There is This Moment When Risks Move From Concept to Reality

You know these. The team saw early signs of smoke but still fell back to waiting for the flames. A sense of surprise, a sense of inevitability, and then a sense of extreme urgency — even panic. Tiger teams, rapid-fire financial assessments, pulling critical resources away from their core work, high emotion that creates the “fog of war” sense, and coffee — lots of coffee.

This may be inevitable when a singular black swan event happens, but with an isolated disruption the organization can often snap back in place. But what happens when it’s a potential flock of black swans — a collection of diverse and dynamic risks that create persistent uncertainty and financial risk?

It’s Time to Get Proactive

There is real and often untapped value in taking a thoughtful step back to consider risks, both broad and specific, to address those that are reasonably in your control and develop warning alarms for those that aren’t.

Addressing risks may mean developing clear mitigation strategies and plans, but it should also mean making current operations more robust, resilient, and agile right now — when you can be more methodical.

Tactically, this could be things like evaluating true capacity and working capital needs so that you can free them up now. In a more strategic way, it could be strengthening or reinvigorating your SIOP process.

The further out this process focuses on, and tighter the linkage between your market sensing in Sales is with your supply sensing from Operations, the more likely and effectively you will be able to avoid or mitigate risk going forward.

How Can We Help You Prepare?

As we write this, we’re not sure the world has instantly changed, so we need a new way to look at things. Instead, we see this more as recognizing that this constant wave of disruption isn’t changing. We all need to more formally adapt to a world in which disruption is normal and proactive risk management is critical.

Reach out to us to learn more about how we model risk, integrate those outcomes into your core financial decision-making, and put in motion methodical, proactive operational improvement to free up working capital and increase resiliency. Also, stay tuned for our upcoming SIOP series that explores new maturity models and more.