Risk Upon Risk: How CFOs Can Master Multiple Crises

Risk Upon Risk: How CFOs Can Master Multiple Crises

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The pandemic was a harsh teacher for businesses around the world, as it forced them to grapple with multiple crises simultaneously. From supply chain disruptions to the health and safety of employees, companies were challenged as never before. But now, as the worst of the pandemic fades into memory, the lessons learned during that tumultuous time remain crucial.

Today’s business leaders face an entirely new complex web of crises and risks intersecting on economic, environmental and social fronts. From talent shortages to inflation to interest rates to geopolitical turmoil, business leaders must contend with a dizzying array of challenges. At the same time, continued supply chain disruptions, cybersecurity threats and growing corporate social responsibility obligations further complicate matters.

Understanding the fluid and evolving nature of these risks is crucial in this current moment. Business leaders must be adaptable, agile and forward-thinking. Companies must enhance the skill required to manage multiple crises over time to stay ahead of the game, ensuring they are well-equipped to handle whatever the future may bring.

Being Prepared for Multiple Crises

In business, as in life, it's not uncommon to be hit with multiple curveballs at once. For instance, perhaps your company is experiencing a sudden supply chain disruption caused by a natural disaster, and then an unrelated cyber-attack threatens your internal systems. While it may be tempting for any CFO to throw up their hands in the face of such challenge, the most important thing you can do is prepare for the unexpected.

Being ready for a second — or even third — crisis can mean the difference between weathering the storm and being left adrift in a sea of chaos. By investing in robust contingency plans and building a resilient organizational culture, you can ensure your business is equipped to navigate even the toughest challenges.

A long-term contingency plan should identify potential risks and develop detailed response plans that account for intersections between crises. But a plan is only as good as its execution. That's why businesses must invest in regular testing and refinement to ensure effective response plans. Empowering employees to take ownership of their roles in responding to crises and building a culture of resilience with ongoing training and education can also help foster a proactive mindset that supports proactive risk management.

Enterprise risk management (ERM) specialists can review your operations, exposures and current risk management strategies, identifying areas for improvement and creating a simplified and customized plan of action. This helps organizations respond quickly and efficiently to crises, minimizing disruption and maintaining business continuity.

Leading Through Hardship

It's important to remember that in times of crisis, strong leadership can be the difference between success and failure. When multiple crises converge, CFOs and risk managers must stay focused and act swiftly. Effective time management is critical, ensuring that each situation is handled promptly and efficiently.

Clear and transparent communication is also essential, both internally and externally. By keeping all stakeholders informed and engaged, you can foster a sense of stability and trust even during times of hardship.

Above all, leaders must prioritize the safety and well-being of their employees, stakeholders and clients. This means taking a proactive approach to risk management, implementing measures to mitigate potential harm and constantly assessing and adjusting your response as needed.

Enhancing Your Risk Management

When it comes to risk management, there are usually two schools of thought: proactive and reactive. While some companies take a proactive approach, others rely on a reactive strategy, only responding to risks as they arise. In many cases, the latter is driven by a lack of resources, especially when a CFO is already stretched thin and wearing multiple hats, with risk management being one of them.

In today's unstable business environment, relying solely on reactive risk mitigation is a dangerous game. As mentioned earlier, today’s risks are more numerous, complex, and interconnected than ever, and waiting until a crisis strikes can have severe consequences.

Hiring a Dedicated Risk Manager

With risks looming around every corner, more companies increasingly recognize the importance of hiring a dedicated risk manager and even an entire risk management team. With their specialized skills and expertise, these professionals can focus solely on identifying, assessing, and mitigating organizational risks. When an organization is not large enough to justify a permanent risk management position, partnering with a specialized firm can provide the necessary expertise on an ongoing basis.

By integrating risk management into the fabric of the organization, businesses can foster a culture of risk awareness and proactive management. This helps identify and mitigate existing risks and enables companies to adapt and respond to new and evolving threats over time.

Utilizing Enterprise Risk Management

At CBIZ, we understand that every organization is unique, with its own set of risks and challenges. That's why our ERM professionals work closely with you to understand your individual risks, enabling us to develop and implement tailored solutions that meet your specific needs.

Contact us today to learn more about how we can help you confidently navigate the challenges of the future.

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CBIZ MHM is the brand name for CBIZ MHM, LLC, a national professional services company providing tax, financial advisory and consulting services to individuals, tax-exempt organizations and a wide range of publicly-traded and privately-held companies. CBIZ MHM, LLC is a fully owned subsidiary of CBIZ, Inc. (NYSE: CBZ).

Risk Upon Risk: How CFOs Can Master Multiple Criseshttps://www.cbiz.com/Portals/0/Images/Hero-RiskUponRisk.jpg?ver=xw9M0HkViGhB9UnZ0f_hMg%3d%3dhttps://www.cbiz.com/Portals/0/Images/Thumbnail-RiskUponRisk.jpg?ver=FNCZy-DFUB1ri-luJtVzFg%3d%3dSee how the COVID-19 pandemic has presented lessons CFOs can use to help craft their risk management plan to avoid future crises.2023-05-23T17:00:00-05:00

See how the COVID-19 pandemic has presented lessons CFOs can use to help craft their risk management plan to avoid future crises.

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