Noting that companies around the world face more risks from more sources than ever before while also grappling with rising health care costs, talent shortages and other human resource problems, Greg Case, president and chief executive officer of Aon, provided the membership of the Detroit Economic Club with a global perspective on dealing with two of the biggest challenges facing businesses in today’s economy: risk and people.
In his remarks, Case said, “Risk has always been a fact of business life, but today, the magnitude, complexity and speed of risk have increased exponentially. Companies face infinitely more risk than ever before, and the time to respond has shortened.”
Case cited Aon’s 2013 Global Risk Management Survey, which showed that risk managers are struggling to identify and manage the major risks facing their organizations, which include economic slowdown/ slow recovery, regulatory and legislative changes, and increasing competition. “An even more important finding,” Case noted, “was that the percentage of companies that reported being ready for these risks dropped significantly; from 66 to 59 percent, from our previous survey in 2011.”
Making the connection of managing risk and people, Case said, “How many companies have solved the issues of an aging population? The risks of retirement costs, pension costs and health care? The risk of losing their most experienced employees? Collectively these issues disrupt lives and create huge volatility on the balance sheet.”
He encouraged the audience of nearly 300 local business leaders “to think about risk in a different way. The desire to take on risk and the ability to understand risk is a fundamental driver to growth in our global economy.
“Yes, as the world continues to change, so does the global face of risk. Misunderstanding it can be fatal – specifically underestimating the magnitude, complexity or speed of risk. That being said, the successful firms will be the ones who understand that risk is married to innovation, exploration and expansion. They will be the ones that understand that proper risk management provides an opportunity to grow and prosper.”