In an age of digital transformation, CEOs are helping their companies take risks that enable innovation, speed and new value-creation.
CEOs today have an unenviable job. In addition to architecting strategies to make their companies future-ready – while responding to today’s extreme technology disruptions – they are having to deal with increasing cost pressures, changing customer expectations and geopolitical turmoil. The ability to balance this duality of purpose – making the business more competitive while keeping it out of trouble – is indeed critical to gaining competitive advantage in an age of digital transformation.
EY teams approach to risk management, Trust by Design (TxD), suggests a practical approach to achieving this balance. Instead of just viewing risk through a loss-prevention lens, it offers upside, downside and outside perspectives on risk. In doing so, it helps enable an upfront infusion of risk-thinking into strategic and operational processes, as opposed to bolt-on initiatives that are typically reactive and remedial in nature. This proactive and deliberate approach to designing risk-strategy has the potential to support greater stakeholder confidence and trust.
The TxD approach also aligns with the views of leaders in the recent EY CEO Imperative Study. CEOs, boards and investors from around the world participated in this study and shared their thoughts on global challenges that would impact organizations over the next 5 to 10 years.
Among the various global challenges, leaders rated technology induced job loss as one of the major risks to the global economy and business growth. Income inequality, ethics of AI, cybersecurity and climate change together made it to the top-five list. The survey also provided insights into how organizations are dealing with various upside, downside and outside risks.