ME B2B Summit 2019: Business Risk Management and How to Prepare a Resilient Organization

ME B2B Summit 2019: Business Risk Management and How to Prepare a Resilient Organization

In the VUCA (Volatile, Uncertain, Complex and Ambiguous) world, companies need to be increasingly attentive to the management of their corporate risks.

Increasing complexity in supply chains, increasing market volatility, cybersecurity threats and political uncertainty are just a few examples of what organizations are exposed to today.

And that's what it was about Priscila Miguel, coordinator do FGV-CELog (FGV-SP), spoke in ME B2B Summit 2019.

If you went to the event and watched the talk, read it and remember. And if you didn't have the chance to go, check out the main insights now.

 

What is risk management?

What is risk management?

Employee risks is a series of targeted activities that aim to manage and control a company in relation to potential threats, regardless of their origins. This includes everything from planning and use of human resources to materials acquired to prevent or treat a risk.

It is a management method to act preventively, anticipating potential problems and taking action before they even occur. However, there is also the possibility that a risk that has not yet been mapped may manifest itself.

In this case, another way of acting comes into play, the prescriptive method.

 

The prescriptive method

The prescriptive method seeks to encourage the company to behave dynamically, aiming for reactive action in the face of events.

For this to happen, it is necessary to have a control system for all relevant numbers and causes that encompass the organization.

The ultimate idea behind all of this is the continuous improvement of the company's processes in order to enhance business.

 

4 steps to efficient risk management

4 steps to efficient risk management

For good planning to be done, there are 4 fundamental steps. They are:

1- Identify

To map risks, it is necessary to know the entire company. It is necessary to understand the weaknesses and vulnerabilities of the business. It is necessary to know what stage the company is in, whether it is maturing, in a growth, expansion or consolidation phase. Once these points are established, it becomes easier to identify, understand and analyze risks.

2- Assess the Risk

After mapping the risks, it is time to listen to the company's managers to understand the processes and activities of each sector. Through analysis qualitative, it is possible to define the level of importance of each risk, as well as the probability of its occurrence. Through the analysis quantitative, you can investigate, using data and numbers, what potential impacts and effects the identified threats can cause for the company.

3- Mitigate the risk

This is the time to list the risks in order of importance in order to develop a prioritization scale. The idea is to create a prioritization scale from the greatest impact and probability to the least. Then, a plan should be created to monitor and eliminate the threats. The methods defined for solving the problems should be specific and based on facts.

4- Respond to risk

We have reached the last stage. At this point, it is necessary to monitor whether the prevention processes are being carried out, in addition to analyzing how the risks are behaving. There are several tools that can assist in this action, generating systematized controls, reports, performance indicators, management mechanisms, etc.

 

How to deal with risk and be more resilient?

  • We need to have visibility of what can happen;
  • We need to be agile in decision-making and actions;
  • We need to be flexible and operate with redundancy;
  • We need to collaborate.

See Priscila's explanation:

Well, now that you’ve discovered what risk management is and how important it is, how about getting started?

Companies generally have specific departments responsible for managing the situation. Their mission is to map out threats and develop prevention strategies, as well as implement and encourage all employees to ensure that everything goes according to plan.

 

About Priscila Miguel

Graduated in Chemical Engineering from the State University of Campinas (1995), she holds a master's and doctorate in Business Administration from EAESP, Fundação Getúlio Vargas. Coordinator of the Center of Excellence in Logistics and Supply Chain (FGV-CELog) of Fundação Getulio Vargas – SP and coordinator of the Strategic Management in Supply Chain research line of the Professional Master's in Management for Competitiveness of EAESP-FGV.

 

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