Unexpected risks are all around us in today’s volatile, uncertain, complex, and ambiguous world (dubbed “VUCA” by the US Army War College). Manufacturers face challenges from powerful forces as technology, social, environmental, economic, and market trends converge, testing the mettle of even the strongest companies.
At the same time, manufacturing companies have an unprecedented opportunity to innovate and evolve. New customers, markets, materials, and technologies await exploration and provide unlimited opportunities for expansion and growth.
By managing strategic risk—the uncertainties and untapped opportunities that directly impact a company’s identified strategic goals—organizations can navigate disruption in manufacturing while supporting business goals and both creating and protecting value. Whether they continue to generate value for stakeholders depends on how well they prepare for and react to strategic risks.
Managing strategic risk effectively is much more than protecting value by avoiding potential downsides. Strategic risk can actually help create value by taking advantage of uncertainty and volatility to maximize gains and improve competitive positioning.