerging risks, businesses can leverage frameworks. These frameworks are structured tools and methods that help systematically analyze the complex and ever-changing business landscape. Think of them as roadmaps that guide you through a process of considering various factors that might influence your business. By following these frameworks, you can gain valuable insights and uncover potential threats before they become major disruptions.
Two examples of these frameworks include the SWOT analysis and the PESTLE analysis.
A SWOT (Strengths, Weaknesses, Opportunities, Threats) analysis delves into your company's internal strengths and weaknesses, while also considering external opportunities and threats. By understanding your vulnerabilities, you can assess how emerging security risks might exploit them. For instance, a SWOT analysis might reveal a company's reliance on a single supplier as a vulnerability. A trade war or political instability in that supplier's country could disrupt operations, highlighting the need for diversification.
A PESTLE analysis examines six key external factors that can significantly impact your business: political, economic, social, technological, legal, and environmental concerns. For example, a business that has operations which are susceptible to hurricanes, floods, and earthquakes must understand how these environmental disasters could impact their operations. Companies need to have backup plans and disaster recovery protocols in place as a result.
2. Scan the horizon
While PESTLE and SWOT analyses provide valuable insights into current trends and internal capabilities, what about threats brewing in the distance? Corporate leaders will find consistent “horizon scanning” beneficial to their long-term planning.
Horizon scanning is a proactive technique for identifying early signs of potential change. It involves systematically gathering information from a wide range of sources to detect emerging trends, technological advancements, or social shifts that could significantly impact your business in the future.
Here's why horizon scanning is crucial:
- Early warning system: It allows you to anticipate potential disruptions before they become mainstream, giving you a head start in developing mitigation strategies or seizing new opportunities.
- Broader perspective: Horizon scanning encourages you to look beyond your immediate industry and consider global trends impacting various sectors. This holistic view can help you identify seemingly unrelated threats that might have a domino effect on your business.
When seeking resources for horizon scanning, consider Global Guardian’s Worldwide Threat Assessment. Our annual report highlights geopolitical developments and emerging risks — from a quarantine of Taiwan, to disrupted shipping lanes, to living in the age of nuclear blackmail — with a focus on how they will shape safety and security concerns for global businesses and international travelers over the next 12 to 36 months.
3. Engage a range perspectives
A company solely focused on its domestic market may fail to consider the potential impact of shifting global trade policies. This scenario highlights the limitations of a narrow perspective. When it comes to identifying emerging risks, fostering a culture of varied, diverse perspectives within your organization is crucial: Teams solve problems faster when they are more cognitively diverse, studies show.
A group comprised of individuals with varied backgrounds, experiences, and skillsets – such as leaders and contributors from HR, finance, security, and other teams – will bring a wider range of knowledge and viewpoints to the table. An array of different thinkers is a powerful tool for uncovering blind spots and potential threats that might be missed by a homogenous group. When team members challenge assumptions and share unique perspectives, a more comprehensive understanding of the risk landscape emerges. This allows your business to proactively address potential disruptions and seize opportunities before they unfold.
4. Cultivate a risk-aware culture
A strong defense against emerging risks isn't built solely by leadership. The key lies in fostering a risk-aware culture throughout your entire organization. This means creating an environment where open communication is encouraged, and employees feel empowered to report potential threats they encounter in their day-to-day work.
Imagine a scenario where a marketing intern, scrolling through comments on a recent company Facebook post, notices a comment claiming to be from your organization's "customer support team." Phishing and other scams have become increasingly sophisticated, and all it takes is one click by a customer on a misleading post to damage them and lose their trust. In a risk-aware culture where reporting is encouraged, this intern will have the confidence to voice their concern and report the details to the IT security team, so you can nip a potential cyberattack in the bud. This open communication system transforms employees into your company's frontline risk detectors, allowing for early identification and proactive mitigation of potential security breaches.
Ultimately, a risk-aware culture fosters better-informed decision-making as leadership considers concerns from all angles, leading to a more vigilant and adaptable organization prepared to navigate the ever-changing landscape of business threats.
5. Seek external expertise
When seeking to identify risks, consulting with industry experts or risk management consultants can provide invaluable insights and expertise. These professionals stay abreast of the latest trends and threats specific to your industry, offering a fresh perspective and specialized tools for uncovering potential risks you might miss internally. Their guidance can be instrumental in developing robust risk management plans and ensuring your organization remains prepared for the unforeseen.
Consider partnering with a global security and risk management specialist like Global Guardian. Their team of experts possesses a deep understanding of emerging threats across various industries and geographic regions. Global Guardian offers a comprehensive suite of services, including horizon scanning, travel security risk assessments, real-time intelligence monitoring, and business resiliency planning. By leveraging their expertise, you can gain a broader perspective on potential risks and develop effective mitigation strategies to safeguard your business, employees, and assets on a global scale.
Next Steps: Develop a Risk Management Plan
Proactive risk identification is just the first step. To truly safeguard your business, you need a plan to address the identified threats. A well-defined risk management plan outlines strategies for mitigating potential damage, allocating resources for response efforts, and establishing clear communication protocols.
By having a plan in place, your organization can respond to emerging risks swiftly and effectively, minimizing disruptions and ensuring business continuity. Don't wait for a crisis to strike.
In today's dynamic business landscape, staying ahead of the curve is paramount. By proactively identifying and mitigating emerging risks, you can ensure your business remains resilient, adaptable, and ready to seize opportunities in the face of an ever-changing world.
Standing by to Support
The Global Guardian team is standing by to support your duty of care and security requirements with a comprehensive suite of solutions. To learn more about how our team can support your team, complete the form below or call us at + 1 (703) 566-9463.
