With Halloween behind us, the calendar turns to the most critical part of the year for Enterprise Risk Managers in the retail industry. An operational risk failure at this time of year can result in millions of dollars in losses, and it’s as important as ever to manage the reputational, strategic, and supply chain risk that will make or break a holiday season.
With that in mind, our friends at the Risk Management Monitor recently visited an Allianz survey of British retailers, which offers a few interesting insights on the concerns of large retailers.
Consider the top perceived risks identified by their survey:
- Customers Not Paying
- Bad Weather
- Being Let Down by Suppliers
- Launching Unsuccessful Products
- Keeping Customers Satisfied
Talk about covering your bases! With these lofty strategic goals outlined, a robust enterprise risk management program is absolutely critical to establish priorities. That’s why it’s shocking that the same study found that 53% of those surveyed did not list risk among their significant priorities, and less than one in three take the opportunity to reevaluate and plan ahead after experiencing a loss event.
What’s stopping these organizations from taking an active, enterprise risk management approach to retail risk? The likely answer is that responsibility for managing top strategic concerns, like customer satisfaction and supply chain management, is occurring in business silos. While assessments and mitigation activities are designed in these silos, the information is never rolled up or presented in a way where resources can be allocated and priorities set that align with the company as a whole.
The disconnect between identifying strategic goals and taking action to support them is not specific to retailers, and more businesses are beginning to realize the importance of enterprise risk management in bridging that gap. While grand in scope, the methodologies to accomplish true enterprise risk management are defined and available to risk managers. With the right approach and the right tools, your organization can achieve meaningful transparency in as little as 90 days.