Watch Out! Emerging risks around the corner!
Organisations that are risk resilient continuously look out for early warning signals
Imagine coming across a road-safety sign while driving that states: “Slippery when wet”. The signage is alerting us to potential driving-related incidents that might arise should wet road conditions prevail. The same applies in our organisations – we should continuously watch out for signs of emerging risks.
These risks could be spread out in different spheres of any business. However, should the emerging risks materialise, what kinds of questions should one ask?
As risk practitioners we need to pay more attention to those risks that could be imminent. Quality practitioners may recall one of the famous Dr Deming’s 14 Points: “Drive out fear, so that everyone may work effectively for the company”.
Wouldn’t it be appropriate to apply the same mindset when we assess the fear of the unknown? Navigating into an environment of emerging risks requires different perspectives. Let us look at some of them.
Understand the business environment
I have always believed that at some point all risks could be characterised either as “emerging” or as “unlikely to happen”. Risk practitioners need to pay attention to those drivers that are changing the way we work. The business environment is not constant, it is always changing. It is likely some of these potential disruptive changes may not be spotted.
Pay attention to that which is “unlikely to happen”
It is a reality that risks rated “unlikely to happen” tend to be dismissed. There is less interest in allocating resources or getting top management to keep them under surveillance.
However, taking our focus off emerging or potential risks makes risk management frameworks “like trying to find a needle in a haystack”.
PricewaterhouseCoopers states: “The speed and impact of these risks are further exacerbated by their interdependence on other risks, which requires a profound understanding not only of the underlying risk factors, but also of other events that may be triggered.”
Do not neglect early warning signals
Organisations that are risk resilient continuously look out for early warning signals. Look out for scenarios where some colleagues make statements such as: “I have been working in this environment for a long time and nothing has ever happened.” This should be a wake-up call. Hence, it is important to constantly identify potential opportunities that will minimise the impact should emerging risks materialise.
When managing risk, one needs to keep asking the question: What if? There is no doubt that emerging risks pose significant challenges to any organisation. The Allianz Risk Barometer Top Business Risks 2017 affords us the opportunity to pay attention to those risks that are likely to be of ongoing concern for any business.
It is also good to remember the statement by former United States President John F Kennedy: “Change is the law of life, and those who look only to the past are certain to miss the future.”
Hope Mugagga Kiwekete is a managing consultant at the Centre for Enterprise Sustainability. He has practiced as a management systems consultant, trainer and auditor in different multicultural environments, which entailed environmental, occupational health and safety and quality management in various industry sectors in east and southern Africa and Asia. He is a Certified ISO 9001 Lead Auditor with the Southern African Auditors Training Certification Authority (SAATCA) and a member of the SABS Technical Committees for Quality Assurance, Environmental Management and Occupational Health and Safety Management Systems.