4 Strategies You Should Revisit Now
Going back just a few years, could you imagine then that a worldwide pandemic would soon change our lives and how we conduct business forever? Many didn’t, but some did. Some businesses thrived in spite of and even because of the Covid-19 pandemic, while many are still reeling or have crashed from the whirlwind.
This unstable situation is again happening right now with the war in Ukraine. Some global businesses weren’t prepared for this situation to affect them, but it has hit home and likely has also, without forethought or speedy resilience, meant lost revenue. Big disasters like this are rooted in a failure to imagine— failure to imagine what seems impossible but still could happen, even if beyond our wildest dreams.
The risk is always there, so the best we can do is recognize the potential, prepare for it, and then manage it.
But how can a business manage unimaginable future risk, especially during current times of crisis?
Let’s look at the strategies in risk management during crisis situations (as broken down by Zelek, 2003) and why and how you should right now revisit and reevaluate the economic risks that could harm your global company or investments. Reform Strategy This is where ‘sometimes you win and sometimes you learn’ has real meaning.
This is the last option for businesses that either were not adequately prepared or did not react urgently. This is of course what you want to avoid, but it is an option that must be considered in advance, especially in times of global volatility.
In these times of crises, such as the ongoing pandemic and the war in Ukraine, businesses need to adjust to current risks and still safeguard against potential future disasters. Gartner, in March of this year, released advice for Enterprise Risk Management (ERM) leaders to “reassess their organizational risk models, [and] also ensure a high frequency of communication with the C-Suite as to the critical changes that require attention now.”
As soon as possible, all risks should be reevaluated by your Board of Directors and yourself as the business owner and revisited quarterly. The imagination cannot fail in risk management because the consequences can be dire— business-ending and worse— since not only livelihoods but also lives are at stake. Contributing factors to the costs of risk and uncertainty are errors in situation assessment, fear of loss, or misallocation of resources (Williams et al., 2002).
You can’t fully prepare for whatever the world throws at you and your business, but your risk management team can plan, mitigate, and provide the extraordinary care needed so that you can keep your business on track. Over a century ago, in his book, The Economic Theory of Risk and Insurance, Willet (1901) recognized a rule that, in business, the probability of loss occurrence goes hand-in-hand with the uncertainty in the end result.
In other words, what you can’t see will likely hurt you. Don’t let your enterprise be blindsided. Set up an appointment with your risk management team now to better prepare and protect your company’s interests in today’s and tomorrow’s world.