9 February 2017
The review of trends and risks are an important annual activity as part of strategy planning of successful organisations.
A handy process is to start with a list of trends or risks. For each trend or risk, ask what effect it might have on your organisation. These items could be positive or negative and you might have many for each.
Each item should be rated by its likely impact on the organisation: being high, medium or low. Deal with the high impact items and ignore the low impact ones. Secondly, it should be rated as strategic, tactical or operational, which will determine if it is a board, executive or staff issues. The mitigation of a negative impact or the leverage of a positive impact should then be determined and enacted in the organisation.
These trends or risks come from many sources. For many years, I have used a trend acronym: TEMPLE. TEMPLE standing for Technology, Economic, Management, Politics, Legal and Environmental.
World Economic Forum Risks
The World Economic Forum just released its global risks for 2017 which we can use for such a review.
The top five risks in terms of likelihood included;
- Extreme weather events
- Large scale involuntary migration
- Major natural disasters
- Large-scale terrorist attacks
- Massive incident of data fraud/threat
The top five risks in terms of Impact included;
- Major systemic financial failure
- Water supply crisis
- Food shortage crisis
- Chronic fiscal imbalances
- Extreme volatility in energy and agricultural prices
While you might say, it won’t happen here, the risk might be around what happens when it occurs in another location or country.
The full report can be found at www.weforum.org. NixonClarity facilitates strategic planning activities including strategic frameworks, trend reviews, SWOT Analysis, environmental scans and assisting organisations in developing strategic plans that are successful and yield results.
If you enjoyed this blog, check out my blog about different kinds of risk: https://nixonclarity.com/does-your-sme-struggle-with-governance-risk-and-compliance/.