Resiliency means having the ability to prevent or recover quickly from disruption. “Complacency kills,” says Tom Lawson, CEO of FM Global. “When you don’t manage the enterprise risk, the results can be pretty devastating.”
Companies have already faced devastating challenges over the last year, from the WannaCry ransomware attack to wildfires and hurricanes, and resilient executives know it’s never too early to prepare for the risks that lie ahead.
“What our clients are looking for is anything that impacts their revenue, their market share, share price, or reputation,” explains Lawson. He identifies three areas of risk that the C-suite needs to prepare for: cyber-attacks, natural hazards, and fire or explosion. Of those risks, Lawson says fire is still the leading cause of loss with FM Global’s clients.
“[Executives] need to assess where their supply chain is exposed, and which locations really are the most important to their operation to address those financial risks which impact your market share, your share price, and your revenue.”
The key, he says, is not to be complacent. “We did a survey last year after the three hurricanes for executives from big companies in Texas, Florida, and Puerto Rico, where the storms were, and 50% of them said the hurricane adversely impacted them, which you would expect. But of those impacted, six out of 10 said they weren’t completely prepared, and seven in 10 said they’re going to make some changes to risk management strategies going forward.
Lawson explains that, though you can’t outsmart a disaster, you can prevent the losses. And that’s important because insurance alone may not be enough. “Loss is not a foregone conclusion. You can change your future. But to do that you have to make a choice, and the starting point is you really evaluate what your exposures are, work with a partner that can help you assess that risk, and then take it corporately to build resilience into your business decisions.”
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This article originally appeared in FEI Daily and is republished by permission.