Risk management in an ever-changing world
The activities of our industry are most commonly referred to as 'risk management'. While this term inherently implies an individual's, group's or organization's ability to maintain a certain level of control over risks, both the local and global events of the past two years have made this assumption appear increasingly outdated. Instead, risk intelligence provides an effective alternative based on systematic and continuous information collection and analysis.
Experts from around the world – be it advisory firms, think tanks or international organizations – agree on the following: as a globalized society, we are facing an unprecedented number of continuously changing risks. The last two years alone have stood us face to face with a global pandemic, turbulent geopolitical changes including a significant shift in our perception of international and regional security, and tangible social tension, often resulting from a distinct fragmentation of the information landscape and ever-loosening interpretations of the concept of truth.
In addition, some of the near existential dangers to society have been long overlooked by the global public. Only a few months ago, the World Economic Forum published its annual Global Risks Report 2022. The included list of the 10 'most severe risks on a global scale over the next 10 years' relegated the threat of geoeconomic confrontation to last place, ranking it as less of a threat than debt or natural resource crises. Several weeks later, however, a brutal assault on Ukraine evolved into a lasting conflict threatening to further grow in scale, resulting in the largest refugee crisis Europe has faced since the Second World War. The region of Central and Eastern Europe especially finds itself in a vulnerable position, given its proximity to the war zone and its service as a transit hub for the fleeing refugees. Any ranking of risk significance suddenly appears to be no more than an educated guess.
The traditional approach to risk monitoring and evaluation which primarily focuses on a firmly defined set of risks therefore no longer suffices. In a world that can change in the blink of an eye, one must do more than simply address the situations which have already arisen. Instead, it is necessary to gather relevant information both online and offline through complex IT tools and a trusted network of inside sources and employ it during the development of various strategies for addressing individual scenarios.
So how can one prepare for the constantly changing social, business, technological, legislative or information environments?
Complex, proactive, and flexible
Today's globalized world requires professionals in the risk intelligence industry to adopt a proactive and holistic approach. Risks no longer exist individually in predefined lists, but instead, they are interconnected and influenced by one another. Individual threats are therefore replaced by a complex network of interdependent risk areas. For example, global warming directly affects the growing number of natural disasters which present a threat to individuals, private organizations and their property. Damage control will be performed by both private and state organizations, creating opportunities for legal or geopolitical tension. What position will activist and nonprofit organizations or the public adopt in this situation? And what implications can this carry for the reputations of all of those involved?
The ability to observe any given situation from a distance and focus on the so-called big picture while formulating a strategy will eventually provide significantly more effective ways of reacting to the interconnected risk scenarios and identifying the most suitable solutions.
Delivering top risk intelligence
In our view, risk intelligence is based on proactive, complex and strategic thinking about the situation at hand, which takes into account various scenarios of developments, the mutual influence of various risks, the looming consequences and their importance.
This makes possessing the utmost possible amount of knowledge and information allowing for the adoption of various viewpoints an indispensable condition of risk intelligence. Nevertheless, it is not always possible to predict which information or knowledge will be relevant in a specific situation. A proper grasp of risk intelligence therefore also requires:
complex knowledge of the specific geographical area and business environment;
gathering the maximum amount of relevant information, whether through open-source intelligence (OSINT) or via relevant actors (so-called human intelligence, or HUMINT); and
the ability to adequately analyse and contextualise the acquired information.
Combined with close communication with relevant stakeholders and the human factor, this creates a complex and highly effective approach to addressing risks. As a result, relevant parties are equipped with the highest possible amount of relevant information and are involved in discussions about potential scenarios and their implications, meaning that at the end of the collaboration they are prepared to make a well-informed, qualified decision about future steps in high-stakes situations.
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