Changing the way we see risk with resilience by design

Sam Samaratunga - Global Head of Risk, PwC United Kingdom

It has been said that we are living through the riskiest time to do business in recent memory. You only have to glance at the news to see geopolitical crises, increasing cyber attacks and the ongoing impact of a two year pandemic - and the related supply chain disruption. So yes, undoubtedly we are facing a significant level of risk. But the difference now is the speed of change, interplay between these different risks, and the huge global and local ramifications in our ever increasingly connected world.

We recently published our Global Risk Survey and unsurprisingly geopolitical, market and cyber risk all came out as top concerns from the 3500+ participants. If I’m honest I’d have expected to see people risk and climate risk feature more highly, but that’s not to say the others are unexpected - they're high on my list too. This is because of the knock on effects in terms of demands for products and services, disruption to the flow of goods and impacts on employee wellbeing. When I think about the potential personal, organisational and societal impacts of these risks, they are huge and interconnected, spanning the full breadth of business’ operations, stakeholders and - importantly - the core of our reputation.

So how do you anticipate or manage these risks?

Well risk management is a team sport.

Risk is not one person’s or function’s responsibility. It requires an interconnected community of experts, all working together to build an agile and efficient response to a world of changing risk.

I’ve spoken before about rowing together to make the boat go faster, and the same applies here. In taking risks seriously and doing this proactively, you can ensure your organisation is risk aware, prepared and transparent - indeed resilient by design.

There are three ways that you can do this:

Engage early and get risk insights at the point of decision

Organisations need to adapt so that real-time risk insights and analysis can support informed decision making by stakeholders right across the organisation. Risk management capabilities must be agile and operate in a way that reflects the organisation’s changing risk profile. Our survey shows that organisations recognise the importance of this: nearly 80% say keeping up with the speed of digital and other transformations is a significant risk management challenge.

Take a panoramic view of risk

Managing risk isn’t about responding to change, it’s about changing the way we see it. Risks are interrelated - so looking too narrowly at risks means you may not see the full picture. Sometimes it’s about accepting risk and redefining it as an opportunity where the organisation has the resilience to withstand this. This is about shifting perspective, considering every angle, building resilience.

Understand risk appetite to see the upside risk

Organisations must understand their risk appetite to take advantage of opportunities. Good risk management is not just about avoiding and reducing risk. It’s also about taking risks with eyes open - in an informed way. Business leaders saw opportunities to thrive in the face of disruption during the pandemic. They began to question their business model and ways of working and they engineered changes for the long term which were accompanied by risk. Risk and return are inextricably linked. An organisation’s risk management capabilities can create significant value if they help the organisation take advantage of the upside of risks that bring with them a higher payoff.

In becoming more proactive in preparing for and adapting to risks, you become more resilient. Armed with the right insight, you can mitigate and prepare for whatever change is ahead. We have to acknowledge that disruption will always exist. But if you’re able to maintain business critical services and protect key assets in the face of change, you’ll have a strategic advantage and be better placed to respond to disruption in a seamless, coordinated manner. I guarantee you’ll be pleasantly surprised by the returns.

The full results of our Global Risk Survey 2022 can be found on our PwC website.

And this is our 10-point Agenda for Action to help organisations rethink risk.

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Sam Samaratunga

Sam Samaratunga

Head of Risk, PwC United Kingdom

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