(Risk Management cont. 1)

Strategic Risk Identification Process

i) identifying hard-to-predict strategic risks (use people inside and outside your organisation to identify and assess potential low-likelihood but high events)

ii) sensing capabilities (use latest technology to monitor in real time multiple verbals that may indicate a risk event)

iii) modelling and scenario planning (explore scenarios that incorporate multiple risks to determine potential impact on your organisation)
(for more details see elsewhere in the Knowledge Base)

iv) response capabilities (simulate responses to anticipated risk events, including plans to improve response capabilities)

v) linking risk management to your strategic plans (this will help identify factors that could impact (positively and negatively) your strategy)
Examples of successful businesses that have been negatively impacted owing to their failure to identified and handle risks

- Blockbuster (it was a successful home movie and video game rental services provider but failed to evolve from physical stores to delivering and streaming online; it thought it was in the entertainment distribution business and did not focus on the retail customer experience; it went bankrupt in 2010.

NB This is different to Netflix - it began shipping DVDs to customers homes in the late 1990s; change direction and and went online; it has become a $30 b. streaming platform)
- BlackBerry (successful mobile phone manufacturer in the late 1990s with its arched keyboard and first-rate encryption; however, the mobile phone industry began to focus on bigger touchscreen displays leading to a smart phone; they fail to adopt because they were more concerned about protecting what they already had)

- IBM (rose to prominence in the 1960s when it developed and released the IBM system/360; however, it failed to adjust to the personal computer revolution in the early 1990s that triggered its downfall in that industry; after going through several transitions, it is now one of the most successful names in the enterprise software industry)