Large companies that operate globally are now rethinking the way they manage significant risks, whether those risks are operational or financial in nature or whether they stem from weak strategic planning. They are not concerned so much about their well-honed processes for procuring and sourcing components, commodities, assembly, administrative services, etc. Rather, they worry about atypical risks that seem to be pooling into a critical mass.
Atypical risks stem from rapidly increasing globalization, which is now turning the spotlight on social and political risks of government instability, corruption, worrisome child labor practices, lax regulation of manufacturing quality processes, poor access to qualified managerial talent in emerging markets, anti-corporate sentiment, terrorism, environmental pollution, and aggressive IT hacking cabals that target government and enterprise communication systems. Those are just the highlights. Surely, there are more atypical risks on the worry list.
Without a comprehensive understanding of how these complex risks can emerge, inter-relate and magnify a negative incident, decision makers may overlook the need to talk candidly about atypical risks when strategic growth plans are first put up on the drawing boards. Moreover, they may not be prepared to systematically predict, quantify, prioritize, monitor, and mitigate such risks and respond if or when necessary.
APQC has just published a research report that illustrates how leading organizations are addressing both typical and atypical risks using well-designed Enterprise Risk Management (ERM) processes. Click here for a preview of APQC's Effectively Managing Risk across the Enterprise best practices report.