Tackling your emerging risks

David FitzGerald: What would happen if a major economy crashed tomorrow? Or if a deadly new disease broke out? Would your organisation be ready to respond? Or would it be caught out by something it didn’t see coming?   

We refer to threats like these as emerging risks. They are risks that are completely new to an organisation or previously known risks that re-emerge in an unfamiliar context. 

Fiona Fennon: Trying to stay one step ahead of novel emerging risks is, by their nature, really difficult. When faced with the unexpected, people tend to look inwards, try to control what they can, and don’t look at the bigger picture. This is panic.  

When you scale this behaviour up to even a modest-sized company, the results are disastrous. There is no coordinated response, no knowledge sharing, and everyone is pulling in different directions. 

David FitzGerald: So how do you prevent panic and put your organisation in a place where it can implement a measured, coordinated response to emerging risks?  

Well, there are three steps that you can start with: 

First - scenario plan all possibilities. Consider as many events as possible that could seriously harm your organisation. Look outside your business for scenarios that could happen both locally and globally. Also, make sure to turn that lens inward, on things like strategic decisions you’ve made that could come back to bite you. 

Fiona Fennon: Second - establish early warning indicators that could alert you to an emerging risk becoming a reality. These could come from hard metrics such as your own share price or credit spread. But consider more novel sources too, like sentiment analysis on social media about your organisation and ongoing world events. 

And third - build playbooks to guide you through uncertainty. With them, you’ll know what decisions need to be made, and in what order. You’ll know who needs to be in the room to make the big decisions. Most importantly, you’ll have a head-start on a coordinated response – minimising your fallout and maximising your opportunities. 

David FitzGerald: No-one can know for certain what the future holds. But that’s no excuse for being unprepared when the worst does happen.  

If you think your organisation would benefit from stronger defences against emerging risks, visit our de-risking risk webpage to learn how we can help you build them.