Make your ERM strategies proactive instead of reactive. Risk management processes shouldn't just include identifying risk when it occurs—they should also include using predictive insights to understand what types of indicators might suggest that a risk event is going to occur in the first place.
Let's take a look at financial risk. Admittedly, no company is going to call you in advance to give you a heads-up that they’re about to declare bankruptcy...but this doesn't mean it's impossible to predict. It just means that you have to do your own homework, and you have to know what to look for. In our experience at riskmethods, we’ve found that there’s a combination of signals that often occurs before a company files for bankruptcy. For example, is a CFO stepping down? Is a major shift in the structure of the company occurring? Are shareholders selling or transferring shares? Are there employee strikes or product recalls? These kinds of things don’t happen for no reason. So if you get news that this kind of change is in the works, here’s my advice: Take notice, and understand what ramifications it might have on your own company if this partner becomes financially unstable.