Right now is a highly unstable time for businesses. There is widespread optimism due to the booming global economy, but there is also widespread uncertainty about the political and economic future. That leaves businesses wondering whether to act boldly or cautiously. It also forces them to rank potential threats from most to least urgent.
As companies consider which threats to make their biggest priorities, some unlikely contenders rise to the top of the list. It's logical to think that things like new regulations, disruptive competitors, or trade turmoil would be the biggest threats. Surprisingly, though, the global business community didn't rank these threats highest on their list of concerns.
The World Economic Forum's "Global Risks Report 2018" exhaustively explores the most urgent threats facing today's businesses. The report draws on annual survey responses from academics, business leaders, and policy creators, and they overwhelmingly agree that today's two biggest threats are cybercrime and climate change.
Data breaches and changing weather patterns may not seem like the most pressing concerns for business leaders, but they occupy the top two spots for a reason. These are the threats most likely to affect the broadest number of businesses, and they are apt to have the most damaging consequences, too. That means any company that is not actively planning for these risks right now is essentially a sitting duck.
Rather than writing these threats off as irrelevant or unavoidable, take action to prepare your company for these threats. Acting early and effectively will prepare your company to bypass the worst consequences and minimize any impacts you do face. Follow these overarching strategies to battle against both threats at once:
Stay Ahead of the Curve on Cybersecurity
The reason cybercrime is a major threat is not that companies don't take it seriously enough. Most companies are genuinely worried about the possibility that data could be stolen or their website hacked, and they invest heavily in cyber protections as a result. The mistake companies make is thinking that once those protections are in place, they are adequately defended from now moving forward.
Noah Webster, general counsel of the email security firm Zix, cautions against this "mission accomplished" mentality, saying: "Cybersecurity is not a static program. Consistent review of your cybersecurity policies and practices is critical for adapting to new regulations, identifying issues, and enhancing your security posture." The ever-changing nature of cybercrime means that today's protections can quickly become tomorrow's weaknesses.
Cybersecurity is no longer just an IT issue. It's also a legal and regulatory concern and one that potentially creates existential problems. Companies must begin by acknowledging the scope of the problem and the likelihood that their current defenses are inadequate. Then they must commit to expanding and improving their cybersecurity on a constant basis. Preventing a catastrophe is going to be a major challenge, but it's a lot easier than trying to recover from one.
Anticipate Uncertainty Around Climate Change
It does not matter what size your business is or what industry you operate in: Climate change is going to affect your future, and it's going to happen a lot sooner than you expect. Since 2000, we have experienced some of the hottest years on record, according to the World Meteorological Organization, we are seeing unpredictable and destructive events as a result of rising temperatures. Fires, floods, and storms all have the potential to affect businesses directly, and even when they don't, these disasters could affect their suppliers, clients, or critical infrastructure.
Jeff Smith, a veterinarian whose practice survived a massive California wildfire, stresses the importance of being proactive. "I really can't overemphasize the idea of being prepared, and that doesn't mean just having a first aid kit in the back of your car." Climate change is not just an annoyance or an interruption. It's something that could leave an office in ashes and a business in total ruin.
Preparation starts by analyzing what aspects of climate change are likely to affect your business and what impact it could have on customers and suppliers. Part of that strategy over the long term might be that businesses should move away from volatile locations and even try to eliminate locations entirely. Taking steps such as moving business processes online and relying on a distributed workforce ensures that no matter how bad climate change gets, it can't hit a company at its core.
These are not distant threats. The choice is between hoping to get lucky and avoid a catastrophe or taking your company's fate into your own hands.