On risks and threats: Preparing for the unexpected

THE Covid-19 pandemic has been called many names. If we are to be straight and definitive, most see it as a spread of a viral disease, a contagion that halted our way of life as we knew it. Seen from another perspective, it is a global health crisis that, as the UN secretary-general described in a 2020 speech, calls for solidarity and improved “health emergency preparedness.” From an economist’s point of view, it is a risk that slowed economic growth and crippled global financial markets.

If there’s one thing that businesses have learned during the pandemic, it is that we must always expect and prepare for the worst. It means taking a look at risks that can have longterm effects and looking for ways to prepare, survive and bank on an organization’s resilience to withstand such challenges. Seems easy to do, right? Well, not really.

A potential rise in Covid-19 cases still looms as a threat amid a gradual business recovery, as cited in the Regional Economic Outlook 2022 report by Singapore-based Asean+3 Macroeconomic Research Office. Hence, being prepared is the way to go. But where do we start?

Preparing for the unexpected entails coming up with an efficient critical event management and business continuity plan that has the scalability and capacity to withstand something as unforeseen as the Covid-19 health crisis. In a nutshell, risk management refers to a set of actions undertaken to identify threats and predict their impact on a business.

A McKinsey article provides that organizations stand to benefit from employing a new approach in risk management and mitigating the effects of critical events. To do this, risk management activities must be inclined toward promoting three components: detection of potential risks, determining the appetite for risk taking and deciding on which risk management approach to use.

On top of adopting risk management protocols, it is best to take a long, hard look at other internal policies of a particular company. Research shows that maintaining a collaborative and healthy work culture is highly beneficial and has direct effects on increased productivity.

Think of it as a situation with a domino effect. When employees are happy, they are much more likely to huddle together, brainstorm effectively and come up with innova

tive means to improve policies and plans, which when adopted will help the firm better withstand external disruptions and unpredicted critical events. Promoting employee well-being? Check. Improving company policies? Check. Whichever way you look at it, several key business areas will be improved and covered.

Being prepared also means being able to deliver high-quality services even amid emerging risks such as the growing hostilities in Ukraine, threats of continued high inflation, and even fraud and cybersecurity issues. In a world looking for more options for high-quality audit services, businesses must imbibe and showcase an “unwavering focus on quality, along with purpose, unique culture, brand and market focus,” according to a Grant Thornton insight.

For firms in other sectors, what this necessarily entails is making significant strides in improving particular aspects of business. If your company is in telecommunications or retail, for instance, developing customer service policies and putting in extra effort to adjust to clients’ needs can do a lot to maintain brand loyalty. A Forbes article suggested that taking “quiet but dramatic” steps to boost customer service can yield good business results.

It is hard to look for a silver lining amid uncertainty and unforeseen disruptions. But we can start by looking closely at the positive repercussions of these events and by turning an otherwise devastating experience into something fruitful and beneficial for business in the long run. Preparing for something unaccounted for will only be a setback if we let it and if we choose to stray from the idea of employing innovation and transformation.

Renan Piamonte is the partner for audit and assurance and head of risk management at P&A Grant Thornton. P&A Grant Thornton is one of the leading audit, tax, advisory and outsourcing firms in the Philippines, with 24 partners and more than 1,000 staff members. Tweet us at @GrantThorntonPH, like us on Facebook at P&A Grant Thornton and email your comments to pagrantthornton@ph.gt.com. For more information, visit our website at www.grantthornton.com.ph.