What to do if a machine is down due to water damage? What if an accident occurs and the authorities close down operations until the cause has been clarified? What if the power suddenly goes out? The scenarios for which companies must be prepared are numerous. Nevertheless, according to the current Global Risk Survey by the PwC auditors, there is still a lot of catching up to do when it comes to corporate risk management. Many companies only initiate measures against business interruption after damage has already occurred. “Everyone knows that something can happen. But when the unbelievable happens, most people are surprised,” says Gerhart Ebner, head of Risk Experts GmbH. A shutdown usually costs far more than “just” the turnover. In addition to the loss of earnings, which is already bitter in itself, there is also a threat of reputational damage and customers and suppliers being dropped, depending on the situation. Aside from a lack of gas in manufacturing companies, blackouts or accidents, there are also risks for service companies to manage, for example a failure of the IT infrastructure due to a cyber attack.
“It was important to us to weigh up risks in the product and delivery areas more closely.”
Be well prepared for crisis scenarios
Blackout, cyber attack, gas supply stop, climate change, pandemic – the potential threats for companies are numerous. “It is important to be well prepared for possible crisis scenarios,” knows Martin Heimhilcher, head of the information and consulting division of WK Wien. “The entrepreneur knows his own business best. Together with a management consultant, risk areas can be better assessed and clearly defined,” adds Heimhilcher. This external support in times of uncertainty helps to implement the right measures in advance.
Assess risks correctly
Sarah Lechner, founder and managing director of the Viennese company BRüSLi, which specializes in the production and sale of muesli from overproduced bread, knows how risk management works in practice. She founded her business in the middle of the Corona crisis and prepared accordingly for crisis scenarios: “I think that we approached the whole thing with a certain mindset. For example, we geared operations to remote from the outset and can now switch to remote mode at any time if necessary – for example if we have to be in quarantine -” says Lechner, who herself comes from the risk management area. “Because my business partner and I both worked in this area before, the topic of risk management is already incorporated into all of our processes and our way of thinking, and our communication structure is also designed in such a way that we can react quickly to critical scenarios,” explains you. According to Lechner, it is important to take a close look at your own business and assess which risk scenarios exist and how likely it is that they will actually occur and lead to a standstill. “In addition to the basic preparation for risks in the food sector, for example, it was important for us to take a closer look at possible risks at the product and delivery level – i.e. scenarios that have a high probability of occurring.” For blackout scenarios, which no one can really assess and of which no one knows if and when they will occur at all, Lechner thinks little for BRüSLi at the moment. “No one can see into the future. I think you have to remain realistic and consider to what extent you as a company are directly affected by possible scenarios, which measures make sense and whether the resources are available for them,” Lechner is convinced. And: “It’s important how I deal with the situation as an entrepreneur and what I make of it – new opportunities arise from many situations.”
“You have to ask yourself, ‘How long can I last when I’m all gone?'”
Risk assessment from within
For Roman Käfer, risk management specialist, WiFi trainer and managing director of the consulting firm Procon, dealing with one’s own structures and identifying possible risks for the company is the first step in the right direction: “Every company – whether it’s a one-man operation or public limited company – can consider: ‘Where are my critical steps?’”, he explains and recommends thoroughly examining all processes in the company. “First and foremost, the risk assessment must come from within – after all, everyone knows their own business and internal processes and procedures best and knows where there are potential weak points,” he explains. Risk catalogs can also offer support: “You don’t have to start from scratch, you can use such catalogs – all risks are listed generically here,” says Käfer, who also attends advanced training courses at Wifi-Vienna for this area risk management offers.
How long will my business last?
Estimating the endurance is also essential for Käfer when preparing for possible business interruptions: “You have to ask yourself: ‘How will I hold out if nothing works anymore?’ is still fit for risk: “From a certain age, I have regular check-ups during a healthy check-up, even if I feel healthy. That’s what companies should do.”
Opportunities for comprehensive analysis
At least since Corona, everyone has known how strongly individual risks are linked. The global closures have ultimately led to supply chain problems and contributed to the acute shortage of skilled workers. A comprehensive risk analysis of the company not only helps to weigh up and cushion critical events, it also offers many opportunities. “Every engagement with the company illuminates connections and shows potential. The improved knowledge of the company is worth its weight in gold,” says Ebner. The Global Risk Survey sees the opportunities in the right balance: “An adequate degree of willingness to take risks can also help to generate growth. The companies surveyed with the best risk management are almost twice as likely to increase their sales growth by at least eleven percent.”