Companies that embraced the crisis responded better, finds BDO
BDO has released the latest edition of its Global Risk Landscape – an in-depth study into how business leaders have adapted to the crisis and how they preparing for the risk landscape in the ‘new normal’. Marita Corbett, National Leader for Risk Advisory at BDO in Australia, walks through the report’s key findings.
The report shows that family businesses and leisure and retail companies experienced the brunt of the crisis, with 37 per cent, 22 per cent and 22 per cent respectively saying the impact was “worse than they had anticipated”. The professional services sector felt the least impact from the pandemic, with just 3 per cent of respondents stating the impact had been “much worse” than expected.
While companies faced many risks in 2020 – with geopolitics, economic slowdown and increasing competition all showing major upticks – it was the geopolitical risks that caused the most pressure for all companies globally in 2020.
One major finding: companies that embraced the crisis responded better. Leaders who were able to make fast, effective decisions were better able to pivot business models and keep staff up-to-date and motivated. Others suffered from decision paralysis, as they waited and relied upon news to inform their next steps.
Around a quarter of business leaders admitted they did not adapt to the pandemic as quickly as they could have, with 60 per cent citing “uncertainty or lack of clarity” as the reason.
The manufacturing sector was the quickest to react and adapt, with many manufacturers pivoting early to make essential products such as ventilators and personal protective equipment. One in four manufacturers said the pandemic’s impact was “less” or “much less significant than they expected”.
Leadership not surprisingly played a key role in building resilience and agility. Leaders with a positive mindset, who did not give in to blame culture, were able to steer their companies through the Covid-19 pandemic and survive – and in some cases even thrive.
Looking ahead, 90 per cent of business leader surveyed said the events during the corona pandemic have triggered them to completely re-evaluate their company’s risk framework. The pandemic has also strengthened the relationship between technology and risk management. The use of up-to-date technology is essential to evolve risk management from being just reactive to proactive and predictive.
BDO’s Global Risk Landscape surveyed 500 C-suite executives working across all major industries at companies based in Australia, Asia Pacific, Europe, the Middle East, Africa and the Americas.
