Imagine you're the firewatcher atop the watchtower for your businesses. In the universe of risk today, how do you know which risks to look out for when new threats constantly come to the fore, while others might need to be deprioritized?
Faced with clear and present challenges from an increasingly complex risk landscape, many medium and large organizations today are still playing a costly game of catch-up: The Marsh Risk Resilience Report found that only 24% of companies have a comprehensive process to anticipate emerging risks such as cyber risk and climate risk—two risks that could severely disrupt critical business value creation processes regardless of industry, sector or geography. Medium- and large-sized organizations typically have existing risk management processes in place, including the implementation of and maintaining risk scenario specific business continuity plans (BCPs).
When the global pandemic started, many organizations invoked and executed their business continuity plans. But when the crisis escalated and severely impacted the global supply chain, the shortcomings of scenario-specific BCPs and their inability to withstand a prolonged impact were revealed. The ongoing shortage of semiconductor devices that has affected businesses worldwide across multiple industries was in part precipitated by the global supply chain disruption.
In summary, many organizations that did not anticipate a worst case maximum probable loss scenario when developing and maintaining their business continuity and crisis response plans and programs. In turn, these organizations lacked integrated business continuity and crisis management plans that are agile, flexible, robust, and scalable—attributes that these plans must have in order to enable organizations to respond effectively to multiple known and unknown risk impacts over time.
Despite their best intentions, managers, and business leaders commonly report facing inertia and friction when driving comprehensive and enterprise-wide risk management frameworks that encompass integrated business continuity and crisis management programs. The list below are some of the common challenges encountered by medium- and large-sized organizations that can often lead to ineffective risk and crisis responses:
In a world when risks emerge faster than businesses can evolve and adapt, medium- and large-sized organizations need to resolve these challenges by taking a strategic and highly coordinated process-based approach to risk management and business continuity planning.