One of the biggest downside risks in the car rental business lies in the assets themselves sitting idle. Traditional car companies manage this risk by renting in daily increments, even if the customer only needs a car for a couple of hours. Zipcar identified the upside risk in that idling capacity ― pricing its offerings to encourage more people to switch from taxis.
At first, it may seem too risky for the board but using a strong and structured risk management approach ― and getting the right data to make informed decisions ― can open new opportunities.
Leading organizations today are taking a real-time read of their key risks with the help of data analytics and artificial intelligence. With a big dataset of all potential risks, and live access across an entire organization, leaders can spot trends quickly and make decisions on the back of real data, rather than through guess work and gut feel.
One of our large clients deployed a governance, risk and compliance platform to help manage workplace health and safety. And with that foundation established, the company can apply the same approach to a host of other risks ― regulation to cybersecurity to modern slavery ― as well as to help manage upside risks.
Understanding that risks can come from every angle ― upside and downside, inside and outside ― can help you to make the right decisions.
Risk management isn’t about stopping bad things from happening, it’s about building trust. And building effective risk management into new business models, products and services, so that the right decisions can be made, is how organizations can create trust by design. And with that trust comes growth. Trust is the bedrock on which value is created ― because it’s only through trust that we build the confidence of stakeholders and the confidence to seize transformative opportunities.