Treating Risk as an Opportunity
Throughout 2023, the world has been confronted with a mixture of new and previously encountered risks. As the world’s context continues to evolve and corporations must adapt their approach to account for this uncertainty. Even though risks have a negative connotation as a "threat" to a business' ability to operate, leading it to lose profit or fail, they can also be perceived as an "opportunity." The distinction between how companies perceive risk depends entirely on their culture and attitude.
THE UPCOMING SOCIETAL AND ENVIRONMENTAL RISKS
Multiple types of risks exist, but the most dangerous ones are invisible or unpredictable. Surprisingly, according to the most recent global risk report from the World Economic Forum, which monitors perceptions of global risks among risk experts and world leaders in business, government, and civil society, the top five risks are societal and environmental, but none are economics. Due to fundamental geopolitical and economic trends, the following decade will be characterized by environmental and social crises. The "cost-of-living crisis" is regarded as the most severe global risk over the next two years, reaching its peak due to widespread social unrest. While "biodiversity loss and ecosystem collapse" is viewed as one of the global dangers that will deteriorate quickly over the next decade. The issue for businesses is what to do and how to react when this inevitable occurs.
RISK AS A THREAT V. RISK AS AN OPPORTUNITY
Depending on the organization's attitude, risks can be divided into two categories: a risk with adverse effects is a threat, while a risk with positive results is an opportunity. To view risk as an opportunity, "Leadershift," which is the ability and willingness to shift in a way that positively promotes organizational and personal growth, is required. One of the qualities of Leadershift is its agility to seize opportunities. This includes making rapid adjustments to situations involving embracing an occasion with limited potential and transforming it into a chance. Moreover, organizations with Leadershift quality are ready for success in a shorter time frame and can make decisions under extreme uncertainty without deliberating for a long time.
It is impossible to eliminate risks. However, if effectively managed, they can be reduced and transformed into opportunities for improvement. Rather than viewing risk as a constant threat, view it as an opportunity to gain a competitive advantage.
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