It’s A Risky Business
Open your eyes to the potential risks around the corner
Sometimes danger appears in the most innocuous places.
For example, did you know that more than 50,000 people are injured by jewelry in the U.S. every year? But jewelry can be quite sharp, you might say. Then what about the 6,000-plus people admitted to U.S. emergency rooms each year with pillow-related injuries, like the big ones you get in a hotel? And it’s not that the U.S. that is dangerous. Over 4,000 people are injured each and every year in the U.K. by teapots. Yes, teapots.
These statistics are all the more astonishing because the injuries are being caused by inert objects that only move under our power. We have complete control over these items at all times and the damage is actually self-inflicted.
Now, despite the fact that on occasion we all could have used one, it’s likely to be a pretty strange day when someone gets injured by a pillow at work. But all businesses, including yours, face a number of risks day in day out, and beyond the jewelry, pillows and teapots, we can’t always see them coming.
No organization can operate without suppliers. We rely on them for all manner of products, services, ideas and more, and most businesses will spend more on its suppliers than they will on any other part of their organization. It’s the single biggest cost line and their influence is huge.
But here’s the thing; we’re putting our biggest financial outlay directly into an area where in reality we generally have the smallest level of visibility and control.
While these are different kinds of dangers, they are still self-inflicted. It’s not quite as amusing anymore, is it?
Prepare to fail or fail to prepare?
We’ll let you into a little secret. You are going to be at the center of a major risk incident this year. Yes you, you reading this. OK maybe not you, but someone you work with, someone you know. According to the Business Continuity Institute, 70% of organizations reported at least one supply chain disruption last year. Over 40% of those were at tier 1 (key supplier) level. Let’s assume that this year is no different and then do the math: statistically there is about a 30% chance of failure facing you and your key supplier.
Let’s put that into perspective. Look around at ten people in your organization who manage critical supplier relationships. Three of them are going to have a problem. Business impacting? Probably. Career threatening? Possibly. So what are you going to do about it?
Let’s start with three simple questions:
- What are some of the worst possible things that could happen?
- What steps have you taken to identify if they are likely to happen?
- What are you going to do if it does happen?
The truth is that ‘not knowing’ is the absolute worst place to be. In the case of failure ignorance is no excuse today. And so when choosing ‘not to know’ we accept that we are driving blind when we could easily take simple steps to a faster, safer and better way.
You wouldn’t drive a car down a twisty, narrow mountain road with your eyes closed would you? Well you might these days in a driverless car, but you get the idea—open your eyes!
So open your eyes, that’s what they’re there for
It doesn’t need to be complicated. When you really look at what each of your suppliers does for you, you can start to segment the types of risks that you are exposed to and how impactful they could be. Then you can start to make some informed decisions about the questions you want to ask, how often you need to ask them (please not just when doing initial sourcing!), what sort of evidence you need to see, and what sort of contingency plans you may need to have ready.
You’ll be surprised how far the supplier’s influence may spread and the types of risks you might consider; cyber, health and safety, financial, data protection, ethics, customer contact to name a few, and we haven’t even got onto operational performance yet!
You’ll be able to do three key things across your suppliers and your people:
- Get control and understand what you care about and where current risks sit
- Gain visibility of all your data and predict where there is potential future exposure
- Do something! Take fast, insightful, data-driven decisions
Keep in mind, the best businesses are not necessarily the most risk averse. A little bit of managed risk can be good in the right places. We’ve all got friends who never took a risk in their lives. What do you think of them? Nice, dependable, boring? Who do you want to spend your time with? Who enriches your time on the planet? You may find that a little bit of risk in the right place makes you a better business. So open your eyes.
Data drives informed decisions. It’s your data. And they’re your decisions.
What’s holding you back?
We’re making this sound easy, and it looks easy on paper, but doing this at scale is a daunting task. And that’s what holds most people back. What do you prioritize and where do you start? Many businesses spend weeks of man effort for every monthly risk report, only to do nothing with it (because they spend all their time reporting). The point is, you can’t do it at scale without smart technology.
But what if you could turn every 20 minute conversation you have with your team asking them about their suppliers into 20 seconds looking at live actionable data? What if the effort associated in capturing and reporting that data was going to decrease their workload, significantly? What if you could actually manage all your supplier data, not just risk, in the same place? A single source of truth, something that you could turn on next week. You’d be interested, right?
Today’s smart technology doesn’t just exist to put out fires. It is designed to help both you and your suppliers grow together and improve your performance and profitability. Choose the right tech and you choose the right path.
Something to think about while you take off your jewelry tonight, finish that last cup of tea, and put your head on that oversized pillow.
Now where’s the risk in that?
- All businesses face a number of risks, and we can’t always see them coming
- You, or someone you know, will be at the center of a major risk incident this year
- The best businesses are open to a certain amount of managed risk
- To successfully manage risk you need the right data on hand
- Real-time data can open your eyes to risk and improve your—and your supplier’s—performance