The 2021 BDO Global Risk Landscape report is now available, providing an overview of responses to critical business challenges faced around the world. In compiling the data, we found that New Zealand’s response to COVID-19 has put us in a different position to most, and so we put together an accompanying overview – Scaling Uncertainty - to translate the global report into a collection of key insights tailored for Aotearoa businesses.
What did the 2021 BDO Global Risk Landscape report find?
If the past year has taught us anything, it’s that the unexpected can and will happen. But the unexpected poses an unusual challenge for businesses—how can we best prepare for a challenge when we don’t have all the necessary information?
The 2021 report opens with reference to the “wicked problem”, a term from game theory that defines a problem which is impossible to completely understand. No matter how long you wait, or how much you observe, the problem never becomes completely clear, and never offers a clean divide between right or wrong solutions. This describes the last year of business. Our primary discovery in the report is that there is a common thread among the businesses that overcame this “wicked problem”, which means there is a path to success for businesses looking to prepare for the “wicked problems” of tomorrow.
The importance of a ‘risk-welcoming’ attitude
That common thread is an agile mindset. Businesses that adapted to the situation quickly, even without the full picture, proved more resilient, and our survey found that these businesses were more likely to perform this way if they had already developed a ‘risk-welcoming’ attitude.
Developing this mindset isn’t easy, because a more conservative approach is instinctual. Before taking the next step, leaders wanted clarity on the problems they were facing. That’s why the global report is called “The art of the unknown”; because clarity never came, and waiting for information proved more of a risk than making quick decisions with incomplete information. “The art of the unknown” is the skill of wading out into uncharted waters and being decisive in the face of uncertainty.
Key insights for New Zealand businesses
In Scaling Uncertainty, we’ve taken the most relevant insights from the Global Risk Landscape report, aiming to make clear how NZ businesses can develop a risk-welcoming attitude, and what challenges are most likely to come next for us here in Aotearoa.
This overview highlights a few of the biggest challenges that are forecasted for NZ businesses, including the current skills/labour shortage, the increasing value of investing in data analysis and other technology, and the already critical importance of tackling Environmental, Social and Governance (ESG) issues.