The international environment remains persistently volatile and full of reasons why some people may justify inaction or bunkering down, but as we learned during the Covid pandemic – survival alone is not the best strategy. Growth is possible, and in many instances more readily available during challenging times. The international risks are significant, and coming with greater velocity, impact, and likelihood. As recently explained in this article about international risk, there are many global trends that business leaders need to be monitoring. And this is why the most successful companies are investing in appropriate risk management activities in order to protect them whilst they more aggressively pursue opportunities and growth.
How to mitigate the international risks?
When we analyze companies with the most significant growth in the first half of 2022, we see one thing in common:
- They are recruiting more international risk professionals in house or partnering with international risk consultancy companies.
- They are increasing their insurance cover after conducting comprehensive analysis of their insurance programs and how risks can be outsources.
- They are investing in people and systems to ensure they are well placed to monitor the horizon for risks and opportunities.
- They recognise that the best crisis management is crisis prevention. Crisis prevention programs are inexpensive, increase organisational agility, and contribute to staff confidence and retention.
With energy prices likely to remain elevated for the medium to long-term, climate change remaining a persistent risk, a volatile future, we must be able to turn risk into opportunity. If you are involved in operational governance and risk (hint: we all are), then spending time – or recruiting someone who can – on crisis prevention and risk management is a cost saving, and usually income generating activity.
Geopolitical uncertainty and inflation remain the main risks demanding political and business attention. Both are complex risks, continually evolving, and here for the foreseeable future. Nearly all businesses are facing the risk of increasing operating costs, and have – or will – increase the prices of their services and products. Understanding how the geopolitical and inflationary pressures are going to evolve are crucial for business leaders who want their companies to succeed. Persistent negativity when forecasting has been the norm since Q2 of 2022, and many managers expect the global economy and international risk environment to decline further in late 2022 and 2023.