The Imperative of Risk Intelligence for Future Business Viability
October 18, 2023
The PwC 26th Annual Global CEO Survey reveals that a significant number of CEOs, nearly 40%, fear their companies may not be economically viable in a decade if they continue on their current trajectory. The primary concerns include changing customer preferences, regulatory changes, skills shortages, technology disruptions, and competition from new entrants, according to Risk Management Magazine. Companies are advised to focus on risk intelligence to navigate this uncertain landscape.
Immediate actions involve optimizing existing resources for cost reduction and efficiency. In the intermediate term, companies should anticipate changes in energy supply, pricing, and customer behavior. Long-term planning includes reconsidering business operations, such as physical sites, technology adoption, and global sourcing.
Flexibility is highlighted as crucial for survival. Dr. Elizabeth Moore warns against rigid organizational rules, emphasizing the need for flexible internal systems. Financial services and technology sectors, more aware of their offerings’ limited appeal, are considered more prepared for disruption.
Risk intelligence plays a pivotal role in decision-making. Improved data collection, interpretation, and understanding of non-financial risks are vital. Better data quality, automation, and real-time information access are recommended to facilitate effective decision-making.
The survey underscores the volatile business landscape, urging companies to proactively reinvent themselves, prioritize risk intelligence, and consider talent and staffing risks. Building stronger relationships with stakeholders is seen as essential. CEOs must understand stakeholder expectations, explain their value propositions carefully, and address concerns about climate risk, sustainability, and ethics. In conclusion, the focus on risk intelligence emerges as a critical element for businesses to navigate uncertainties and thrive in the evolving global economy.
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