The latest enterprise risk management news from around the world

Latest Emerging Risks Monitor Report shows that ‘pace of change’ is the top emerging risk

Organizations are concerned about their ability to keep up with a rapidly changing business landscape, driven in part by concerns about their own organizations’ lagging and misconceived digitalization strategies, according to Gartner, Inc.’s latest Emerging Risks Monitor Report.

In the second quarter of 2019, Gartner surveyed 133 senior executives across industries and geographies, and the results showed that ‘pace of change’ had emerged as the top emerging risk in the 2Q19 Emerging Risk Monitor survey). Last quarter’s top emerging risk, ‘accelerating privacy regulation’, has now become an established risk after ranking on four previous emerging risk reports.

Closely linked to the concern around pace of change are two operational risks, including ‘lagging digitalization’ and ‘digitalization misconceptions’, which Gartner experts said may be partly driving the top concern around pace of change and related threats from business model disruption.

“Among the top five emerging risks in the quarter’s survey, the linkages are clear,” said Matt Shinkman, managing vice president and risk practice leader in the Gartner audit and risk practice. “Organizations are concerned with the pace of business change and vulnerability to disruption. Part of the reason they may feel this risk so acutely is related to concerns around their own operations, including digitalization strategies and an inadequate talent pipeline.”

71 percent of respondents indicated that pace of change was a key risk facing their organizations. This risk was a consistent concern across industries, with particularly high ratings in healthcare, insurance and industrials, with executives in these industries indicating pace of change as a top emerging risk with a frequency of 70 percent or higher.
The concern around pace of change is driven by fears of being disrupted by nimbler competitors and a lack of clear avenues for growth. This risk can materialize through a rise in the number of new, disruptive competitors, a failure of the brand proposition to meet client needs or demands and executives not responding to macro trends and changing consumer needs.

Gartner says that risk leaders have a role to play in inserting themselves early in the strategic planning process and to work across function by collaborating with strategy and finance teams to encourage positive risk taking, such as transformative measures to the business.

Digitalization concerns increase vulnerabilities

Other emerging risks that may be contributing to executives’ concerns around pace of change are related to digitalization:

Lagging digitalization -  executives expressed concerns that digital budgets were inadequate, a high number of digitalization projects failing, concerns about scaling projects and project delays. Risk leaders can help drive change management initiatives related to digitalization, provide support to employees in a high-change environment, and help assess and manage expectations related to project success.

Digitalization misconceptions -  with two out of three digital transformation projects failing to achieve their stated objectives, an increasing focus on digital projects can reveal enterprise weaknesses. Progressive organizations favor clarifying strategic objectives early and taking an incremental approach to digitally driven business model transformation. This helps the organization learn at scale, with limited risk.

More details.



Want news and features emailed to you?

Signup to our free newsletters and never miss a story.

A website you can trust

The entire Continuity Central website is scanned daily by Sucuri to ensure that no malware exists within the site. This means that you can browse with complete confidence.

Business continuity?

Business continuity can be defined as 'the processes, procedures, decisions and activities to ensure that an organization can continue to function through an operational interruption'. Read more about the basics of business continuity here.

Get the latest news and information sent to you by email

Continuity Central provides a number of free newsletters which are distributed by email. To subscribe click here.