New Deloitte Thought Piece on Disruption Outlines How Companies Can Navigate Business Threats in a Volatile and Uncertain Market

Capitalizing on Risk to Create Opportunities - A Forward-Thinking Guide for Executives

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Oct 14, 2014, 09:00 ET

NEW YORK, Oct. 14, 2014 /PRNewswire/ -- Deloitte today released "Deloitte on Disruption," a commentary that examines why business leaders often fail to act in the face of strategic risks and includes counsel on how to embrace strategic risk, rather than simply avoid it.

In today's volatile, uncertain, complex, and ambiguous environment, companies face increasing demands and business model threats. Strategic risk has the potential to disrupt a company's strategy and destroy a market position that took generations to build. From prosthetics makers watching the rise of 3D printing, to the increase in collaborative consumption in the automotive industry, organizations in all industries need to actively sense the future and respond accordingly.

"We see time and again companies brought down — even destroyed — because they failed to spot and prepare for strategic risks," said Andrew Blau, managing director, Strategic Risk Solutions, Deloitte & Touche LLP. "Despite this reality, many executives find strategic risk especially challenging. It's often not clear where to look for early indicators when signals are weak and there is no real precedent."

WHAT SMART COMPANIES WILL DO
Strategic risks are unlike other business risks in that they're not just something to mitigate. Spotted early and managed well, a potentially fatal threat can actually point the way to new markets or the next big opportunity. Smart companies:

Accelerate discovery – Companies that create regular, systematic mechanisms to accelerate the pace at which they discover sources of surprises are better equipped to identify and assess potential strategic risks in time to act. These companies bring in fresh thinking from the outside and learn from people with different experiences and perspectives.
Scan ruthlessly – Smart companies create dedicated programs for trend analysis and future scanning to surface subtle indicators of change that often points to new opportunities.
Confront biases – Organizations often fail to act due to normal human limitations, as well as institutional factors such as organizational siloes and the sheer complexity of day-to-day operations. Leading companies will incorporate insights from behavioral economics and cognitive science to pinpoint what prevents executives from identifying and acting on risks.
Prepare for surprise – Although no one can predict the future, forward-thinking companies plan for it. Participating in scenarios and learning experiences can equip companies with the right tools, empower executives with the best insights, and help to implement optimal solutions when taking action.

"It is increasingly difficult to predict shifts in the market and unseen innovations, particularly since it is typically not one event but rather a series of linked events that ultimately make a product, service or company outdated," said Michael Kearney, managing partner, Strategic Risk Services, Deloitte & Touche LLP. "This uncertain landscape suggests that even the most successful companies can benefit from identifying and acting on strategic risks earlier to turn uncertainty into opportunity."

For a complete copy of Deloitte on Disruption, go to http://www.deloitte.com/us/disruption.

About Deloitte's Strategic Risk Services
Strategic Risk Services, part of Deloitte's Risk Advisory practice, provides consultative and managed services as well as one-day interactive labs to help C-suite executives, boards and decision-makers identify, assess, manage and respond to strategic risks and major crisis events. An understanding of strategic risks and their drivers, in combination with leading-edge tools and methodologies, allows Strategic Risk Services to help clients better protect value, drive performance, meet strategic objectives and seize competitive advantage. Crisis management specialists help companies sense, prepare for, respond to and emerge stronger from major crises.

As used in this document, "Deloitte" means Deloitte & Touche LLP, a subsidiary of Deloitte LLP. Please see www.deloitte.com/us/about for a detailed description of the legal structure of Deloitte LLP and its subsidiaries. Certain services may not be available to attest clients under the rules and regulations of public accounting.

SOURCE Deloitte