Risk and Resilience

A recent survey of executives by the Federation of European Risk Management Associations (FERMA) revealed that pre-pandemic, the focus of risk management was on a small, well-defined number of risks, mostly financial. The pandemic has expanded the mandate of risk management to include resiliency management. It is woven into long-term strategy development at top organizations, helping companies navigate a far more dynamic operating environment. A majority of respondents admit that the global pandemic has made risk and resilience more important to their organizations. McKinsey, which assisted with the survey, lists steps toward sustainable resilience in the article referenced above, among them: Measure resilience and start to report it internally; Pick your disruptions — resilience agendas built around generic disruptions or overly specific scenarios are rarely useful. Instead, choose a particular type of disruption to start with, then probe it deeply for expected initial impact and longer-term secondary and tertiary effects; Risk functions need to move beyond the formal views of administration, control, and governance, as well as the formal processes for risk assessment. Find a way to replace these structures, integrating their constituent activities into strategy.