A report from the World Economic Forum
Extreme weather events and natural disasters have topped the list of perceived risks to New Zealand in the World Economic Forum’s Global Risks report for 2018. This replaces the economic concerns that once dominated businesses after the 2008 financial crisis.
The research is taken from 1000 senior business leaders from the World Economic Forum’s global network. The failure to adapt to climate change and man-made disasters are of key concern. The other top global risks were:
- economic risks
- cyber attacks
- geopolitics (primarily, concerns about political or economic confrontations between major powers).
Are you surprised that natural events top the list?
The media brings natural disasters to our screen from around the world, in what seems frightening frequency. Last year’s major disasters saw hurricanes Harvey and Irma in America, and Maria in the Dominican Republic, earthquakes in Mexico and on the Iraq-Iran border, a monsoon in Bangladesh, flooding in Sierra Leone, and drought in the Horn of Africa. Many smaller-scale disasters took place and some even affected New Zealand.
I believe that some of these natural disasters are influenced by the steadily, accumulating effects of climate change (which I explored in sustainability in 2018 and beyond). These events disrupt the normal running of businesses and every-day living. Planning strategies for natural disasters, as well as having home-survival kits for employees, can help gain back a little control that these unexpected events disrupt.
Big data and cybersecurity
There are 8.4 inter-connected devices globally. About 90% of the world’s data was created in the past two years. The headache of managing it, keeping safe and ensuring it is useful and able to be extracted by those who need it is a real issue. You’ll notice many companies (BDC included) aligning their privacy policies with the latest European General Data Protection Regulation which came into effect on 25 May 2018. While most New Zealand businesses don’t interact with countries in the European Union, all businesses can take this opportunity to review privacy frameworks, ensuring practices are up to standard.
In a recent article, Forbes outlined the ‘catastrophic costs’ to a business that experiences a data breach. It is more than just the direct cost. The real cost is damage to shareholders and investors perception, loss of data and brand damage. Scary stuff.
“Trust but verify.” – Ronald Reagan
The Global Trust Index (also known as the Edelman Trust Barometer) is an average of a market’s (country’s) trust in their government, business, media and NGOs. The level for 2018 remains at ‘distruster’. This means that 20 out of 28 countries identified as ‘distrusters’. This is up 1 place from 2017.
We are becoming very aware of fake news generated about a person, company or events. Media is defined as both content and platforms (social media, search engines and news apps) and is now the least trusted institution. Trust in platforms has declined overall (do we trust what Google says?), while trust in journalism is on the up.
This is an important development for businesses that are producing and publishing so much online content. There is increasing expectation that companies operate with integrity, uphold values of honesty, and ensure transparency and fairness. Businesses must safeguard customers privacy and have CEO’s that uphold building trust in all operations and relationships as their number one priority.
Case study: Netflix
Netflix is a company that has maintained trust as the most important company value. They trust that their employees will do what they think is best for Netflix in everything they do; they believe that people thrive on being trusted; they believe that withholding opinions or feedback is a negative trait. Employees are encouraged to give and receive feedback as a normal part of work life and to “only say things about a fellow employee that you say to their face.”
How similar to Netflix is your company on the issue of trust?
Bringing it closer to home
If all of the above seems a bit too scary and large, then some of the outcomes from the recent Aspire Conference in Nelson and further research states that top concerns for businesses are:
- becoming more innovative, while maintaining control
- understanding the changes and effects of global markets and cultures
- the uncertainty that things will not continue as they have before
- changes in the new government’s policies and regulations
- planning for technology advancements
- fostering diversity
- minimising unnecessary complexity in business
- information overload
- keeping supply chains lean
- developing strategic thinking and problem-solving.
What business consulting experts say (this is interesting):
Joe Calloway says “Nobody cares what you say about your business anymore. They care about what your customers say about your business.” 84% of people read product reviews online before they buy”
Randy Pennington says “The Boomers will leave….” taking their knowledge with them. “Faster, better, cheaper, and friendlier are the four most used words for every part of your business”
Scott McKain says “businesses need distinction in the marketplace so that customers can tell a difference between you and the competition.”
Mark Sanborn says “customer expectations will increase. Businesses need to add value without spending too much to do it.”
What can your business do?
The big question. Hopefully, the above points give some insight into the big issues facing businesses today – globally and in New Zealand. Be aware of the issues and have a star team that is equipped with skills such as creative thinking, adaptability, curiosity, honesty and problem-solving. This will go a long way in helping to plan, prepare and adapt to the future. Better than crossing your fingers.
Written by Chantell Bramley