By Shatha Al Maskiry
2019 is a year that will present us with many uncertainties in the business environment and this is not unique to Oman; it is a regional and global trend. From a strategic aspect, the uncertainties offer business opportunities but it is also coupled with challenges and risks.
What this means for organisations is that they must tackle this risk by engaging in more dialogues between boards and senior management as well as external stakeholders to ensure there is alignment on a robust strategy that has a clear direction of where they want to be in the future.
Strategic risks are amplified when a strategy is reactive rather than proactive let alone the lack of vision, ineffective planning, and absence of market insights and poor risk management. More emphasis is needed to promote collaboration and communication across all levels to foster a strong culture of transparency, accountability, innovation and empowerment.
One of the most notable shifts in business risk is that the traditional way of operating especially in light of the economic conditions; is making larger businesses suddenly experiencing major revenue losses and razor-thin margins. To compete locally or regionally, we need to accept that resistance to change will hinder our growth and erode our sustainability.
The board, management and employees must become more active in questioning and evaluating the underlying assumptions behind their strategy, consistently challenging the status quos, accepting the existence of more nimble competitors and being better prepared with an agile business model.
Culture takes us to the bloodline of an organisation and almost every CEO mentions their increasing demand for talent who are quick learners that can unlearn and relearn. On the other side, organisations are pressured by talent to foster a work culture that is inclusive, collaborative, performance driven and promotes innovation.
Last year, we partnered with a sector-wide group on a successful initiative which focused on shaping commercial mindsets to make their sector competitive by producing creative solutions that solve real problems. This is an example of how organisations are shaping mindsets which creates a new culture that rewards innovation with learning and development opportunities to attract, reward and retain talent. It is every CEO’s dream to have a pool of reliable, motivated and highly engaged talent together with succession plans for all critical positions to ensure future growth and sustainability is not at risk.
One risk which I want organisations to stop turning a blind eye on is associated with legacy IT systems. Large organisations heavily rely on legacy systems and this itself is a big risk, as many are facing operational and people performance issues. The situation is further worsened with new competitors entering the market who are born digital or are a low-cost base.
A CEO of a large and well established company was telling me how one of their employees who was groomed by them has now set up his own company and they are losing large projects to him. When I asked why? The reason was he is far more agile and he swiftly embraced digitalisation.
This just goes out to tell you how a traditional operating mindset will actually set you back on the curve for digital readiness because you are not even open to change let alone resilient to keep pace with the changes in the market. We are at an age on what really matters is how fast a fish swims, not how big the fish is.
Digitalisation has advanced far faster and expansively than we ever anticipated and it is presenting a number of risks which impacts business model viability, competitive landscape, workplace dynamics, and regulatory demands let alone altering customer behaviours.
Sustaining customer loyalty and retention in light of their evolving preferences will continue to be a high risk if businesses do not pay attention in how to closely engage and enrich the customer experience. Options and substitutes are always available and customers will make that switch with no hesitation if it promises a new experience of gratification.
With that being said, the more we embrace digital disruptions, the more attention we need to place on cyber security measures. In conclusion, managing risks effectively is about being proactive, aligned, collaborative, and competitive. Organisations can achieve this with strong board oversight, and a robust strategy which is executed in alignment with its people, process and technology.
We need to use the most suitable technology to produce intelligent data to enable organisations to measure and manage performance proactively. This is the effective way to embrace this rapidly changing business environment. Culture is ringing it all together from a strong and clear vision to good governance to effective management and ultimately an environment that enables and motivates talent to perform its best.