Strategically managing risk in the information age: a holistic approach

Abstract

PurposeBusiness leaders can apply key messages as early as today to build stronger operations that are less susceptible to risks of all types. Findings can be applied at all levels in any organization, from the entire enterprise down to discreet projects. The article emphasizes that today's strategic change initiatives should all consider their impact on holistically developed risk management strategies.ApproachHypotheses are explained, developed, and supported by a number of actual cases across several diverse industries. Case studies that illustrate both success and failure are explored. Once the hypotheses are developed and supported with specific cases, the findings are generalized and a series of well‐developed industry accepted practices for resolving the key issues are articulated.FindingsThe way a business approaches risk management in today's digital age can make the difference between success and failure. Risk management strategies should be developed with holistic, broad views of business operations, and tailored to accommodate the different types of exposure specific to an individual business or operation.Originality/valueThis article illustrates the importance of having holistic, well‐developed risk strategies with real‐world cases and industry‐accepted practices. Where information‐age risk management strategies were employed, companies succeeded. Other cases were not so fortunate. One especially counter‐intuitive notion is that businesses have traditionally developed external alliance networks to reduce risk and create differentiated business models that lock‐in customers and lock‐out competition. However, as many businesses are experiencing, integrating alliance partners into otherwise low‐risk value chains actually introduces new risks that have been largely ignored until recent years.