Organization risk is about the barriers, obstacles and hurdles that impede all types of organizations –
manufacturers, construction firms, school districts, not-for-profit groups, colleges and universities, and other- from achieving their strategic and operational objectives.
Some organizations have developed an enterprise risk management (ERM) program to proactively identify, categorize and prioritize the myriad of risks across the organization. Some have crisis management plans and disaster recovery programs in place to address instances when key functions of an organization are shut down. These programs are rooted in traditional risk identification and assessment that organizations have known about and planned for over time.
In recent years, however, organizations have had to be prepared not just for the “usual” risks – talent problems, supply chain disruption, cybersecurity – but also for new risks like those related to the COVID-19 pandemic, geopolitical disruption, inflation and the remote work environment. Risks impact organizations in a circular manner. For example, a business facing talent gaps and supply chain uncertainty will have a challenging time managing production, which in turn will affect sales, then its ability to attract the right talent to the company and finally its relationships with customers.
But risk are constantly evolving, even the definition of risk. How can an organization be confident it is agile enough to react to the unknown? It must plan for the black swan event, like the pandemic, and that is very different than establishing a traditional disaster recovery plan related to a flood or fire.
One of the best ways an organization can mitigate risk is by establishing a strong risk culture. This means that every employee – from the board and senior management to the newest intern – knows what the organization stands for and the boundaries within which they can operate.
TOP RISKS IDENTIFIED BY CLIENTS
• Cybersecurity events
• Supply chain gaps and delayed
• Environmental, social, and governance standards
• Black Swan Events