What If? Preparing for the Unexpected in Business

The reality, though, is that no company, no matter how big, is wholly invulnerable. Indeed, if the COVID-19 pandemic has shown us anything, it’s that the unexpected can strike at any moment and with sometimes catastrophic consequences.

This is why leadership in large organizations should take a cue from their smaller counterparts. This means guarding against complacency and being proactive in their crisis management plans.

This article identifies 6 significant challenges that can threaten large and small enterprises alike. It also describes the best practices you can use to protect your large organization in the event that these threats do come to fruition.

1. Data breaches

Data breaches are the great equalizer when it comes to business risks. Some of the largest, wealthiest and most powerful organizations in the world have been rocked by massive data breaches. Victims of cyberattacks range from the U.S. federal government and Microsoft to Wells Fargo.

If enterprises as well-resourced as these can fall prey, then that suggests that no entity is immune. However, there are a range of things you can do to decrease the likelihood of a cyberattack and to mitigate the damage should one occur.

This includes routinely updating your security infrastructure, regularly backing up your data, and, perhaps most important of all, maintaining a rigorous company culture of cybersecurity.

Learn more: 6 Major Cybersecurity Mistakes All Enterprises Make

2. Economic uncertainty

Recent decades have ushered in a protracted period of global market volatility and that economic uncertainty has only been amplified in the wake of the COVID-19 pandemic. As inflation soars worldwide and the threat of a significant global recession looms, it’s important to be proactive.

The key is to follow the lead of small to medium-sized organizations (SME) with fewer financial resources to fall back on in the event of a downturn. Specifically, you can manage periods of economic uncertainty by creating and regularly updating your crisis management plan.

Ensure that you have options for staying agile no matter what the market brings. This might include diversifying your operations to ensure that your revenues aren’t concentrated in one primary market segment. You may also need to develop a plan for streamlining operations, such as through automation and downsizing if certain troubling market indicators emerge.

3. Pandemics

In recent years, we’ve all gotten a painful crash course in the far-reaching and long-lasting havoc that a pandemic can bring. But just because we seem to have endured the worst of the COVID-19 pandemic doesn’t mean we’re in the clear.

Not only does the risk of the emergence of new COVID-19 variants persist, so too do threats posed by other pathogens. In reality, as long as there are humans, there will be pandemics, either potential or active.

The good news, though, is that there is much we can learn in this regard from the COVID-19 pandemic, particularly in the ability to shift to virtual operations when necessary. This also speaks to the importance of maintaining a strong emergency cash reserve should another pandemic lead to a market crash. The key is to have a plan to continue operating safely while also managing the financial impact of possible future lockdowns.

Learn more: How are Professionals Adapting to Remote Working During Coronavirus?

4. Natural disasters

Like pandemics, the threat of natural disasters is real and ineradicable. Unfortunately, as the climate crisis worsens, the potential that a natural disaster may impact your company seems only to be growing.

Because you can’t predict where and when a natural disaster will strike, or what form it may take, you need to be prepared for every contingency. This means creating a disaster recovery plan that’ll enable you to get your information and communications systems up and running as soon as possible.

Maximizing your company’s use of secure cloud technologies is one way to ensure you have a viable recovery plan in the event of a natural disaster. This way, if the telecommunications network goes down in your operating area, your team will still be able to have access to your systems and data offsite in the cloud.

5. Fraud

Fraud allegations are every business leader’s greatest fear. Allegations, no matter how spurious, can sow a seed of doubt in your customers, partners and investors that can be difficult if not impossible to overcome.

However, it’s possible to protect your company against fraud allegations in two principal ways. The first, of course, is to create a company culture that makes the actual practice of fraud a near impossibility. This includes maintaining rigorous auditing, governance, and ethical compliance standards across all divisions and at all institutional levels.

It also means ensuring transparency and accountability in business practices, including high levels of information-sharing for stakeholders, regulators and consumers alike. The more forthright, open and candid your company is, the less likely it’s that fraudulent activities will occur and the more likely it is that your company will be trusted.

Large-scale reputational damage

Even when your company does its utmost to maintain the highest standards of performance and ethics, crises can and do occur. Mistakes can be made either through simple human error or through unwitting negligence.

And sometimes, bad actors still penetrate the best defenses. Employees may violate expected standards and codes of conduct. Or your company may fall victim to criminals who, through your organization, harm your clients and investors as well.

Crises such as a data breach or a product malfunction that has resulted in death, injury or financial harm to consumers can lead to large-scale reputational damage. And this damage can have significant consequences, including legal liability and enormous financial losses.

It’s possibleto recover from reputational damage but it takes time, effort and humility. In addition to acknowledging the mistakes that were made and taking decisive steps to prevent their recurrence, it also means making amends to all who were directly or indirectly affected.

Learn more: 7 Ways to Prepare for a Reputation Crisis

Efforts to cover up, deny, minimize or shift blame will only exacerbate the damage to your company’s reputation. But when you step up, take responsibility and atone, you take the first major steps toward recovery.

The takeaway

When you’re leading a large organization, it’s easy to feel immune to the shocks that smaller enterprises are vulnerable to. The reality, however, is that no company operates in perfect safety and security all the time. Understanding and preparing for the threats that every company faces, no matter how large or small, is essential to long-term survival and success.