Risk management has become a far more widely discussed topic among organizations in a range of industries and regions throughout the past several years, and this is certainly a positive trend given the need for such conversation to sustain economic stability. Unfortunately, while there has been plenty of talk, action has not been the easiest to come by, and studies continue to indicate that the world's businesses are behind the eight ball when it comes to protecting their operations from destruction, disruption and loss.
Now, for context, it is worth noting that the small-business sector was the specific target of many studies between 2005 and 2010 regarding its ability to recover from a disaster quickly and maintain continuity regardless of what threats might arise. Since then, there have been clear and decisive improvements to the volume of smaller firms that have significantly improved their disaster recovery and business continuity plans, and you can chalk that up in the win column.
However, this is far from a situation defined by apple pie and ice cream, as so many organizations are still at risk of closing their doors forever should just one major adverse event take place, such as a hurricane, data breach, network outage or otherwise. Perhaps the most surprising point here is that the solutions necessary to effectively protect businesses from a proverbial universe of threats are readily available, affordable and easy-to-use.
Still, so many firms have yet to adopt them. If you would like a 10-minute overview of proper practices in recovery and continuity planning, check out this video from James Myers on the subject:
With all this in mind, it might be helpful to get a more thorough description of the challenges and concerns being felt among business leaders, advocacy groups, government officials and others around the globe. By understanding why a lack of recovery and continuity planning can be such a dangerous ordeal for organizations, leaders might be able to do a better job provisioning and managing the relevant solutions and frameworks for stronger resilience against disruption and outages.
...Nope. Insurance Journal recently reported that a new joint study from the Chartered Institute of Management Accountants and North Carolina University's Enterprise Risk Management Initiative found that, globally, companies are not in a good position to deal with threats today. Roughly 1,300 decision-makers from around the globe responded to the survey and participated in the research, and the results left a lot to be desired.
The source affirmed that roughly 65 percent of the group did not even have a strategy in place to fit ERM needs, which is a clear indication that something needs to give soon. According to the news provider, the authors of the report argued that the average leader does indeed need to pay attention to research such as this, and act in such a way that aligns with the best practices of recovery, continuity and general risk management.
"When we ask our members to list their current topics of focus, 'better risk management' is always near the top," CIMA head of research and development Gillian Lees told the source. "The wider business world needs to hear this call. As we near a decade from a global crash triggered by poor understanding of risks, it's depressing to see how little has changed. This is the equivalent of not bothering to lock your house after a burglary. Identifying possible threats to a business is essential for securing the firm's future. Adapting to future risks and changes can give a company a competitive advantage. Failing to do either means sleepwalking towards disaster."
One of the more telling aspects of this study was the fact that learning and development are simply not on the priority list for the average business. Insurance Journal cited the finding that only 20 percent of the respondents have put any money into risk management-related education for supervisors and decision-makers in their organizations, and this can only lead to poor performance in this category of business strategy.
"There needs to be a clear way for risk management information to be passed upwards to those leading the strategies of the business so they can increase the business' agility in navigating challenges that may impact strategic success," another study lead, Mark Beasley, explained to Insurance Journal. "Finally, boards need to wake up the challenge, either by establishing risk management committees or by appointing a board director responsible for this area to ensure they are adequately informed about key strategic risk information."
Business Insurance recently reported that Deloitte analysts have started to present the concept of strategic risk management to leaders, affirming that this might be the best approach to take when looking to really boost continuity. According to the source, this is somewhat defined as being a more offense-oriented approach to risk management, rather than always trying to defend, and could end up changing the tides in threat mitigation more thoroughly across the private sector.
"In the strategic risk domain, if you are really out there evaluating large and meaningful movements in the broader economy or in health care developments or technology developments, it may help you identify trends or impactful changes that can help you get ahead of your competition," Deloitte LLP National Insurance Advisory Leader Rich Godfrey mused to Business Insurance.
"Risk management basics need to precede advanced policies."
So as to not get too far ahead of ourselves here, business leaders might want to take a more traditional approach to risk management before they begin to embark upon more advanced and modern efforts. This is not to say that they should remain unprotected with antiquated strategies, but that standard risk management needs to be handled properly before strategic improvements can be created and deployed successfully.
For entrepreneurs, and especially those who are still new to running a company, the best option might be to seek out a partnership with a managed service provider that offers cloud services and continuity planning support. By getting expert guidance in these matters, the firm will be inherently better positioned to survive.