The recession of 2008:
Uncertain economic times have a way of teaching tough lessons. The great recession of 2008 left most of the companies grappling with issues that they had never faced or those that they thought were too farfetched and could never come face to face with them. But it did and how!
One of the lessons that the recession taught each one of us and particularly the medium and the large corporate was that they need to constantly evolve their risk management strategies. There can never be one strategy that will fit all. In a way, it helped the management honchos to rethink all the strategies that were almost like set in stone before the recession actually hit them unaware. Before that, they thought that since the business was moving on smoothly there was no major reason for them to think about risk assessment and risk management. How wrong they were!
Today, there is a renewed focus on management of risks:
It is by far the most important need of the hour that risk assessment and management departments be set up immediately incorporate to be able to identify, assess and strategize on the risks in order to avoid any long-term or debilitating effect on the corporate or its business processes.
It would be an unfortunate event if a promising corporate has to suffer losses only because it was lackadaisical in assessing and managing its risks.
Risk as a cause of uncertainty:
The main cause of uncertainty in a corporate environment is the inability to handle risks mainly because they were not expected in the first place. a lot of time, energy and resources need to be put into assessing and identifying risks of the future because a lot of the corporate confidence arises from the mentality that it can fix any kind of challenges that will arise in case it has to face a kind of risk. This confidence helps it in taking the right business decision which has a positive implication in the corporate bottom line.
Knowledge is indeed power!
Just like shooting in the dark is dangerous, a corporate trying to take major decisions on its processes without actually identifying the risks is not just potentially dangerous but implies that the days of the company may be quite numbered. A clear appreciation of the risks is therefore extremely important in today’s economic climate. it helps shield the company from unwanted situations. Risk management is the mantra if you do not like to be in a situation that you would not like to be anyways!