After weathering the series of crises that defined 2020, it’s not unreasonable for business leaders to feel uncertain about their crisis preparedness. But just as with machine learning—the application of artificial intelligence in which algorithms learn and improve based on experiences—CEOs and leaders alike can learn from last year and take a hybrid approach combining data-driven strategies with empathetic communication to empower a flexible crisis response framework.
With enterprise risks generally falling into four categories—operational, reputational, cyber, and business—there are three key actions your leadership should take to prepare for and mitigate negative impacts of global crises that fall into one, if not all of the aforementioned.
ACCESS AND DEMOCRATIZE RELEVANT REAL-TIME DATA
The moments leading up to an emerging crisis are critical. It’s not often that globally impactful crises are unforeseen. While the business world hasn’t sourced a crystal ball that tells us the future, there is typically a build-up, such as with geo-political issues or climate-change–influenced disasters, which allows savvy decision makers to prepare. In the absence of clairvoyance, leaders should incorporate real-time information (RTI) into their response and planning.
Although a recent study found that 75% of global risk and compliance decision makers define RTI as data that has been received in the span of a day or longer, I define RTI as intel received within a few minutes of an event taking place. Depending on the crisis, the time advantage for crisis response gained from RTI could be minutes, hours, or even days.
For example, on December 30, 2019, Dataminr provided its customers with the earliest warning of COVID-19—seven days in advance of the U.S. government’s announcement. Since then, the AI business continued to provide early alerts on public social media activity that appeared to foreshadow new clusters of outbreaks in the U.S. and the U.K. This kind of advanced information enabled businesses across industries to think ahead about what the impact could be and begin to prepare.
According to the aforementioned study, companies that described their enterprise risk-management efforts as “optimized” or “measured” found more value in real-time information than their industry peers, whose risk-management functions are more ad hoc. Since the onset of the pandemic, I found that our customers have been adept at identifying their unique set of risks and using real-time information to inform their decisions, such as closing down retail locations or shifting supply chain priorities.
Between unprecedented government-mandated lockdowns and changes in consumer behavior and preferences, relevant, on-the-ground data is crucial for enterprise frontline leaders in their ongoing business continuity planning and structural preparedness for potential pivots in 2021.
DISMANTLE OPERATIONAL SILOS
Whether your business was operationally flexible and able to weather the digital security risks that came with going remote or the reputational risks that came with failure to adequately respond to the pandemic, managing risk became a highly collaborative exercise across functions.
Breaking down silos to streamline fast decision making and new processes empowers leaders on the frontline. C-suite executives should not enable risk management to be confined to any single department or be performed on an ad-hoc basis inside operational silos. In order to increase the speed of decision making in effective crisis response, ownership of risk must be shared cross-functionally.
When function owners and frontline leaders have equal and consistent access to RTI, they can assess risk from their unique points of view to help craft a well-coordinated response and be prepared for key questions in the midst of a crisis. Questions such as, how do we protect the health of our employees and customers? Do we have the IT infrastructure in place to support a rapid shift to remote work? How do we pivot our business model to preserve cash flow? How do we foster employee engagement and productivity amid unprecedented personal tragedy? How do we protect our brand reputation?
One of the biggest takeaways of 2020’s disasters is that risk management is an evolving study and the technologies, processes, and structure around it must also evolve to include and support frontline leaders across an organization.
BE COMFORTABLE WITH PIVOTING
The pandemic forced an operational reset with many businesses seeing the positive impact of flexibility within organizational structures, technologies, and innovation development. The ability to adapt and be flexible determined the viability of enterprises, from restaurants and DTC brands pivoting operational models to enterprises shifting to remote workforces.
This capability will not lose value, therefore its paramount for leaders to accept that this has to be a consideration in their response to the next global crisis. To ensure your future pivot—whether organizational or operational—is successful, you must take a strategic look at the accomplishments forged last year at the height of the pandemic and weave them into the new operating models. Understand the decisions you made, the speed that was required, and what technologies or stakeholders were necessary to facilitate those decisions.
With so many factors such as digital transformation, and political and economic instability now shaping business conditions, it’s important for decision makers to keep these takeaways in mind.
Jason Edelboim is President and Chief Operating Officer at Dataminr where he leads the company’s go-to-market.