Since we are still at the beginning of the new year, I wanted to summarize the top hurdles that companies had to navigate through in 2016. Much like the Titanic, each risk category below represents a dangerous iceberg that, thankfully, many have been able to avoid thanks to good preparation and processes.

There have already been many studies and reports on this topic and I fully realize that each of the risks mentioned below would have deserved a blog of its own. But my intent here is not to be exhaustive—or scare readers—but simply to share my thoughts on the top risks that companies  faced in 2016 and that they most likely will continue to experience in 2017.

1)Regulatory Pressure

Regulatory change is still top of mind for many executives across the board. And I hope I won’t be disappointing anyone, but it doesn’t seem that the regulatory pressure will diminish any time soon. New and updated compliance guidelines will continue to be published in 2017 and most likely, new regulatory bodies will continue to be created that will also contribute to this regulatory inflation.

2)Uncertain Economic Conditions

The recent election in the US and its outcome, the upcoming electoral period in major European countries, and the unknowns resulting from Brexit will create uncertainty. But also, let’s not forget that the impacts of the Arab Spring are still on-going. Markets, like most of us, don’t like uncertainty as it has a direct impact on short- to medium-term investments.

3)Cyber Threats

Cyber threats are of concern for most companies especially with the emergence of the Internet of Things since it could create more entry point vulnerabilities than even experienced before. And here, allow me to quote Rod Beckstrom, former CEO and President of ICANN and Director of National Cyber Security Center, as I think it summarizes well the state of mind of many CIOs:

The Connectivity of All Things:

Law 1: Everything that is connected to the internet can be hacked

Law 2: Everything is being connected to the internet

Law 3: Everything else follows from the first two laws

4)Loss of Key Talents

To me, a human resource is the most important asset in an organization. Even if the company is fully automated, what would happen if no-one innovates? In a tense labour market, finding and retaining key talents has become a crucial competitive strategy.

Most people think of the impacts associated with loss of productivity, decreased engagement from other colleagues, and the direct hiring cost that results from a talent leaving the organization. But few realize that there will be a cost for on-boarding and training new colleagues, and that newcomers will make errors and will need to adapt to in-house culture. If these impacts aren’t accurately identified, planned and shared, then newcomers have little chance of success.

5)Disruptive Innovation

What business can safely say today that its market can’t be disrupted by a new player? Airbnb was created in 2008 and soon became a major competitor for hotels. Same goes for Netflix and other video-on-demand services that change the way we rent movies. But, to me, the more striking examples are in the automotive and aerospace sectors.

Who would have thought that these two industries (typically very difficult to enter because they require a great amount of technical expertise and heavy assets and investments) could have been shaken up in such a short timeframe by Tesla and SpaceX? The sky is no longer even the limit, it seems.

 

What about you? What were the top risks that your company was monitoring closely in 2016?

I look forward to reading your thoughts and comments either on this blog or on Twitter @TFrenehard