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Just as experts now expect the coronavirus to become endemic, broad sets of societal risks have likewise become ever-present in business decision making. As crises appear and subside with increasing frequency and impact, future-focused leaders are focused on four long-duration high-impact risks:
01
As of the writing of this piece, cases of the Omicron variant of COVID-19 are declining in many countries, with experts watching potential new variants and citing evidence that the virus causing COVID will remain endemic. Future-focused leaders stay vigilant in maintaining programs and promoting strategies to educate employees on the effectiveness of interventions to limit the spread of current and future infectious disease threats. They balance their focus between short-term mitigation efforts and multi-layered long-term risk management strategies. In areas with high transmission rates and cases, they support testing, improved ventilation, high-quality mask wearing, physical distancing, reduced travel and decreased employee density through remote work or staggered work schedules. As cases fall, they reduce measures while being ready to pivot back, when necessary. They facilitate employees remaining healthy and getting vaccinated by communicating the importance of vaccinations and boosters, sharing resources on how to obtain them, and providing paid time off. They modulate activities to balance crisis management operations and business continuity and growth.
02
Data suggest the “Great Resignation” crisis will give way to permanent talent shortages in some areas, particularly for certain jobs, skill areas and geographies. In addition, many of the jobs of the next decade have not yet been invented. In this environment, future-seeking leaders emphasize talent strategies that involve both offense and defense, and create places people want to be regardless of circumstance. They strive to be “net talent gainers,” hiring more employees than they lose due to resignations, and learning why people join and stay as well as why they leave. They differentiate culture and employee experiences instead of merely ratcheting up pay and perpetuating wage inflation. They know that providing workers with flexible work, pay, benefit and skill development programs results in significant competitive advantage over less-flexible peers. They use purpose as leadership glue to drive constancy in company culture while business models and daily operations transform.
03
Climate change and the transition to a net-zero economy pose new challenges for leaders in a world of higher frequency and concurrence of climate events, and acceleration of climate transition goals. Climate analytics enable leaders to make robust decisions by enhancing transparency and reducing data gaps. Analytics also highlight the strengths and limitations of available tools and their implications for planning. Leading companies drive meaningful climate action by hiring and developing people with new skill sets and capabilities, re-organizing key functions and processes, building new metrics into programs and incorporating climate issues into corporate governance. These organizations take steps to understand and quantify their environmental impact, and incorporate employees’ roles in their strategies. Because people are critical enablers of both sustainability and risk management efforts, future-seeking leaders focus on people-oriented interventions to help achieve climate goals. Successful organizations create cultures and programs for employees that align with strategies and objectives, as well as more broadly to support company commitments around climate. They tackle climate risks through adaptability, enabling the incorporation of new information that arrives daily or hourly – and the ability to act decisively when sudden events happen – while simultaneously managing long-term strategies to achieve climate transition goals.
04
Despite considerable focus on the pandemic, talent shortages, and climate events, future-focused leaders understand that today’s growing and interconnected geopolitical risks also encompass broader issues, including war, terrorism, and cyber threats. For example, supply chains can be disrupted by disputes between countries, especially when it comes to raw materials and perishables, technology components (e.g., microchips) or energy (e.g., petroleum, natural gas, electricity). They also know cyber-attacks and geopolitical instability are linked, with significant potential damage to digital and financial assets, supply chain and reputation. Successful leaders address the asymmetric relationship between security threats and incidents, and do not take for granted the potential impact from a lone actor, a tariff dispute or a border skirmish (or war). They develop a multi-variate plan, incorporating situational awareness, foresight and judgment into their operations. The objective is to effectively prepare for prevailing threats and generate a more sustainable and resilient position through organization, communication and education. This means increasing vigilance and understanding that adaptability also is the most important leadership and organizational trait in responding to broad-scale global threats.
Ultimately, future-seeking leaders seek to avoid downward spirals caused by intersecting events. Given the frequency and simultaneous occurrence of these risks, successful leaders recognize their interconnected nature and manage a “portfolio” of risks at the enterprise level.
A version of this article originally appeared on Forbes.com on January 21, 2022.
