Sign in or 
Share this
Opportunity and risk management
Uncertainty and turmoil rule; and will do for quite some time. But despite the crises, there will still be opportunities out there, but companies will need to work harder and with a keener eye on the future than ever if they are to win through. Examining the options, thinking through the implications, looking for win:wins, and being fast and flexible, are even more important in the bad times than in the good times.
The recent U.S bailout package by Congress is not the end of the global crisis. It may get the U.S money markets moving again, but a recession is likely despite the actions of many countries around the world to stabilize confidence. Many companies and consumers are feeling the pressure; surviving today feels like the only game in town. And it is unclear as to whether the actions which governments and national banks have taken will work.
Parallels and precedents
The economies of the world are likely to come out of the other side of the crisis very different than when they entered: new regulations, new rules, new priorities – and new opportunities. The bursting of the Dot.com bubble in the late nineties provides a parallel and precedent to the current crisis that we can learn from:
Pressure on resources is creating opportunities for innovation and new products, such as processes to reduce water consumption, technologies to scavenge energy, reducing energy consumption in data centers, collaborating with customers to find new solutions, using waste as a feedstock for biofuels. But to make these happen, a sense of direction and vision from management are essential. So, too, are looking beyond the immediate crisis to see what opportunities may be out there; being able to prioritize them, and developing the flexibility to take advantage of them while staying in touch with stakeholders’ needs all the while.
As the graph below shows profitable innovation begins early in the cycle of change as the number of people with desires for change (degree of public awareness) grows. Organisations who can spot stickiness and turning points early are at a considerable advantage to those who come later.
Management response
The question for management is whether they want to be like an ostrich and ignore the options; a rabbit transfixed in the headlights of the approaching crisis or a bird ever watchful and making the most of the few updrafts that are around, and grasping the opportunities as they arise.
Smart organizations look to learn from the past and simultaneously learn from the future by creating a forward-thinking culture whether the times are good, bad, or awful.
In times of great uncertainty management has to better prepare for dealing with surprises at all times. If seemingly robust strategies and decisions have a higher propensity for failure, then risk assessment becomes a key execution tool to manage surprise.
Best practice organizations endeavour to:
Further Reference: It's No Time To Forget About Innovation
Next: Imagining the Future Back: Strategic Leadership To: Shaping Tomorrow
Copyright: Some rights reserved. This work is licensed under a Creative Commons License.
The recent U.S bailout package by Congress is not the end of the global crisis. It may get the U.S money markets moving again, but a recession is likely despite the actions of many countries around the world to stabilize confidence. Many companies and consumers are feeling the pressure; surviving today feels like the only game in town. And it is unclear as to whether the actions which governments and national banks have taken will work.
Parallels and precedents
The economies of the world are likely to come out of the other side of the crisis very different than when they entered: new regulations, new rules, new priorities – and new opportunities. The bursting of the Dot.com bubble in the late nineties provides a parallel and precedent to the current crisis that we can learn from:
- The companies that went to the wall during the bubble were those whose business models were fundamentally flawed: a race for egotistical growth, profligate spending and low concentration on inherent risk, inappropriate capitalization, and shareholder returns.
- Many companies, affected by, but not critically wounded, waited out the storm by cutting vital investment and jobs, intending to begin again after the storm passed. Most never did!
- The smart companies, many that we all now know as household names, protected and even enhanced their investments, ensured they kept their team together, and swept up great people and assets displaced from less forward-thinking and weaker organizations.
Pressure on resources is creating opportunities for innovation and new products, such as processes to reduce water consumption, technologies to scavenge energy, reducing energy consumption in data centers, collaborating with customers to find new solutions, using waste as a feedstock for biofuels. But to make these happen, a sense of direction and vision from management are essential. So, too, are looking beyond the immediate crisis to see what opportunities may be out there; being able to prioritize them, and developing the flexibility to take advantage of them while staying in touch with stakeholders’ needs all the while.
As the graph below shows profitable innovation begins early in the cycle of change as the number of people with desires for change (degree of public awareness) grows. Organisations who can spot stickiness and turning points early are at a considerable advantage to those who come later.
Management response
The question for management is whether they want to be like an ostrich and ignore the options; a rabbit transfixed in the headlights of the approaching crisis or a bird ever watchful and making the most of the few updrafts that are around, and grasping the opportunities as they arise.
Smart organizations look to learn from the past and simultaneously learn from the future by creating a forward-thinking culture whether the times are good, bad, or awful.
In times of great uncertainty management has to better prepare for dealing with surprises at all times. If seemingly robust strategies and decisions have a higher propensity for failure, then risk assessment becomes a key execution tool to manage surprise.
Best practice organizations endeavour to:
- make risk assessment a key organization-wide tool and insure their business through investment in threat assessment and control.
- determine potential disruptive and potential "wild card" scenarios and plan for their arrival, thus breaking their mental models and challenging industry paradigms.
- develop scenarios and choose their strategy from a range of risk-assessed options.
- choose strategies that are exciting, challenging, and achieving, but which do not bet the business on a whim.
- encourage diversity of thought and creative problem solving.
- recognize that their strategy is only valid if it is grounded in tomorrow and not cast in stone.
Further Reference: It's No Time To Forget About Innovation
Next: Imagining the Future Back: Strategic Leadership To: Shaping Tomorrow
Copyright: Some rights reserved. This work is licensed under a Creative Commons License.
thryller |
Latest page update: made by thryller
, Jul 13 2009, 5:28 AM EDT
(about this update
About This Update
Edited by thryller
1 word added view changes - complete history) |
|
Keyword tags:
None
More Info: links to this page
|
There are no threads for this page.
Be the first to start a new thread.
