In an era defined by disruption, permacrisis and rapid transformations, organisations able to see risks yet to emerge and explore how these not only impact on their risk framework, but also how they are related can expect growth and greater strategic focus over longer time horizons. Organisations unprepared for disruption driven by unidentified interdependencies, meanwhile, could eventually fail through failing to respond to risk or seizing new opportunities.
With heightening geopolitical risk, and climate change amplifying diverse risk exposures, discovering, quantifying and mitigating against interconnected risks can be essential yet challenging.
Interconnectivity brings blind spots that can cause problems and failures through focusing on single risks. If something goes wrong and exceeds organisational resilience, it's rarely the tried and tested area of risk with numerous tightly defined controls and scenarios. It's something connected to the risk or just beyond the imagination.
In this insight, we offer practical tactics on revealing unseen co-dependencies, exposures and opportunities. We explore the smarter ways to identify and mitigate future risks your business could call on to thrive long into the future. Because it is through capturing complex risk interconnections that more organisations can look to boost their resilience in an uncertain world.
We’ve seen a variety of businesses often struggling to get a handle on complex and connected risks. This challenge can be due to a range of barriers to achieving joined-up, future-focused risk governance, including:
By understanding any barriers to your organisation having a fit-for-purpose approach to interconnected risk management, you can then move to overcoming them through a range of qualitative and quantitative methodologies.
We suggest there are a range of tactics you can use to manage barriers to addressing interconnected risks within your organisation and it’s risk management portfolio. Organisations considering the new ISO 31050 - Guidance for managing emerging risks to enhance resilience may find this a useful challenge to bring new perspectives to their risk approach. These should centre firstly on challenging assumptions. This process should bring unseen risk dependencies to the surface, encouraging collaboration across business functions, and working towards an elevated risk governance regime that offers the business a repeatable, but necessarily flexible, means of outsmarting complex risk connections.
Long-range perspectives and ways forward on managing hitherto unexplored risk connections can help your organisation:
For smarter ways to prepare for the risks of the future with data-driven, expert-led, wide-angle interconnected risk management process, get in touch with WTW to discuss a tailored Interconnected Risk Review.