Risk Management: The CEO's New Imperative
“Incident management and disaster recovery have always been on the corporate agenda. However, many companies have delegated these responsibilities deep in the organization. Now with the Covid-19 crisis, these issues have moved front and center,” said Bob Sibik, co-founder of Fusion Risk Management, as he chatted with me over webcam from his living room in Chicago. “Suddenly every CEO and executive leader is learning a lot they didn’t know about risk management to prepare for the board meeting, to talk to employees, and to reassure customers.”
I met virtually with Bob to discuss returning to the workplace safely. He shared 35 minutes’ worth of advice on keeping employees, customers, partners, and communities safe and informed during Covid-19 and beyond. Here are the highlights.
Q: Tell us about risk management. Why is it important, and why now more than ever before?
Sibik: Any company can, and will, manage risks when they become urgent. The real question is how much will managing that surging risk derail your ability to do anything else? How much will your business fall off the rails as you turn your focus and attention to a crisis? The most resilient companies plan ahead and take a proactive approach to risk management so they can keep teams productive and business on track when things get tough. It’s all about resilience and business continuity and how you can function effectively in a crisis. And it has become significantly more important now that we’ve experienced the global disruptions from the Covid-19 pandemic.
A few months ago, CEOs and executive leaders were focused on growth and operating efficiencies. Now, the C-suite is also focused on risk and resilience. It has become the third pillar of business success. We want to get people back to the workplace safely, learn from this pandemic, and be better prepared in the future. The C-suite is looking to risk management experts for help, to make sure they don’t get caught unprepared again.
Q: How can companies make this shift? How can they make risk management a core capability?
Sibik: There are a number of strategies to achieve this kind of change. First, we counsel CEOs that risk management and operational resilience must be part of the core values of an organization. But it has to be balanced. It must not affect your ability to grow the business, and you should not overspend on operational resilience to the extent that it has a negative impact on the bottom line. Putting the value of operational resilience in proper perspective will better position you to accept risk. Accepting risk includes dealing with it, managing events like Covid-19, and ensuring that you can deliver for your customers.
Second, bring together the various silos within your organization and discuss what lessons you’ve learned from this pandemic. This exercise will help you function more collectively and act more collaboratively. Collect these lessons to understand what worked well, and what didn’t work well. This understanding will inform your plan to reopen, get you back into business, but perhaps most importantly, get you ready for what is next.
Q: Isn’t it true that operational resilience looks different for each organization? How do you plan for that?
Sibik: No matter the company, the ability to bring together data with technology presents you with a single perspective and enables your inherent resilience. By studying your resilience, you’ll understand where your organization might break, how it might break, and what else might break as a result. Create that single pane of glass to understand where to invest. For instance, you might determine that you need more capacity or redundancy for availability of critical systems. Determine your deficiencies, weaknesses, or single points of failure in your supply chains in order to put preventive measures into practice. This way, things won’t break, or won’t break as easily.
Another example is remote work. It’s not uncommon that companies have had to relocate their entire workforce to work from home, but in doing so it’s crucial to understand how working from home might disrupt processes. Rapidly working with the most critical employees gets the most important things up and running first. The relationship and the dependency mapping between these critical aspects helps focus on the most important business processes.
Q: How should customers prepare for what is next?
Sibik: We have to consider the immediate future, such as a second wave of Covid-19, but also what the new normal looks like. Consider the new world order, a new business-as-usual, the post-Covid-19 era. What does that mean for organizations as we try to operate in that environment? That might include a different way of understanding and interacting with customers and employees, while ensuring productivity. To prepare, bring all of your customer data together to get a clear perspective, act collaboratively, and focus on the ongoing management and maintenance of those proactive and reactive measures. This ensures that you can respond quickly and effectively now and in the future.
One of our customers is tracking every issue that occurs going forward, and then rapidly reporting on it, assigning resources to work on that issue, and tracking the progress of the remediation. They have learned a lot of lessons, and through Fusion’s dashboards developed leveraging Salesforce’s technology, the executive team can see these issues, the status, and make informed decisions fast. It’s about shifting your mindset. It’s about survival now; this is not a subtle ROI. If you don’t plan for these contingencies, you can be wiped out. We’ve seen this with a hurricane or when a tornado hits a power plant. But now, everybody gets it because everyone is facing the same crisis. You can’t plan for everything, but you can prepare for everything.
Q: Technology must play a huge role in this.
Sibik: I find it hard to even contemplate how someone could do effective risk management without technology. Data is crucial, and technology manages and houses data. Without current and actionable data — which is going to depend heavily on technology — you can’t run an effective risk management program. Technology automates the management and maintenance of your data, which enables companies to see and understand, in real time, threats and risks. This will prepare you for breaks inside your organization. Paper and pencil can’t do this anymore. It’s got to be done with technology.
Our 300-plus customers know technology plays a huge role in risk management. They have all embraced our system on the Salesforce platform. Many had Salesforce, but hadn’t contemplated using it for business continuity and risk management. Now they are.
Q: How can you set yourself up for success with technology?
Sibik: Technology works when you have a good database, a good data model, and good workflow automation. The administration of keeping data current is not something that can be done with annual updates. Your operational resilience information needs to be updated constantly, so that when things change you’re prepared for the impact and can swiftly take action. We see Fusion as a natural extension of your CRM, helping you understand how crises and other events are affecting your ability to deliver services and products to your customers, directing your organization where you need to act immediately, and what can wait. This is an opportunity to digitally transform your organization.
This post was originally published on the AppExchange and the Salesforce Ecosystem blog. This is an edited version. The full article is available there.
Amanda Nelson is Senior Manager, AppExchange Content & Community at Salesforce.
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