Why Companies Keep Getting Blind-Sided by Risk
Why Companies Keep Getting Blind-Sided by Risk: You’d think. Yet three quarters of the 195 large companies surveyed recently by APQC got hit by an unexpected major supply chain disruption in the last 24 months. We are talking here about an unforeseen event involving a physical asset owned by the enterprise or a third party. Major means an event that has the potential to severely interrupt a business’ ability to deliver on its promises to customers — perhaps a power station for a vital assembly plant going dark for months. Survey responders (mostly supply chain risk operators) said things got so bad that C-suite executives had to get involved in the fix-it process for a sustained period of time.
But these are the same senior executives and middle managers that have supposedly been embracing formal enterprise risk management (ERM) for some time. Why did these systems fail so spectacularly?
Part of the problem stems from the familiar gap between the talk and the walk.