Risks and Opportunities: The Big Picture in View

Companies are constantly faced with new challenges – just look back at the effects of the Corona pandemic or the extreme weather events of recent weeks and years, or consider the ongoing issue of the shortage of skilled workers. There are also individual business decisions which sometimes have a serious impact on the company. It would be risky to neglect the risks and opportunities associated with these and other challenges. A holistic approach to risks and opportunities involves far more than just analyzing the technical risks associated with product development and manufacturing.

Dealing with risks and opportunities is part of everyday business life: on the one hand, because management systems, e.g. in accordance with ISO 9001, explicitly require risk-based thinking and dealing with risks and opportunities. Secondly, because this is the only way for companies to react quickly and appropriately to threats and seize opportunities - ideally before competitors do.

To come back to the examples above: Flooding or, more generally, the consequences of climate change do not stop at companies, of course. The coronavirus pandemic and the measures taken to contain it have caused uncertainty worldwide, for example with regard to last-minute staff absences or the restricted ability to travel. And the shortage of skilled workers is threatening staff shortages – or at least numerous companies are having difficulties finding new skilled workers.

However, the examples mentioned above also show that risks and opportunities are often mutually dependent: At the peak of the Corona pandemic, many companies recognized the opportunities that the shift towards mobile working brought with it and took advantage of them: for example, they pushed video conferencing solutions or cloud services.

Growing ecological awareness as a result of climate change gives the industry the opportunity to push ahead with technical innovations for sustainable business and to promote the responsible use of natural resources, for example through “green” IT. Last but not least, a shortage of skilled workers is prompting numerous companies to take advantage of the opportunities offered by a strong employer brand and improved working conditions.

As indicated above, the examples mentioned are just a few of the (external) influences that the economy is confronted with – after all, economic conditions are also constantly changing. The resulting risks and opportunities must of course be considered individually for each company. This applies all the more to issues that only affect a specific market or only the company itself: Is it worth entering the market in a particular country or do the anticipated risks outweigh the opportunities? Are there developments that make a case for expanding the relationship with a particular business partner – or would it be better to break it off because it would be too risky to continue?

It can therefore be seen that a consideration of risks and opportunities goes far beyond the consideration of technical risks in product development and production. However, this does not mean that such technical risks are less important – it is not for nothing that dedicated tools such as the proved FMEA exist for this purpose.

However, recognizing and assessing risks and opportunities is not enough: a holistic approach also includes deriving specific measures and, if necessary, strategic decisions. Accordingly, it is also necessary to integrate risks and opportunities into the management system and the corporate strategy.

In addition, topics such as occupational health and safety may also come into focus, where hazards need to be managed and overcome.

At the same time, everyone involved should be aware that companies, their environment and the challenges they face are constantly changing. The same applies to the corresponding risks and opportunities. It is therefore not enough to analyze all conceivable risks and opportunities once: Rather, the assessments and the resulting decisions should be reviewed on an ongoing basis.

And because no department stands alone and no company can do without business partners – but rather is part of a supply network – a holistic approach to risks and opportunities also includes communicating them. Only in this way can all those involved in the company make well-founded decisions that take risks and opportunities into account.

A holistic approach not only helps to meet standards such as ISO 9001: Potential problems can be identified at an early stage and measures can be introduced to rectify them on the basis of well thought-out decisions. On the other hand, opportunities to innovate and optimize the performance of your own company can be exploited – also and above all with a view to quality, continuous improvement and corporate success.