Businesses spend billions of dollars in technology, resources, and manpower to protect themselves from cyberattacks. They have plans and backup plans for these events. But what happens if there’s a tornado that keeps onsite employees, like facility workers or flight attendants, from reporting to work?
New data from OnSolve’s Global Risk Impact Report found that physical threats like extreme weather events, violence, and infrastructure failures significantly increased in 2022. And most businesses have no plans for mitigating these types of crises. This information was collected using OnSolve Risk Intelligence, an AI-powered technology that observes more than 50 risk categories of real-time physical threats across 159 countries where mainstream businesses and governments operate.
By anticipating and proactively planning for physical threats, executives can save lives and make their businesses more agile. This article will look at the top physical threats that are rapidly increasing and the ways in which businesses can proactively prepare for and mitigate possible crises.
EXTREME WEATHER EVENTS ARE AT AN ALL-TIME HIGH AND CONTINUE TO INCREASE
Every year the risk of extreme weather events increases dramatically, endangering organizations around the world. In 2021 alone, extreme weather and natural disasters as a whole increased by 47%. Global floods are becoming a bigger threat, with a 28%increase from 2020 to 2021. This is a particularly significant issue in areas where extreme weather events have not historically occurred, such as the Winter Freeze in Texas or flooding in Germany and Brazil, which underscores how fragile critical infrastructure is in the U.S. and worldwide.
In the United States, Hurricane Ian is the most recent example of the catastrophic nature of these events, causing an estimated $67 billion in damage across Florida and the Carolinas—not to mention the economic impact of business closures. Extreme weather creates a cascade of events that leave a staggering scale of wreckage. In the United States alone, weather-related disasters caused an estimated $145 billion in damages in 2021.
PROTESTS AND CIVIL UNREST CAN BE THREATS TO BUSINESS OPERATIONS
2020 was a highly unusual year, with a surge in public protests related to historical events such as the Black Lives Matter movement. But after skyrocketing in 2020, global protests only increased 4% from 2020 to 2021.
However, polarizing events such as controversial Supreme Court decisions, political elections, and the consistent pace of horrific mass shootings across the United States continue to occur and drive public protest. Organizations must respond quickly when faced with nearby civil unrest, as there can be a direct impact on business and on the safety of employees, customers, or visitors.
GLOBAL INFRASTRUCTURE IS WEAKENING
Global infrastructure and technology incidents, like power outages and technical disasters, increased 111% from 2020 to 2021. The capacity to produce and transport goods may be restricted by the deterioration of buildings or weakened infrastructure. The extent of delay and impact will depend on whether organizations have backup operations in alternative locations.
WHAT CAN BUSINESSES DO TO PREPARE?
Unexpected crises happen every day, and business leaders need to understand the intricate web of threats they face so they can best protect their organizations. Businesses that manage risk effectively have a distinct advantage over competitors that don’t. That is why companies need to shift their thinking about what is “unexpected.” You can’t avoid all risks, but you can be aware of the risks that might impact your business and think through how you can reduce your exposure to those risks.
To start, organizations should have an operational risk plan in place. Identify your operation’s most critical areas and what risks threaten them, as well as how they have been threatened in the past. Consider the worst-case scenario and work backward to develop a “Plan B.” Be thorough in weighing the impact of the event and consider how long “Plan B” might need to be in place so you can ensure you have the resources to sustain it.
It is a CEO’s job to protect their business and their people. Data-rich risk intelligence and critical communications technologies, fortified by artificial intelligence (AI), can play a vital role in proactively mitigating physical threats and keeping operations resilient. Aggregating data from a variety of sources and applying AI to detect and correlate those events across an organization’s people, places, and property will help leaders anticipate and respond to events quickly, keeping operations running and employees, customers, facilities, and assets safe.
By thinking ahead, organizations can get ahead of detecting and managing unexpected physical threats and shorten the recovery period.
To be sure, the pandemic, storms, flooding, and wildfires have highlighted how unprepared most of the world is to handle and manage the aftermath of unexpected crises. Organizations must prioritize preparedness against rising physical threats to avoid the long-lasting damage that will affect businesses and impact millions of people in the United States and around the world.
Mark Herrington is CEO of OnSolve. He has a strong track record of 25+ years founding, managing and leading high-growth businesses.