The ability to adapt to sudden, unexpected change is especially valuable in these days of COVID-19 – and risk management plays an integral role.
Before the pandemic hit, many organizations were reluctant to move away from the from their tried-and-true way of managing risks one by one, department by department. After all, why fix what isn’t broken? While there may have been room for improvement, a good portion of the issues seemed negligible, so it was often easier just to live with them.
For many, that approach worked just fine – until the coronavirus crisis upended the world.
The Downfall of Traditional Risk Management
Faced with the pandemic’s fast-moving, interconnected risks, organizations everywhere were left scrambling to deal with operational and financial difficulties they never contemplated, let alone planned or practiced for. Companies that could not get their hands on complete, timely, and accurate data were at an immediate disadvantage – with often grave consequences. If you don’t have all the facts, action becomes nothing more than a shot in the dark.
The crisis may have sounded the alarm, but the glaring weaknesses revealed in the way risk and compliance are traditionally managed will not magically disappear when the coronavirus eventually runs its course. Even outside of crisis, today’s risk landscape is more crowded and uncertain than ever – and virtually every risk is gaining in velocity and ferocity. It’s difficult, if not impossible, to assess your true exposure with the fragmented view provided by old-school risk management techniques. And if you can’t see what’s coming, how can you possibly get in front of it?
The Rise of Integrated Risk Management
Our always-connected world demands a similarly connected approach to risk management. To survive in a world dominated by social media, mobile devices, and relentless scrutiny by everyone inside and outside the organization, senior leaders need to rely on an increasing number of stakeholders to identify, manage, and reduce risk together.
Stakeholders across the organization need to be able to freely exchange data and ideas to proactively address accelerated and amplified risks. And all that intelligence needs to be available in real time to top decision-makers, who must continually make hard strategic choices to drive organizational success.