The COVID-19 pandemic has caused global disruption while testing every organization’s financial and operational resilience. With the pandemic as the backdrop, organizations are now operating in new ways, making decisions to protect their assets and adapting to the evolving environment. Furthermore, being resilient to adversity is the only way to boost employee morale and achieve business success. So, how do you become a resilient organization? In this article at Forbes, Matt Kunkel explains how enterprise risk management (ERM) is fundamental in building a resilient organization.
What is Organizational Resilience?
According to Gartner, organizational resilience is “the ability of an organization to resist, absorb, recover, and adapt to business disruption in an ever-changing and increasingly complex environment to enable it to deliver its objectives, and rebound and prosper.” As businesses face threats from pandemics, climate change, and cybercrime, organizational resilience is now critical for enterprises.
ERM’s Relation to Resilience
ERM allows management to identify, prioritize, and mitigate all the risks that can adversely impact organizational goals. Having an ERM strategy in place will enable enterprises to stay a step ahead of risks that threaten their current and future operations. Preparedness is a crucial part of becoming resilient. This is because sustaining business operations is the ultimate goal in times of adversity.
How to Build an ERM Plan
Organizations must define their business objectives and then identify the risks associated with them. Broad strategies for risk identification include conducting risk management workshops, brainstorming with teams, analyzing industry-specific reports, and reviewing past risk-related observations.
Remember, operational resilience and risk management require long-term thinking. For instance, the COVID-19 pandemic was difficult to predict. Organizations had to establish work-from-home policies and set expectations around communication without in-person meetings.
Furthermore, the World Economic Forum’s Global Risk Report 2020 revealed that environmental risk poses the biggest threat to businesses. Business leaders must thoroughly understand the risks around climate change to ensure that their organization is prepared to withstand disruption. To truly lead a resilient organization, leaders must make resilience a unified effort across the company.
To read the original article, click on https://www.forbes.com/sites/forbestechcouncil/2021/04/30/why-enterprise-risk-management-is-key-to-organizational-resilience/?sh=765d13653bea.