Navigating Uncertainty: Risk Management in the C-Suite

Jessica Ollenburg, CMC, CPCM

In the dynamic landscape of business, the role of the C-Suite goes beyond steering the ship; it involves skillfully navigating through risks that can impact the organization’s success. Effective risk management at the executive level is paramount for ensuring sustainable growth and resilience. In this article, we explore strategies and tools that empower the C-Suite in managing risks proactively, while never losing organizational ability to capture positive opportunity.

Understanding the Landscape

In today’s dynamic business landscape, the role of risk management has never been more crucial, especially within the C-Suite. As the driving force behind organizational strategy, executives must adopt robust strategies and tools to effectively manage risks and safeguard their enterprises. Empowered executives will grasp a comprehensive understanding of organizational risks. This involves conducting thorough risk assessments, considering both internal and external factors. By identifying potential threats and opportunities, executives can develop a strategic approach to risk that aligns with the company’s objectives.

Establishing a Risk-Aware and Opportunity-Aware Culture

Executives should promote open communication regarding risks and opportunities at all levels of the organization. As individual humans, most cannot see all facets of organizational risk and opportunity; however, bringing these viewpoints together can close the gaps. Appreciative Inquiry offers us extraordinary opportunity to amplify what is working well rather than to focus on what’s wrong. While we cannot afford to negate problems, we must recognize that humans are naturally inclined to over-attend what’s wrong, thereby mitigating our opportunity to excel. Compartmentalization must be deployed to isolate the negative from the positive, so that we can more easily bring real opportunity to the forefront with lesser strain on people and resources. While quick bursts of adrenaline can empower us for limited time, the relaxed mind is statistically far more powerful to create, invent and problem-solve than the overly stressed mind. Proactive risk mitigation remains popularly considered to be three-times less costly than reactive risk mitigation.

Building and Relying Upon the Right Information

Geopolitical uncertainty and the questionability of external data contribute to landscape “fog.” Deploy internally derived data to the greatest ability and value possible, keeping in mind the cost-benefit analysis of data collection and interpretation. Extrapolation can be deployed where best. Rather than entrusting or ignoring external data, check intuitively opposing sources for external data, and interpret this in consideration of internally-derived data and company-specific trends. This enables timely identification and mitigation of potential issues, creating a more growth-ready and resilient business environment. Leveraging advanced data analytics helps in discerning patterns and trends, providing executives with the necessary foresight to identify emerging risks and opportunities.

Embracing Technology

Technology plays a pivotal role in modern risk management. While the threats of overdependence, misinformation and privacy breach are real, artificial intelligence is thriving as a business resource; leveraged in part to create communications, customer service and cyber security, among other popular uses. As with all tools, the caveats must be understood and addressed at the highest level to ensure alignment and to capture enhanced opportunity.  AI can thrive as a resource where proper human judgment and proper risk mitigation are deployed.  Executives should leverage advanced analytics, artificial intelligence, and data-driven tools to assess and predict risks. Technology platforms should be designed in part by those who truly know the efficiency of tasks. Those who allow their tech teams to run amuck with platform change without true value are threatening their own companies. Platforms must be built with future informational needs in mind, as the creation and coding of fields is critical to the future use of today’s information for tomorrow. The best use of technology provides real-time insights, enabling proactive decision-making, being nimble and reducing response time in the face of emerging threats and opportunities. In communication, technology-enabled practices will consider that younger team members have statistically spent more time communicating through devices rather than the old-school means of negotiating, persuading, managing conflict and leading.

