Hiding in plain sight - the risks of sticking with 'business as usual'

Every year, I’m fascinated to read the World Economic Forum’s Global Risk Report and find out what global business leaders, economists, scientists and policymakers see as the critical threats to our society and economy. The 2021 report highlights the top 3 risks by likelihood as extreme weather, climate action failure, and human environmental damage.

From a business perspective, we need to be aware of these ‘big picture’ threats, together with other, perhaps more obscure risks. Not recognising and planning for potential threats means we leave ourselves open to disruption, under-performance, and possible failure. As the saying goes, failing to plan is planning to fail.

‘As-is’ is a recipe for a shipwreck

Leadership expert Steve Denning, writing in Forbes (Ten Reasons Why Risk Management Increases Risk), believes too many people associate risk management with new business opportunities, such as innovation and acquisition. They work on the assumption that the existing business is risk-free, able to continue indefinitely ‘as-is’. But Denning warns us that “as-is is a recipe for a shipwreck”, because, (as we are finding), most firms live in a VUCA world – volatile, uncertain, complex and ambiguous.

We know people struggle to find time to think about external issues, and let’s face it, lots of the news on geopolitics, climate, plastics and damage to nature can be depressing. So it is easy to feel disconnected from big-picture trends and issues, and hope they won’t affect your business. But that’s a risky approach!

Instead, thinking about risks, and deciding if, and how badly they might affect your business, can help you decide what to change, or what to keep an eye on. In an earlier job, I looked after risk management for major projects. I’m cautious by nature, so I relished looking at the future, from inside and outside the organisation, and working out what might disrupt our plans.

Our research shows that organisations in every sector face a variety of risks associated with ‘business as usual’ (the ‘linear’ economy), and the Circular Economy Podcast show-notes on ‘linear risks’ (Episode 2) is one of our most-visited webpages.