COVID-19 and its continued impact will remain a significant risk for businesses for some time to come. However, this is not the only influence that organisations need to bear in mind as we look ahead to the rest of 2021. It’s essential to ensure that forward thinking resilience plans and strategy are designed for survival - and growth - as well as taking into account new requirements, such as that increased focus on employee wellbeing. With that in mind these are the top 6 business risks for the year ahead.
Civil unrest and social discontent. From inequality to the increasing distrust of political elites and the rise of ‘fake news’ we have begun to see an unraveling of the social contract that has provided societal cohesion in recent decades. This could create more challenges in the future, especially this year in the aftermath of the Trump presidency and the impact of COVID-19, leading to greater political fragmentation and public upset.
Natural disasters and extreme weather. This is something that we have seen more of in recent years with flooding and fire just two examples. It’s essential that organisations are prepared for natural disasters that could increase in both frequency and severity over the next year or so.
Divisive politics fueled by social media. We have seen complex social and political issues being over simplified and misrepresented via social media networks - and then widely spread and absorbed. This is likely to get worse over 2021 and could lead to increased political divides, especially where culture conflicts are the most pronounced.
Dissolved communities. Lockdowns and tier restrictions have created even worse issues with respect to isolationism and have played a big role in dissolving communities. As a result we may see a rise in crime numbers and attacks being perpetuated by lone wolf type figures who feel disconnected and outside of social structures.
Disruption to supply chains. The lack of resilience in existing supply chains was brought into sharp focus on 2020 with shortages being triggered by COVID-19 restrictions. Now that Brexit has happened there have been other similar wobbles and we have been alerted once again to the precarious balance that exists underneath our global economy and how easily this can be upset. Disruption to supply chains is a substantial operational risk factor and one that needs to be carefully examined for the year ahead with a view to building in greater ongoing resilience.
The cyber threat. Today every organisation is a potential cyber attack victim, from small businesses through to large governmental organisations. In years gone by this threat has been viewed as originating from bad actors and third parties but today potentially pits one government against another. Cyber attacks can be catastrophic for businesses and are one of the most serious risks for the year ahead.
Effective risk assessment and management is an essential part of the process of building resilience into a business to enable it to survive and thrive. These are some of the most serious risks to note for 2021.