What, Me Worry?
According to the latest Aon Global Risk Management Survey, risk management is top of mind for industry leaders worldwide. With good reason, apparently, since the Aon data shows that there has been a significant decline in risk readiness from 66 to 59 percent among 28 industries represented in the study.
In its broadest definition, risk management means assessing or quantifying potential loss and then taking the best course of action, based on your risk tolerance and other factors, for the desired outcome. Perhaps the biggest example of bad risk management is the 2008 recession. It is a textbook study in loose credit risk management that was exacerbated by a variety of other issues.
According to the Aon study, the top risks today are:
- Economic slowdown/slow recovery
- Regulatory/legislative changes
- Increasing competition
- Damage to reputation/brand
- Failure to attract or retain top talent
- Failure to innovate/meet customer needs
- Business interruption
- Commodity price risk
- Cash flow/liquidity risk
- Political risk/uncertainties
Sound familiar? If you add to these factors the other external elements that can wreak havoc on our economy and consumer confidence – like the Associated Press Twitter account hacking that roiled the stock market last week – you can see there is no shortage of possible challenges.
Of course, challenges abound in every dimension of life and business, and often create new opportunities. Often the organizations that you think should be on top aren’t. Or those that were on top yesterday are gone today. For example, look at Fast Company’s recent list of the Top 50 most innovative companies; Facebook was noticeably absent. Yet there is a whole crop of other companies that are redefining themselves successfully through social media and technology, including Nike, Pinterest, Square and Ford Motor Company. Yes, you read that correctly: Ford Motor Company, proving that traditional businesses have as much opportunity to innovate as any others. By investing in R&D and offering car owners software updates that make vehicles relevant, Ford is redefining itself to its customers.
Credit unions can also take a fresh approach to managing risk and taking advantage of new opportunities.
The world continues to rapidly change, but preparing ourselves for the risks and opportunities that arise from that change will remain an important constant. In fact, Kaihan Krippendorff, best-selling author of “Outthink the Competition: How a New Generation of Strategists Sees Options Others Ignore,” plans to help credit unions find the “fourth option” to see beyond current solutions to create a competitive advantage during his keynote presentation at NAFCU’s 46th Annual Conference and Solutions Expo, July 9-13 in Boston.
The conference will focus on ways credit unions can take action with lessons from top-notch industry speakers and in four customizable educational tracks: management and operations, business development, credit union board and supervisory committees, and regulation and economy. In addition, there will be two theaters in the solutions expo featuring sessions on innovation and solutions. So instead of worrying, prepare your credit union for the latest risks and opportunities facing our industry—join us in Boston!
