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Transforming under deep uncertainty: A strategic perspective on risk management
Slagmulder, Regine Devoldere, Bart
Slagmulder, Regine
Devoldere, Bart
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Publication Type
Journal article with impact factor
Editor
Supervisor
Publication Year
2018
Journal
Business Horizons
Book
Publication Volume
61
Publication Issue
5
Publication Begin page
733
Publication End page
743
Publication NUmber of pages
Collections
Abstract
Companies increasingly face the need for transformation in today’s rapidly changing business environment, characterized by major shifts in technology, regulation, and customer behavior. A lack of strategic risk insight and foresight leaves many incumbents insufficiently prepared in the face of such deep uncertainty. We argue that traditional risk management falls short because it predominantly focuses on strategy execution while leaving strategy formulation largely untouched. Moreover, an administrative-heavy risk management process can create strategic inertia and a misleading sense of control. In today’s dynamic business context, companies must not only increase the speed and impact of their strategy execution but also continuously explore the development of new strategies in response to disruptive events or emerging opportunities. Our research shows how leading companies develop a strategic risk management (SRM) capability to increase their resilience and agility in response to deep uncertainty. SRM takes a strategic, forward-looking perspective and focuses on strengthening processes, people, and practices for purposefully integrating risk into the strategy formulation process. This article offers a framework with three proven configurations of content and timing integration, risk management roles, and leading practices that enable effective SRM.