As somebody who takes a keen interest in global events and developments, one of my annual ‘must read’ reports is the World Economic Forum’s Global Risks Report.
It is largely aimed at policy-makers and considers risk on a macro level. However, it also provides useful insight for businesses on the external environment and the development of risk management practice. In that vein, I was struck by this comment in the report:
’Over the past decade, risk analysis has moved from risk identification to thinking through risk interconnections and the potentially cascading effects that result’.
This is not just true for governments and policy-makers. All organisations need to embrace this more connected view of risk.
Globalisation and digitalisation are transforming businesses. One outcome of these megatrends is the development of the ‘open workforce’. This term describes how organisations today rely on a more dynamic talent base. They draw increasingly on ‘external talent’ such as suppliers, contractors, freelancers and outsourced service providers, in addition to their employed staff.
Our recent CGMA report New Ways of Working explores what this trend means for organisations and how they need to change their management practices to achieve long-term success.
Alongside effective performance management and decision making, it’s clear that organisations also need to be on top of the risks arising from a more complex open workforce. They must take a broader and more interconnected approach. The report found that there was room for improvement. Organisations do recognise the potential risks such as information and data security breaches. However, a lower than expected percentage (30% or less) of those we surveyed identified cultural mismatches and communication difficulties. The additional worry is that organisations are not joining the dots between all the risks arising from the open workforce, thus risking further brand and reputational damage.
CGMAs have an opportunity to play a pivotal role in helping organisations make these connections. One of our aims with the New Ways of Working report was to take an external megatrend affecting business and show how CGMAs can address these challenges, so it includes a useful toolkit of questions around managing the open workforce.
We’d love to hear from you about your experiences of managing the open workforce. Are there other megatrends that you are currently grappling with as well, which can help inform our future work programme?