Risk and Business Continuity - Managing for the unknown

Do you have the right team in place to face a future filled with Unknown Risks?

While the perilous unknown may be the stuff of sci-fi and doomsday movies, the potential for more mundane or fiscal danger is always around us.

This should not provoke paranoia but rather a healthy sense of vigilance as well as skepticism. Executives need to be vigilant about what could happen next. By all means consider pandemics, earthquakes and wars, but also be skeptical about their effects on their organisations.

For example, if financial executives had been more vigilant and skeptical prior to the fiscal meltdown of 2008 some businesses may not have found their institutions so over-leveraged.

Clearly, we say this from the moral high ground of Hindsight, which is always 20/20.

So what is a savvy executive to do? Three questions come to mind.

What is the worst that could happen to us?
This question prompts many scenarios from a natural disaster to a market crash, or even the entry of a significant new competitor who changes the balance in the market place. What happens then? Executives need to keep their antennae up and do their Risk Assessments and sound Business Continuity Planning.

How would we react?
Very often companies do have BC or disaster plans but are they robust and up to date? Do they stipulate what happens when resources are not available or executives and employees are separated from each other?

Do we have the right people in place to recover?
This is perhaps the most important question. Very often members of a leadership team are equipped to manage when the going is good, but what happens when the bad gets into fear and panic?

The senior leader must ask if these people have the right mindset to adapt to evolving and changing circumstances.

Flexibility becomes an imperative, but so too does resilience. You need leaders who can cope with setback and maintain the discipline to persevere.

Big questions provoke big picture thinking. Very often such questions will cause real unease, or at least a sense of disruption and that is healthy.

If a catastrophe strikes disruption will be significant. So what will you do to survive?