In Africa’s biggest economy, the risk landscape for businesses is substantially changing in 2022.
Prior to the coronavirus outbreak, the highest concerns for Nigerian businesses across different sectors were the regulatory, foreign exchange volatility and fiscal & monetary policy, however in 2022, there is a growing concern about threats from data breaches, climate change, the great resignation, obtaining talent, lack of inventory among others.
These are key findings of the 2022 informal survey by Forbes, the world’s premier developing markets focused investment research hub which surveyed several risk managers and insurance experts from more than 40 countries including Nigeria.
The survey explained how many Nigerian and global businesses are facing a growing number of challenges which threaten their profitability and possibly also their business models.
“Risks and threats are precursors to corporate crisis situations. Some risks are universal, and pose a threat to every company, while others are relative and depend on the nature of an organization’s business or industry,” Edward Segal, crisis management/communication expert, consultant said in a note.
He advised that no matter which risks or threats apply to a company, it is important that they have an up-to-date crisis management plan in place to deal with the crisis when the risk becomes reality.
Findings from the informal survey conducted by Forbes showed business executives yielded what they thought are the biggest risks and threats that are facing companies today—or that they will face tomorrow.
Data Breaches
Kevin Coppins, the CEO of Spirion, a global software company told Forbes that, “the biggest risk companies will face in the coming year is the risk of having their data breached. Organizations for years have said “it’s not if you’ll be breached, it’s when.”
“The shift we are starting to see accelerate is organizations…experiencing multiple incidents in a single year, and the types of incidents are expanding. This is a direct result of the ever-expanding data universe, accelerated by the global pandemic and the evolving regulations surrounding sensitive data,” he said.
Read also: What Nigeria can do in 18 months to curb inflation, boost economy
Climate Change
David Farkas is the founder and CEO of branding company The Upper Ranks. According to Forbes, he believes “Organizations will face the most significant operational risks in 2022 as a result of natural disasters and extreme weather brought on by climate change.”
“Stakeholders in this risk include an almost limitless number of parties, and the way firms manage or fail to manage the risk is under severe scrutiny. The pressure on businesses to play a role in combating climate change is considerable, and the need to be prepared for the consequences…is vital.’’
The Great Resignation
Brian Wrozek, is the chief information security officer at Optiv Security and an adjunct professor at The University of Dallas. He thought that, “The impact of the ‘great resignation’ will be significant. Many companies and cybersecurity teams will struggle to [start] new projects as they spend more time onboarding and training new resources.
At best, they will tread water and maintain their current cybersecurity maturity. I suspect many will see a decrease in their cybersecurity resiliency as new projects get put into production without proper security and existing procedures get ignored since there just isn’t enough time in the day to complete all the items on the to-do list. Since [current]resources are overtaxed just maintaining the status quo, successful attacks will rise.”
Obtaining Talent
Kim Pope, the chief operating officer of WilsonHCG, a talent acquisition company. She said that, “Obtaining talent is one of the biggest risks facing companies in 2022. The talent market has long been strained. Many organizations were grappling with skills shortages pre-pandemic.
“But now, severe skills shortages aren’t reserved for certain industries – almost all sectors are experiencing them. And changing candidate and employee expectations, rising inflation and a record number of job openings are only exacerbating the situation. This, coupled with the fact that 50percent of people are looking for a career change, means the talent market is more competitive than ever,” she observed.
Pandemic
Rich Rudzinski is the founder of digital technology company Tragic Media and Oversight, a workforce management platform. He said, “The biggest risk that businesses will continue to face going into 2022 are pandemic-related. Whether it is government policies or regulations, things continue rapidly changing as Covid -19 cases keep rising, making it difficult for many businesses and companies to stay afloat.”
Lack of Inventory
Carlos Castelán is the managing director of The Navio Group, a retail consulting firm that advises businesses how to navigate supply chain challenges. He said, “One of the biggest risks for businesses in 2022 will be inventory. Having or not having inventory could be the difference between success and failure during early 2022.
“The first and possibly second quarter of 2022 will be a test of business supply chains and operational capabilities. With shortages of many key components for manufacturers as well as labor shortages – or stoppages in the global supply chain due to Covid – businesses are facing a variety of different headwinds across different fronts.
Burnout
Jay Zigmont, the founder of financial planning firm of Live, Learn, Plan, thought “the biggest risk and threat facing leaders in 2022 may be burnout. Burnout is not a new concept in the business world, but the past few years have put a level of stress on both leaders and staff that may have never been seen before.
“Leaders have had to react faster than ever before and change has been a constant for staff. We are all human and at some point, we all need a break. The challenge is that for many we have been running constantly for two years both personally and professionally. Our home and business lives have been up in the air and people are tired.”
Inflation
Simon Worsfold, senior data manager at Intuit QuickBooks. “Almost all small business owners (97percent) said they are worried about inflation according to a new report from Intuit QuickBooks based on a survey of 2,000 business owners, with 45percent citing ‘rising costs’ as the largest threat their businesses face. To combat this, nearly two-thirds of business owners (63percent) are planning to raise prices over the next three months.”
Financial Crises
Malte Scholz, CEO of product management platform Airfocus said that, “Financial [crises] will impact businesses across all industries [this] year. The pandemic isn’t over and new variants keep disrupting the global market. We have seen plenty of shortages in resources and I don’t expect this to disappear soon.
“The prices have gone up and such an increase will impact most companies, no matter what industry they’re in. The standard will change, costs will increase, and the competition will become fierce. However, the worst thing is the inability to predict how severe the crisis will be. This is particularly hard for startups and smaller businesses that are just entering the market,” he counseled.
Failure to Innovate
Harel Tayeb is the CEO of Kryon, a robotic process automation company. He said, “The biggest risk companies face in 2022 is failure to keep innovating. Even the most successful company that owns the market share in its industry will run into problems if it coasts on its achievements.
“It’s not enough to be the market leader anymore. Companies have to be relentless in their quest for what’s next. What do their customers really need to succeed? How can you solve their problems in a new and better way? The reality is that sooner or later, your competitors are going to figure out how to catch up with you, so it’s essential to be three steps ahead of them,” he concluded.
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