Strategic imperatives and strategic risk management are complementary. Setting up strategic imperatives is one of the first steps an organisation can take when establishing its strategic direction. Strategic risk management will develop naturally from there. A term has been coined for companies which have successfully managed risk while protecting opportunities as they explore and exploit new ones: ambidextrous organisations. These are firms which have in all probability also been able to cultivate a viable, supportive risk culture which enables agility, flexibility and adaptability to a dynamic environment.
As businesses move from a pandemic to an endemic stage in the New Normal, this ability to accept and embrace change quickly looks set to become a strategic global imperative; being change-ready has already proved to be good for organisational resilience. Over the last few decades, the global economy has experienced disruption every few years. Ambidextrous organisations have been able not only to see the disruption approaching, but to turn it to their advantage as well. This foresight and the effective risk management approaches applied have resulted in the recognition and seizing of opportunities which would have otherwise slipped under the radar.
Considering the speed at which situations can change and affect businesses today, developing the capability to recognise such opportunities has become a prerequisite for organisations wanting to maintain their competitiveness and sustainability. But for it to happen requires a parallel change in mindset. Establishing the firm’s strategic imperatives right from the outset will be the first step towards aligning the firm’s strategy with its action plan. It will also be an indication of how the firm intends to reward its shareholders, gain the confidence of its stakeholders, and increase the value of the organisation.
11 The IERP® Monthly Newsletter December 2021