Navigating Risk in a Changing Landscape

In an increasingly interconnected world, organizations face many risks from political, economic, and technological factors. The risk landscape is evolving at an accelerated pace, with once-improbable threats now becoming the norm. To stay relevant and agile, businesses must adapt and develop dynamic strategies that address these challenges head-on. To gain a deeper understanding of how organizations can better prepare for these risks, PwC, in collaboration with Business Today, hosted an insightful discussion with industry leaders. The panel consisted of Vinit Teredesai, CFO of LTIMindtree, and Sivarama Krishnan, Partner and Leader of Risk Consulting at PwC India.

Evolution of the Risk Landscape

The discussion began with a reflection on how the risk landscape has evolved. Sivarama Krishnan highlighted five significant changes that have impacted risk management. First, supply chain and operational risks have come to the forefront due to disruptions caused by events such as the pandemic, the Suez Canal blockage, and the Ukraine conflict. Second, the rapid pace of technological advancements has introduced new technology risks. Third, changing employee preferences and the need for organizational adaptability have created people-related risks. Fourth, the intertwining of business with geopolitical factors necessitates its inclusion in risk management strategies. Lastly, the CEO survey conducted by PwC revealed that technology change is disrupting businesses, although many organizations feel unprepared to address it.

Adapting to Technological Disruption

Vinit Teredesai emphasized the significant role of technology in shaping businesses' response to the pandemic. Organizations quickly realized the need to reimagine their business models and embrace digitization and technology. Previously overlooked technological solutions, such as end-to-end airport technology or mobile keys for hotels, suddenly became crucial for business survival. The pandemic prompted businesses to leverage technology to deliver products and services directly to customers, resulting in a massive shift in operations. Additionally, cloud technology, despite its economic challenges, became an essential tool for organizations to drive return on investment and benefit from operational efficiency.

Seizing Opportunities Amidst Risks

The discussion turned to how organizations can seize opportunities amidst risks. Sivarama Krishnan stressed the importance of viewing risks as opportunities for growth. Companies that adopt this mindset have succeeded and flourished. The panel highlighted the significance of organizational culture, technology adoption, and effective communication in transforming risk into opportunities. Organizations can capitalize on risks and drive growth by creating a culture that encourages expansion and innovation, leveraging technology, and fostering open communication.

Challenges for MSMEs and Startups

The discussion also addressed the challenges faced by MSMEs and startups in managing risks. The panel acknowledged that while startups have a high innovation quotient, they may have limited risk-taking abilities. Collaboration between startups and established companies was seen as an opportunity for growth, where startups can bring fresh ideas and agility to established enterprises. The panel encouraged MSMEs to shift from an individualistic mindset to an ecosystem approach, leveraging technology and embracing innovation to succeed.

Managing Risks in a Changing Environment

As the conversation drew to a close, the panel acknowledged that managing risks involves striking a balance between seizing opportunities and avoiding overreaction. They stressed the importance of perceiving risks as opportunities rather than threats. Organizations need to focus on doing the right thing and being prepared for the early warning signs of potential risks. Ultimately, risk-taking is inherent in human and business progress, and when managed effectively, risks can lead to significant opportunities.

Conclusion

The discussion highlighted the evolving nature of the risk landscape and the need for organizations to adapt their strategies accordingly. By embracing technology, fostering a culture of innovation, and perceiving risks as opportunities, businesses can navigate the challenges they face. The insights shared by industry leaders shed light on the importance of dynamic risk management and the potential for growth even amidst uncertainty. In this changing environment, organizations must be agile, proactive, and open to collaboration to de-risk their future and thrive in the face of emerging challenges.