Managing risk
Regardless of a company's stage of growth, the ability to identify and manage risk stands out as a vital element of success in the modern business world. Companies who wish to become market leaders must not fear risk, but embrace it and reap its rewards to accelerate their growth.
Because risk taking is a fact of life for an emerging enterprise, fledgling businesses must recognize and plan for the risks most critical to their short-term goals. Understanding and protecting intellectual property and protecting customer data are likely to be key risks at this stage. Exceptional Enterprises ensure that these risks are addressed, managed, and reviewed regularly.
Rapid growth enterprises have already built up a sound understanding of risk and the impact it has on their business. Knowing that change lies ahead, Exceptional Enterprises seek to identify processes to help them address the most significant financial, compliance, operational, and strategic risks. They also ensure that before taking on new ventures they fully understand the risks involved and develop approaches to mitigate these risks.
By the time a business is a next generation market leader, it needs to adopt a robust enterprise-wide risk management approach. This means dedicating significant resources to developing strong internal controls and processes to help ensure compliance with evolving regulations. Exceptional Enterprises will also invest senior executive resource to set the tone on risk management and to ensure that there is regular communication around business risk to their key stakeholders.
You can’t become a market leader unless you understand, manage and embrace your risks. As you move forward to market leadership, ask yourself:
- How do we identify and monitor the risks that are most important to our future success?
- Do we measure our team’s performance on managing the risks as much as managing the rewards?
- How are our stakeholders affected by the key business risks and are we communicating to them effectively?
The 2009 Ernst & Young business risk report
The top 10 risks for global business
Ernst & Young continues to be heavily engaged around the world in seeking to identify leading practices in the area of risk management. By aggregating the findings of our research in 11 sectors, we have produced a list of the 10 most important business risks across the sectors – concerns that will be common to the leading firms in many industries.
(pdf, 1.9mb).
