The Changing Face of Risk
During the last five years, companies around the world have become much more interested in investing in their risk management capabilities, according to a report published by management consulting company Accenture. Moreover, these capabilities are being developed in line with business' growth strategies to help businesses compete more effectively and more efficiently.
Why the increased interest in risk management? The ever-changing shape of the world marketplace is a primary driver. Businesses know that to remain profitable, they need to increase their activity globally, and that means far greater exposure to a far wider range of risks than ever before. What's more, as businesses grow and operations expand their own borders, the need for a coordinated risk management approach becomes essential. And of course, being active in the electronic space -- whether through a company's own corporate website or through interaction on social sites -- means exposure to an entirely different set of risks like fraud and espionage which are only now beginning to be truly appreciated.
But there's something more: Today's businesses are embracing greater risks than they were a few years ago when the economy was topsy-turvy. Instead of being reactive when it comes to risk, companies are becoming proactive, the report notes. Now, risk is viewed more as a potential opportunity for growth -- a "competitive advantage," according to the report -- and businesses are balancing those opportunities by establishing strong risk management programs both to evaluate risks and to prevent reckless behaviors that could put the company in jeopardy. Managed properly, risk can enable companies to move into new markets more quickly and more successfully, and they can also provide the impetus for undertaking new, profitable ventures.
This new view of risk management as a driver of strategic planning means businesses need to implement strategies that are responsive and flexible to enable them to evolve as the marketplaces shifts. The bottom line: If you want to remain competitive in the markets of tomorrow, you need to invest in a risk management plan that's firmly aligned with your business' goals and needs to ensure a strong and profitable future.