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2017 Fortune risk management survey
Shift risk strategies, accelerate performance
According to a Deloitte-sponsored Fortune risk management survey, a value-focused strategy can help organizations create value and improve performance.
- Are you going fast enough?
- Survey findings
- The road ahead for smart risk takers
- Get in touch
- Join the conversation
Are you going fast enough?
The champion race car driver Mario Andretti said it well: “If everything seems under control, you’re not going fast enough.”
The same holds true in today’s fast-paced, complex business environment. To stay ahead, you need to lose a little control and take risks. Yes, taking more risks can lead to costly mistakes. But nobody became a champion race car driver or an industry leader by focusing solely on reducing risks and protecting existing market share.
The reality is that opportunity doesn’t exist without risk. But when risk is taken strategically—with a value-focused approach—new opportunities to create value and improve performance emerge. And these opportunities have the ability to enhance reputation, market positioning, and competitive advantage. Organizations who shift their mindset from risk-averse to risk-aware will find that they are better able to lead in their industry, navigate risks and opportunities, and disrupt through innovation.
This perspective on risk hasn’t always been prevalent with business leaders, some of whom historically viewed risk management solely as a function to protect their current business model. To understand how far organizations have shifted their risk strategies, the Deloitte-sponsored Fortune risk management survey asked 300 US-based executives at large organizations whether they view risk management as a means of accelerating business performance.
Want a quick summary? The majority of executives polled in the Deloitte-sponsored Fortune risk management survey do see risk management as a performance accelerator. But our survey revealed more nuanced findings as well.
The benefits of a value-focused approach to risk strategy are significant:
- Heightened corporate performance: Organizations were more likely to achieve better financial and operational performance than their competitors.
- Competitive advantage: Business leaders were better able to manage costs and improve customer relationships, creating competitive advantages.
- Enhanced brand and reputation: Organizations experienced improved risk protection and reputational resiliency.
With change comes challenge:
- Implementation obstacles: Most responding organizations appear to struggle with implementing a value-focused risk strategy. Even though 88 percent of respondents indicated that they recognize value creation as a key goal of their risk strategies, only two in five have been successful in its implementation. Being hampered by organizational silos was cited as a top risk-related failure in the past three years.
Timing is everything:
- Speed and agility: Several important shifts are expected in the next three years, making it imperative for business leaders to react quickly. Cyber security is already top of mind. But despite the rapidly evolving nature of the threat, a little over half of respondents say that cyber risk is both a threat and an opportunity. For organizations, building a risk-aware culture and identifying opportunities for loss avoidance are becoming more important, while improving compliance is becoming less of a focus.
The road ahead for smart risk takers
Change starts in the driver’s seat. In order to shift successfully to a value-focused risk approach, organizations can adopt several leading practices focused on:
- Strategy: Break down the wall between risk management and strategic planning.
- Culture: Create a culture where risk is everybody’s business.
- Measurement: Employ data analytics to measure risk and predict trends.
Ultimately, this report is a story of human judgment, in which executives understand that risk management is a means to achieve a lot more than protecting the business. For those who can use speed and the unexpected to their advantage, the future looks bright.