The New Era of Risk Management: answers to the present

By: Sérgio Resende
In: The New Era of Risk Management: answers to the present.
2022, March 23

If in recent decades the evolution of the competitive environment has created a greater demand for organizations, which led to a new paradigm of risk management and its unavoidable role, the last few years have contributed to the occurrence of extreme scenarios that confirm the importance of organizations to manage their risks in a structuring and integrated manner.

 

On the one hand, the pandemic conditioned business activity and even completely paralyzed entire sectors, on the other hand, when the end of the pandemic was envisaged, behold, the crisis of raw materials and a war conflict in the European continent arises. at the gates of the European Union. And in the midst of the impact of these events, how do organizations react or should react?

Risk Management will not work as a “magic wand” that will make these and other events disappear, nor their impact on the activities of organizations. However, this has evolved to respond, in particular, to events that jeopardize the objectives and performance of organizations. Undoubtedly, whether through mechanisms of contingency plans at the level of Business Continuity, at the level of distaster recovery plans, or even at the level of mechanisms integrated into the operations and management and performance control systems, risk management will provide a strategic support in th

 

The expectation will not be of miracles, because the risk will never be zero. However, the difference between having or not having risk management mechanisms can make all the difference. Let us recall the recent case of Vodafone: if there was no contingency plan, instead of 24 hours to go back from the 90s to the year 2022, what are the expected events and impacts?

 

And those who speak in a context of business interruption/reactivation, speak in day-to-day management: what is the impact on the daily activities of organizations, of random, dispersed and diverse events, such as the volatility of the price of materials, services, products? What is the impact on a business of circulation and marketing constraints in international markets? What is the impact on a business of the social and political instability that crosses a global competitive environment?

 

Risk Management will undoubtedly have a key role in supporting organizations. Above all, a new paradigm is proposed: moving from a reactive management to a proactive and integrated management, which allows the continuous control of the organization’s performance. We may not prevent nefarious events from happening, but we can be prepared to face them.

 

The ability resulting from Risk Management will undoubtedly be the difference between a resilient, successful business, with a future ahead of it, and a business whose future is a daily unknown.