How to Position Your Business for Success
With recession looming and fears of inflation and financial crisis dominating global boardrooms, how can leaders make better decisions and position their business for success?
1. Build enterprise resilience
Leaders who fail to prepare for BI risks may underestimate the complexities of returning to business as usual, which can take months and involve significant costs. It is also easy to overlook “grey swan” or long-tailed risks, which are rare and difficult to predict. As shown by the COVID-19 pandemic however, leaders had the most success when they acknowledged the seriousness of grey swan events, fostered a culture of agility, and invested in contingency planning and testing.
Confident leaders know that now is not the time to put the brakes on capital investments or lose sight of long-tailed risks such as rising social inequality, cryptocurrency, and disruptions to the market. With the business landscape in a state of flux for the foreseeable future, building enterprise resilience is quickly becoming a key competitive advantage.
2. Manage and transfer risk
No longer the sole responsibility of the risk management department, managing risk — quantifying it, conducting assessments, and limiting it — has become an enterprise-wide issue. Protecting the balance sheet from a wider range of BI risks requires business unit leaders to anticipate loss scenarios, review their exposures, and identify potential overreliance on critical customers, partners, and supply chains.
Risk management solutions and analytical tools can go a long way to provide key data for planning purposes, but confident leaders understand the value of engaging external consultants to help improve their risk management practices. In fact, our analysis finds that very prepared leaders are nearly twice as likely to say they value the counsel of an external advisor in improving their company’s ability to make good decisions and deal with risk.
Equipped with data-driven insights, businesses can acquire specialized BI coverage that is tailored to its short- and long-term strategy. Companies with especially complex business models can mix, combine, and align the following risk transfer options:
- Traditional BI coverage for loss of revenue or profit at the affected location
- Interdependency BI coverage to cover knock-on internal effects within the organization, both at the affected location and at other locations
- CBI coverage for impact on revenue or profits resulting from a covered event that has impacted a third-party supplier or customer
- Ancillary or additional coverage for increased costs or inability to enter the business premises due to a covered event
3. Embrace risk
Despite the challenging risk landscape, the most innovative leaders are the ones identifying opportunities alongside the threats. As many as 90 percent of well-prepared leaders are equipped to address risk. It is not just a question of survival, but an opportunity to introduce new strategies, bring change to the sector, and open doors to future growth.
For more information on BI risks, download our full 2022 Executive Risk Survey Report.
