In 2020 COVID did hit society. After a standstill society and businesses adapted rapidly and for example hybrid working became the new normal (although many organizations are still struggling to find a balance.).
Once we had COVID under control voices did arise that the roaring 20's would arrive , a period of positivism. Nobody (at least normal citizens) imagined what would happen on the geo-political front in 2022 and definitely at what scale. I believed that too.
A recent report of the World Economic forum outlines more uncertainty in the coming decade. Definitely a report that one should read as background information. Uncertainty will increase the coming decade on different levels : technology (and i believe a lot more will happen than what is described in the document) , environmental, geo-political, societal,...
I became very well aware of this during a recent trip to Iceland where somebody explained me of the volcanic activity and the impact of climate changes. The question was not if an eruption would happen but when and a number of major vulcanos are today dormant.
Preapare pro-actively : embed this in the multi-year plan
To prepare for increased uncertainties such as global and local risks, companies can take several steps:
- Assess the potential impact of risks on the company's operations and financial performance. Do this annually as part of the multi-year plan
- Develop risk management strategies to mitigate potential negative effects, such as diversifying supply chains and implementing disaster recovery plans.
- Regularly review and update the company's risk management plan to stay informed of new risks and changes in existing risks. Use external info as a basis and useful frameworks such as : exposure to risk x impact can provide a ranking
- Have a strong and resilient talent management strategy, that can help in attracting and retaining key talent, and also have a strong succession plan in place.
- Stay informed about geopolitical developments that may affect the company's operations and be prepared to adapt to changes in regulations and trade policies.
- Invest in technology and digitization to increase the company's competitiveness and adaptability to changing market conditions, which will help to identify new opportunities and stay ahead of the curve.
- Mindset : Foster a culture of innovation and encourage employees to think creatively about ways to mitigate risks and capitalize on new opportunities. I personally am a big believer of : In every challenge lies an opportunity
Strategy communication : regularly with stakeholders, including employees, customers, and shareholders, to keep them informed about the company's risk management efforts and any potential impacts on the business.
Technology as an answer to many of the challenges.
Many believe (also in politics) that answers to many challenges lie in enforcing behavioral change through legislation and fiscal instruments. I'm however more a believer that many challenges could be answered by embracing technology and pushing it to the limit (see how fast we could develop new treatments and vaccins with covid) and this by preference pro-active in stead of reactive.
enjoy reading the report!