PwC's Risk in Review 2014

Pricewaterhouse Coopers (PwC) has published its annual Risk in Review survey. Nearly two thousand global corporate professionals representing a broad cross section of industries responded to provide insights into how their organizations meet the challenges of enterprise risk management.

The study was published against the backdrop of an emerging Eurozone recovery, US Sequester driven GDP decline, BRICS vacating the leadership role of global market drivers, the factory collapse in Bangladesh, the political turmoil of the implementation of the Affordable Care Act and Eric Snowden’s revelations of NSA privacy violations. 

The previous year survey reflected the perspective of corporate managers still smarting from the economic effects of the Great Recession and global credit crisis; by anointing financial distress and market uncertainty as the principal driver of corporate threats. This years survey cited technological change, IT risks, regulatory complexity and rapidly changing customer needs as the primary focus of corporate risk management programs.

The survey examined the intimate relation of external risk factors and how the organization has aligned its internal GRC processes to address both external and internal risk. The survey identified the ten most common risk management capability gaps. It also offered an evaluative framework to distinguish corporate risk leaders, early stage adopters and organizations beginning to develop a more formalized risk aware culture. 

The survey is an excellent examination of the components of a risk aware enterprise and a proposed framework to develop a risk aware culture within a commercial enterprise. The survey can be downloaded from the PwC website. 

In future posts we will examine some of the major points the survey raises to promote a more risk aware corporate culture.

Sum2 publishes a series of risk management apps for SME’s. Our leading product Credit|Redi provides a full complement of risk assessment tools to implement a risk aware corporate culture. Credit|Redi generates in-depth financial analysis reports that spot strengths and weaknesses in a company's financial condition. Credit|Redi also provides a series of enterprise assessment applications to monitor risk and determine opportunities for business growth to build a risk aware enterprise that wins the confidence of lenders and stakeholders.

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Risk: GRC, PwC Risk in Review, SME, risk culture, ERM, IT, customer risk, capability gap, risk appetite, change management, stakeholder communication, regulatory risk 

Cultural Revolution at Apple: Steve Jobs Ego

This Marketplace interview is relevant to the tricky issues surrounding the transformation of business culture of SME's. Since the death of Steve Jobs, Apple has been struggling with transitioning its corporate culture into a post Jobs era. 

SME’s whose business brand and culture is often associated with the founders personality and ego creates transition problems when the founder leaves or refuses to alter the business model due to the inability or reluctance to change themselves. 

Apple has been phenomenally successful, and continues to be due in large measure to the culture of product and marketing innovation Jobs created. Apple remains incredibly profitable. It has a portfolio of “insanely great, world changing products”, a loyal client base and a healthy product pipeline. So some may ask, why make changes if it ain’t broken? 

Well in a sense Apple already is broken. Apple’s products and marketing panache has always been identified with Steve Jobs. In the public mind the Apple brand is synonymous with Steve Jobs. Jobs’ demise immediately decoupled Apple from his earthly presence and future managerial control. 

Though his entrepreneurial drive and spirit of innovation continues to be central to the Apple ethos, over time his absence diminishes its influence as market conditions forces changes on the company. 

I see this pattern often repeated in my work with SMEs. Beth Wood, from Mass Mutual put it well when describing family owned businesses "often steeped in tradition and not as flexible to change, tend not to have formal plans in place to respond to crisis. When confronted with challenges they just can't react fast enough.” 

Ms. Wood makes an interesting observation about the importance of business agility. The need to assess the rapidly changing market dynamics is a critical exercise that SMEs must undertake. Business as usual will not get it done. SMEs must begin to transform to better align its business model to rapidly changing markets. 

Family owned businesses or company cultures closely associated with a “cult of the principals personality” have difficulty overcoming the gravity of generational culture that inhibit and resist change.  SMEs will survive and thrive if they can identify and adapt to the emerging opportunities current business cycle create. 

A challenge for older SME's is to encourage cultures of innovation that fortify the will and resourcefulness to promote change. These qualities are key ingredients for sustainability and growth. Business as usual is giving way to a "New Normal," where adaptability to structural market changes drive asset appreciation and wealth creation. 

We honor the contributions and virtues of visionary business leaders like Steve Jobs. But we cannot afford to make them sterile icons that chain us to the nostalgia of the past. 

Get risk aware with our business assessment apps on Google Play. All of our Mobile Office apps run on MS Office and Android. Our apps help SME’s assess risk factors to profit from the opportunities shifting markets present. 

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risk: transition, exit strategies, change management, innovation, sustainability, sme