Legal Risk Management and Compliance

Staying on top of regulatory compliance is crucial. Executives must ensure that their organizations not only comply with existing regulations but also anticipate and prepare for regulatory changes. This proactive stance mitigates legal and financial risks associated with non-compliance. Constantly changing laws at local, state and federal levels create a significant burden in research, know-how, due diligence and affirmative defense. The nexus of remote and hybrid workers must be carefully considered with knowledge regarding the true nexus of work, supervision and unique governing laws. As an example of this burden of know-how, my own Inbox folder of government notices regarding lawsuits, fines and changing laws/precedents has increased by 1104 new announcements in only one month’s time, December 2023. Much of the strongest demand for Ollenburg Executive Consulting is immediately in not only the change management know-how through extensive experience and never-ending research of what works and what doesn’t, but also the risk mitigation available through affirmative defense signed off by court-recognized third-party experts. Additionally, our LawfulChecks.com initiative reports significant increases in pre-hire background investigation. While many employers are required to perform such checks where hiring fiduciary, secure access, childcare, healthcare, privacy and/or the many other categories of extraordinarily trusted employees with restricted access; we’re seeing an increase in employers seeking to protect their existing team through more precise evaluation of incoming team without discrimination and without creating risky internal records. Where talent shortage exists, an attractive employer culture includes mitigating risk and maximizing quality of work life for team members.

In Conclusion

Effective risk management involves scenario planning; and by developing and testing various scenarios, executives can identify vulnerabilities and formulate contingency plans. This proactive approach helps organizations adapt swiftly to unforeseen challenges, creating a nimble organization. While being properly risk-reduced is key, we recommend a keen awareness to view opportunity and upside as equally critical to organizational health. A properly aligned organization will often achieve the greatest reputation and workforce strength. Today’s leaders may have a blurry vision of employee motivators due to changing times, yet establishing and honing a well-defined and well-aligned organization can attract and engage the right people to the right seats with the right resources and clarity. Collaboration is key. Executives must work closely with different departments to ensure a holistic approach for optimized opportunity and mitigated risk. By implementing robust strategies and leveraging cutting-edge tools, the C-Suite can lead their organizations to not only survive but thrive in the face of challenges. 

Opportunities to Shine… Leading Through COVID-19 and Beyond

While the regulatory and reactionary environment can certainly bamboozle even the smartest and toughest of leaders, staying calm under pressure is your discipline as a business leader. This is a time to aptly steer your business toward a changed landscape, and this could be your time to really shine as a leader!

• Change is Imminent for Most

• Solutions are Available

• We Already Know a Great Deal

• Now is the Time for Leaders to Shine

• Early-Mover Status Could Pay Off

While often in business, the cost of change – or even researching change - may exceed the benefit; the opposite for many is true right now. Are you taking advantage of opportunities to improve and rethink? Our presentation here delivers a critical checklist of questions and opportunities to be asked and answered uniquely by each distinctive business. These are the footwork to blueprints which can be formulated for competitive edge and best solutions for recovery and/or leading through and beyond the COVID-19 era.

Questions & Opportunities Part 1: Planning

Back to Leadership Basics

• Reconsider all aspects of your business plan.

• Most companies will need to change.

• Cookie-cutter solutions will never deliver competitive edge.

• If you succeeded without the 3-6 month safety net until now, kudos to your risk tolerance and look for ways to further your success in the best direction. Don’t give up.

Customer Demand

• Do you know tomorrow’s customers, their concerns and how to address their needs?

• Are your choices and communications providing assurance to your customers and to your customer deliveries?

• Can you reposition your service or product to address immediate needs of the COVID-19 landscape?

• What about e-Commerce?

Future Vision

• Are you deploying your inventive side to see the future of your business?

• If you can see your company’s future, are you making choices today that successfully move toward and protect that future?

• Op - Ed and slanted media will impact demand unless or until it’s exposed as wrong or obsolete.

• Empower yourself with both what people believe and what you have researched to be true. They may differ.

• Does your revised plan build upon or newly engage the relationships that best serve your future? Can you see where your best help will come from?

• Is your supply chain already disrupted and does it need to change? Will your supply chain impact how tomorrow’s customers and stakeholders perceive your business?

• Are you cutting back too far now to be feasibly responsive to emerging opportunities?

• What have you learned about doing more with less?

• Are you using technology to a better advantage without extracting the judgment needed from key thought leaders?

A Pivot or a Leap?

• Is one foot in place like Shake Shack or are you leaping like Lexus?

• Can you “leap” without brand confusion and/or negative imaging?

• Re-evaluate brand, culture & building trust: have you properly aligned these?

• Will your succession planning change? Will your exit planning change? Will there be a wave of mergers and acquisitions that will result from COVID-19’s impact on business? If you prepare for that now, can you improve upon your options?

