Strategic risks come in all shapes and sizes. Sometimes companies are at risk of digital disruption, while other times they will face the unforeseen impacts of their existing strategies.
While these risks are common to just about every industry, there are still a range of possibilities for companies to avoid the risks that come from these challenges. As the range of potential risks increase, business leaders will need to ensure they are setting up their companies for future success.
A 2012 report from Deloitte gives some insight into how companies are managing the process of strategic risk. Among the companies surveyed, 52 per cent are increasing the budget for monitoring and managing the risks associated with these changes.
While increasing funding is one starting point, companies are also pursuing continual management and tracking of these risks. In fact, 43 per cent of those surveyed have taken the time to constantly manage strategic risks, while 38 per cent are assigning greater resources at the executive level to manage risks.
To help executives and other stakeholders understand the risks that come with corporate strategy, many companies are also turning to business management software and other tools that can help them get the most out of their operations. These systems give a much greater level of detail for managers, offering further oversight for potential risks that might arise.
Many companies are also trying to raise internal awareness of strategic risks, with a majority establishing their own definition of the strategic risks they face. In Asia-Pacific, Deloitte found that 71 per cent of firms have taken the time to define strategic risk, compared to a global level of only 66 per cent.
As companies devote greater resources to addressing the challenges of corporate strategy, it is more important than ever for executives to invest in these systems to manage their business interests.