The value of prediction in business planning
The value of a prediction is not accuracy. The value of prediction and scenario planning is the reasoning and conversation that the prediction catalyzes. And let’s recognize that predictions can also be self-fulfilling prophecies. And of course, predictions are more fun when you’re correct. However, it’s likely more illuminating to revisit your predictions that turned out with time to be incorrect. One of the main reasons for this is that we often project our internal nature and desires, as much as we predict, tainting our perception of the future with our own hopes and fears. Reviewing predictions, whether they were right or wrong, provides insight into ourselves. The International Risk Podcast speaks with internationally renowned specialists in their particular fields about the predictions they made that saved them on multiple levels, and the predictions that went horribly wrong. Resolving critical events and crisis is a core part of every leader’s role, and our guests have many great stories to share with you so you can learn from their experience. And, hopefully, have a laugh in the process.
With Covid vaccines being distributed in most countries, and consumer confidence indicating a likely return to leisure travel in Q2 of 2021, and business travel internationally in Q2 and Q3 of 2021, we can start to look forward to shaping their futures rather than just grinding through the present. The next normal is going to be different. It will not mean going back to the conditions that prevailed in 2019. As consumer confidence returns this year, so will spending, with increased growth in many sectors as pent-up demand is unleashed. That has been the experience of all previous economic downturns and despite the deepness of the current economic decline, this coming rebound is likely to follow a similar pattern. One difference, however, is that services have been particularly hard hit this time. The bounce back will therefore likely emphasize those businesses, particularly the ones that have a communal element, such as restaurants and entertainment venues. Have you and your company considered how the risks associated with this boom will be felt around the world?
Expansion and associated risks
In 2021, most companies will be keen to expand, or at least to regain the position they had at the start of 2020. Good leaders will be employing a variety of lines of operation to do this, and one will be to remove unnecessary friction and cost. One of the largest frictions for many companies is governance, compliance, and risk. The tremendous growth is digitization, meaning everything from online customer service to remote working to supply-chain reinvention to the use of artificial intelligence and machine learning to improve operations has brought with it wonderful advances, but a quick look below the surface shows that many companies have not properly considered the risks of creating or adopting these new technologies or practices. There is no going back on these fantastic advances, and these new forms of working, producing, and growing will be sustained and increase – and so too must our risk processes.
Governance, compliance, and risk
Being compliant is more important and requires more expertise as overlapping regulatory regimes extend their reach across multiple sectors. Turning compliance into a competitive advantage and not just a bureaucratic duty is the role of all leaders. We are under no illusion how significant good governance and compliance can be, and hard it can be for senior leaders to have the certainty that your organisation meeting all the applicable regulatory standards. A common message from many guests on The International Risk Podcast is that security, risk, and compliance specialists need to have their voice heard among the many competing interests that influence corporate decision making. If you are a specialist or mid-level manager wondering how you can get your voice heard, listen to some of the successful strategies our guests have employed. And if you are an executive leader, listen in for how you should be engaging people within your organisation for success.
We spoke in a previous article about being aware of second and third order effects. We also spoke about the example of working from home. Risks are not all negative – they are simply a disruption, and some disruptions are good. Let’s go back to the working from home example. A first order effect is that more staff are working from home these days and less staff are working from the office. Second and third order effects include that massive mobilization of one trillion-dollars of capital from commercial real estate to residential real estate. The capital and time we once committed to offices and commuting will pour into home improvement. The carpet that looked sad and old pre-pandemic is now intolerable, and your TV is not complete without a high tech home stereo. We have already seen that plywood costs and many residential real estate market prices have hit all-time highs. So many second and third order effects are predictable, or at least identifiable with proper scenario planning. Have you conducted similar planning on how your supply chains and global partnerships may be shifting in this new environment? What about their suppliers and their partners? What risks and exposure do they have that could eventually impact your activities. It is profoundly disruptive and potentially traumatic when something happens that strikes at the nervous system of an organisation. Employees, shareholders and stakeholders are all affected. And this is particularly unnerving when the event was predictable and potentially avoidable if the second and third order events had been considered during business continuity planning.
Business continuity planning and crisis management
Business continuity and crisis management programs create the systems and training that foster organised and adaptive responses. These combined with dynamic analysis of political, economic, technological and social events and trends and robust information governance equip you with the architecture of resilience. There is no one-size-fits-all approach when it comes to security or risk. That is why The International Risk Podcast has such a diverse range of guests every week, so that you can hear and learn from different experts, in different industries, in different countries, about how they have approached enterprise and operational security within their organisations. Understanding how our guests have allocated resources where they are most needed and avoided security, risk, and compliance from becoming a series of technical silos. We know that risk tking is essential for success, and that is why we share our secrets with you so you can thrive.
Come and join us for our conversations to learn how our experts have used preparation and readiness as the foundation for their most successful responses – and even when preparation didn’t remove the risk altogether – their successful recovery strategies. Whatever the situation, our host and guests have experienced it – kidnapping, war, ebola, cholera, fraud, theft, deaths and murders. Our guests are industry leaders, crisis management and security consultants, investigators, accountants, cyber experts, lawyers, and problem solvers. When your organisation and its people find themselves either caught up in a serious security or risk incident, your duty-of-care credentials are put to the ultimate test. Listen to our conversations to hear how they worked through some of their biggest security and risk challenges. Whether you face a subtle shift in your operating environment or a significant event, the essence of resilience is responding in a way that protects value and ensures long-term, competitive advantage.
Read more about how to manage risk and security with the Security Information Incident Handbook here