Uncertainty is and always has been the issue of contention for risk managers. But the degree and range of global uncertainty faced by organizations around the world is truly unprecedented. Events that have occurred since the 2001 terrorist attacks point to levels and areas of risk many had never before imagined. Natural disasters, acts of terror, corporate governance scandals, the dot-com collapse, the housing bubble burst—events like these and the uncertainty they have injected into the world have caused organizations to place a greater and broader emphasis on risk management.
Emerging risks—both new risks and familiar risks in unfamiliar conditions—have taken on new meaning and importance in today’s increasingly uncertain world. As the unimaginable global impact of events such as the euro crisis, the subprime mortgage crisis, the tsunami in Japan, the Arab spring uprisings, Hurricane Sandy, flooding in Thailand, and other events caused damage beyond what could have been predicted, emerging risks have earned the attention of executives and board members in corporations around the world. … Continue reading
Headlines this time of year tend to center on predictions for the coming year and reflections on the year past. An unprecedented number of risks face managers in the year ahead, yet one theme prevails in our minds as defining the challenge for risk managers in 2013: Uncertainty.
Uncertainty is the new normal.
Companies face a rapid rate of change across all dimensions of business, and risks that many never imagined have entered the realm of possibility for organizations. It would be difficult for any company to have predicted or planned for the truly global impacts of such seemingly ‘local’ events including the euro crisis, the subprime mortgage crisis, the tsunami in Japan, the Arab spring uprisings, Hurricane Sandy, flooding in Thailand… and the list goes on.
In today’s hyper-connected world, the damage caused by even “small” problems can far exceed expectations.
A recent Fortune magazine article focused on the issue of uncertainty as it relates to policymaking, and labeled uncertainty as “business’s real problem.” The author explains that uncertainty creates a pattern of “paralysis” in which policymakers put decision-making on hold and business leaders are left without a predictable set of rules by which to make decisions.
Indeed, unnerving might be a better label for the environment we face.