The New Flow of Money

• Contrary to the memes, not everyone is losing money.

• Money isn’t disappearing but rather changing hands in new ways. Find your place in the new economy.

• Per Morgan Stanley: $243M of the $349B Paycheck Protection Program Round 1 (nearly 7% of the PPP) went to publicly traded companies. This may create investment opportunities. 74% of PPP loans were under $150K each according to the Small Business Administration.

• If you’re aiming for loan forgiveness, what is your contingency plan if the loan is not forgiven? What can you newly accomplish if the loan is forgiven? Are you still in the hunt for money?

• As we tee up for Round 2 of CARES Act PPP and EIBL, are you watching and/or jumping in?

Questions & Opportunities Part 2: The Rollout

Nimbleness & Scenario Planning

• There’s much we don’t know yet, but we know enough to be scenario planning. If A, then B. If C, then D, etc. Criteria, measurements and vision facilitate quick action and the confidence of others.

• Decision Tools: Do your data scientists know the benchmarks, range of possibilities and what success looks like? Have you provided them enough latitude?

• Are you delegating too much that requires executive judgment and/or creates high jeopardy of bad choices? Are you micro-managing your team where they don’t need your judgment?

People & Psychology

• Anxiety, Depression & PTSD: Panic is here, and so are triggers. Deploy crisis management, fear diffusion and palatable answers as assurances. Set up wellness resources.

• Target characteristics for new or returning employees: Is your new business plan best served by the same employees, and will they want to return?

• Motivation methodology: Understanding Maslow, ERG et al, are you properly leveraging what will motivate your next-phase employees? Will your workers win in your new plan?

• Remote work transitions: Is your transition to remote work working or does it need adjustment? Have you properly crafted your remote work policies? Are you isolating people who need more in-person teamwork? How will this change your keys to success?

• Listen, observe and encourage new opportunities for thought incubation and leadership. Six Hats, Appreciative Inquiry and constructive brainstorming are 3 tools we bring to change management.

Managing Risks, Liabilities & Compliance

• Know, communicate and consistently apply the Families First Coronavirus Response Act (FFCRA) and potential amendments.

• Minimize risks and perceived risks of contracting COVID-19 on “your watch” via screening for contagion, sanitizing and distancing, observing government directives as reasonable care, requiring PPE (within ADA/EEOC compliance), eliminating unnecessary travel and, of course, heightened care for the vulnerable population. Share your message and make your efforts visible and consistent.

• Comply with ADA, EEOC, HIPAA, OSHA and more without failure. Follow CDC rules for protection and diagnosis. Keep health information under medical privacy officer custody, shared only “need to know.” Now may be a good time to ramp up your medical officer’s training. Consistency is a strong protector against discrimination complaint.

• Template and “cookie cutter” handbooks likely need revision. Employee handbooks which are not updated and not customized to fit are jeopardizing fiscal prudence and hassle-free enforcement.

• Comply with changing compensation and benefits rules, including but not limited to EFMLA, EPSL, changing employee classifications/eligibility, payroll system calculations, time tracking for remote workers, medical certification definitions and enforcement.

• Remember that legal risks and laws shall be shaped by emerging court cases and statutory/regulatory changes. Confer with legal experts who can also be your affirmative defense expert witness.

Ollenburg LLC clients tell us our unique value is found in our ability to deliver affirmative defense, interpret statutory gaps, incorporate big-picture thinking and offer wide perspective of tactical experience during this time of rapid change. We suggest partnering with external subject matter experts for best planning, confidence and outcomes. Our perspective at Ollenburg LLC is everchanging with new findings, responses, regulatory changes and risks/opportunities. Daily extensive research is combined with decades of successful entrepreneurial experience. Thus far, we’ve been able to facilitate crisis management, business transformation, risk avoidance, bootstrap finance plays, key tactics and forecasting. We are uniquely able to provide court-approved affirmative defense to reasonable care, safeguarding our employer clients from noncompliance fines or lawsuits. We’re easing the burden of many, creating peace of mind and minimizing risk for today’s top employers, and this essay is a playbook for thought leadership at the highest executive level.