How to Manage Risk in Turbulent Times

The Annual Meeting of The World Economic Forum in Davos, Switzerland in January 2023 brought together some 2,700 global leaders from Governments, Businesses, and Civil Society to examine risks and share solutions under the banner “Co-operation in a fragmented world”.

Attention was drawn to the major shift in international political, economic, and social relationships following the COVID-19 pandemic; along with the global economic crisis, growing populations, geopolitical conflicts, energy supplies, food security and climate change, and the risks all of these bring.

Reportedly, the most used phrase on everyone’s lips at Davos this year was ‘Polycrisis’.

By definition, a problem becomes a crisis when it challenges our ability to cope and thus threatens our identity. Canadian research centre The Cascade Institute describes a global Polycrisis as being ‘when crises occur in multiple global systems and become entangled in ways that significantly degrade humanity’s prospects’.

Research* looks at Leadership in Polycrisis – and the solutions required for business leaders to futureproof their businesses and industries.

Five ways to futureproof your business

Noting that much of what puts businesses at risk cannot be foreseen, Jennifer Palmer, Forbes Finance Council, suggests highlighting some key points when planning to minimise potential threats. These include:

1. Listen to your customers – honestly evaluate your business through the eyes of your customers to determine which customer pain points you can address now and how these might change in the future.
2. Figure out what tomorrow’s workforce wants – the pandemic showed workers craving more flexibility and meaning in their jobs. What Gen-Z wants in an employer is very different from what past generations wanted – so hold on to good employees.
3. Be agile – agility means building a culture and leadership with an ingrained sense of responsiveness and the wherewithal to act in uncertain and ambiguous environments.
4. Harness the power of technology – can you use tech in your HR function to assist in recruiting talent? Can you use AI and machine learning to better develop that talent and support employees?
5. Fund for rainy days – preparing for growth and downturns can help strengthen your company. A ‘rainy day’ approach will enable you to remain nimble and deal with market changes.

Look global, act local

“Geopolitical, cybersecurity, and energy risks are prominent, as well as climate change and the difficulties created by the pandemic. There are these challenges, but there are also highly intelligent people with a lot of experience, willingness, and preparedness to manage this and transform. States, companies, and individual stakeholders are becoming more aware of this and are working together on ways to address these challenges. I am optimistic about the future.” – Angela Westdorf, Managing Partner Germany

Signium’s research reviews various countries, regions, and sectors to give an assessment of global risks business leaders are facing now and will likely be challenged with for the foreseeable future.

Futureproofing business must take the key factors noted by Angela Westdorf into account by ensuring the current C-Suite is equipped to deal with issues as they stand now, while equipping upcoming C-Suite candidates with a people strategy that engages them and embeds resilience.

Three key ways to empower teams with resilient leadership are:

Create leadership ‘followship’

Where leaders are a source of confidence and inspiration for their teams, they are more likely to follow and be motivated when dealt the unexpected. Develop competency programs that promote servant leadership so that teams now and in the future feel part of something bigger than themselves alone .

Focus on employee engagement

According to Gallup.com, the “behaviours of highly engaged business units result in 21% greater profitability”. Employees who feel engaged generally feel inspired too, and engaging employees delivers profitability, productivity and employee retention.

Always Learning

When businesses need to be agile, so do their teams in order to adapt to new demands and the skills needed to service them. By creating workplaces where individuals can self-manage their development, they can be more nimble and effective.

Signium’s deep-dive into sector risks and mitigation gives business leaders invaluable insight into what is happening in the world today and its impact on various sectors including financial services, consumer, industrial, and life sciences.

Each new insight can be the cornerstone of your company’s futureproofing strategy. From the financial sector with its focus on digital banking, cyber risk and the issue of interconnectedness; to the consumer sector with topics relating to engagement, behaviour and rising costs; Signium’s research provides answers as well as pertinent questions.

Albert Einstein suggested that asking questions should not be about getting answers, but rather about solving problems. Business leaders looking for the agility to face what may (or may not) happen in the future are undeniably those who are asking the right questions now.

In a world where “Polycrisis” is now common language, the most effective leaders will be asking questions and seeking solutions to problems both real and imagined. Many predictions made by heads of corporations about “trends in 2020” were stymied by the unimaginable – but taking steps to futureproof businesses now will not be effort wasted.

https://www.signium.com/news/leadership-in-polycrisis-navigating-risk-in-turbulent-times

*Research by Signium

 

Originally published on The HR Director: https://www.thehrdirector.com/features/leadership/manage-risk-turbulent-times/