The ongoing corporate landscape depicts corporate directors, business heads, and CEOs combatting the impacts of the COVID-19 pandemic on different fronts. But once this is all sorted and things start to go under control, the very next step that businesses must take is to renew their global strategy and leadership practices to attain growth irrespective of the crisis.
The process of creating a business strategy stable enough to keep up with the unprecedented external environment in the pandemic begins with understanding how the crisis soared in the first place. What created this crisis is known as a systemic risk that tainted our economy, social, political, healthcare, and business systems on the global level. Systemic risks are considered dangers that jeopardize the entire global ecosystem. Systemic risks are not wholly erratic but require a deep understanding of how things are interrelated and how small events can have massive influences.
Identifying Systemic Risks
In the digital business ecosystem, a systemic risk prevails in every organization but most of them have no clue about their digital and cybersecurity risk levels just because they don’t understand the concept of systemic risk. In the same way, the world couldn’t recognize the risk involved with the COVID-19 pandemic and the financial system couldn’t identify the systemic risk linked with the recession 2008.
This clarifies that systemic risks have been with us all over this time but due to our complex global systems, we couldn’t understand the level of systematic risk associated with them. But this is exactly what every business corporate leader needs to understand so that they can navigate their way into the future.
Understanding systemic risks to navigate the way into the future
Systemic change can affect entire global systems including business strategies and have a much bigger foundational impact paradigm transforming results.
Generally, organizations make regular changes within their business systems to optimize, acknowledge, and respond to opportunities and threats but they often miss out on making overall changes to their entire business system. Systemic change does not come so quickly but takes time to unfold.
COVID-19 is a shock for every organization around the world. It has drastically impacted and changed social systems, economies, consumer behaviors, demands, and values. It’s easily understood that regulators will step in, employee motivations will change, technology will continue to disrupt, business partnerships will be impacted, and politics will continue to be the top player. And when all these forces collide together at the same time, the business strategy must adapt and respond actively to these issues while the business leaders must identify how the new world order will impact their business and stakeholders.
Therefore, a better understanding of systematic risk and systematic change is required for organizations and corporate heads to create a viable business strategy in times of such crisis.
Here’s how organizations with global strategy and leadership can create an effective business strategy post COVID-19
- Gain a deeper subject knowledge of systematic risk and change including how it causes the pandemic. One such example is how businesses have seen the systematic threat of cybersecurity risk highly affecting their entire business system.
- Analyze and anticipate the systematic changes brought by COVID-19 followed by identifying the event and opportunities that can change entire systems including a business system.
- Emphasis on the change drivers that have high certainty and predictability in your industry.
- Do not forget to keep an account of the slightest small or micro-level changes as they have an outsized impact on complex business systems.