Companies, CEO’s, Employees, Shareholders all suffering because of poor risk management. Even in companies that claim to have a risk management process we see huge opportunities being missed. Typically, every six months, they fill in their risk register with what they are already doing, call the risk adequately mitigated, and put the register away for another six months. If they want to look professional they might even assign someone a few actions to take…. because after all no-one is perfect.
They generate some paper that might keep someone happy (in large companies that’s often the Board). They clutch a piece of paper and happily state – yes they have a risk management process.
But, what really changes in the risk profile of a company? We argue that at best, not much, and at worst, nothing.
We know this is true because we see so many company disasters. Take any month of any year, and we will show you at least a dozen businesses who have materially and reputationally suffered, needlessly. They fail to think of risk as dynamic and instead remain event driven.
The typical scenario plays out like this. The shock event happens. Then each impacted business function spends the initial response time chasing their tails once the crisis hits. They take incorrect initial actions, and follow up with bad public statements. Once they realise they’re making things worse they try to take the right actions, then make the right public statements. Finally, they atone to ‘learn their lessons’. Damage done!!
After an expensive review often costing millions of dollars in external review and advice and many hours of company time they decide that the lesson to learn is to do the opposite of what they did.
Overall this is a very painful, protracted and often complex process. It’s the cost of the issue plus the cost of an after- the- event fix, which is the financial cost plus the future impact on brand and reputation.
Let’s not forget the competitors. They will announce that they will also now change their processes, practices or procedures. Nice job, they have admitted they were as bad at managing risks as the other guy, but luckily haven’t had the downside.
Many of these disasters happen in companies who think they have inbuilt risk management or a Risk Management Process. The evidence says it’s usually not a very good one.
They have to learn a big lesson because they have missed all the small lessons along the way.
Sekana Group was created to help companies truly get on top of their risks, simply and cost effectively. We got tired of companies managing risk the wrong way, so we want to work with companies willing to understand that risk is managed by each and every employee along with joined up thinking and actions of their respective functions.
That’s why we have a cross-function focus complimented by a Human Capital Practice – we join the dots in your business, provide expertise and develop your teams. Joined up thinking, good risk leadership and good people equal a simple and effective solution to risk management and brand protection, with reputation protection integral to the solution.
We believe that getting ahead of the risks - and that means getting on top of the detail, and delivering against a simple set of solutions is the true low cost method over the long term and the only truly beneficial way of managing risk.
Whether you are currently a risk or senior manager, residing in the C-suite, Company owner or founder, shareholder or potential investor, or debt provider, if some or all of this article resonates with you, then you will undoubtedly benefit from our Shock-proofing exercise.