Is your company's risk management reactive??
Traditionally, risks in companies have been handled reactively. But reactive risk management is ineffective and can cause, among other things:
Missed opportunities
With reactive risk management, you can miss opportunities for innovation and growth because you are always one step behind. Not managing risks proactively creates unnecessary extra work because you need to deal with deviations and possible consequences - instead of spending time and resources on the work that drives the business forward.
Increased costs
Not reacting to risks in time leads to high costs compared to preventing or mitigating risks proactively. It requires unplanned resources such as emergency response teams, investigations, reclaims, and legal or regulatory compliance actions. These costs can strain budgets and hinder the organization's financial performance.
Inefficient resource allocation
When organizations focus primarily on reactive risk management, resources are allocated to fixing problems rather than preventing them. It can lead to a cycle of constantly dealing with the same or similar risks, over and over again.