The top emerging risks in 4Q19 all relate to a volatile business environment, according to the latest Gartner Emerging Risk Survey.
Surveyed risk management professionals identified strategic assumptions as the top risk. Executives believe more than half of the time that they and their teams spend on strategic planning is wasted, and the quality of the resulting plans generally does not meet expectations. This is because the assumptions made during strategic planning processes often become outdated or incorrect before execution.
Risk management leaders should participate in strategic planning early to understand organizational strategy and the associated risks. Vigilance is required to ensure that any uncovered risks are seriously considered, monitored and acted on by business leadership.
Learn more: Drive Action on Emerging Risks
Second on the list of top risks is the increased convergence of the cyber and physical worlds. The integration of previously unconnected physical devices or assets with the internet increases organizations’ vulnerability to cyberattacks. Almost 90% of organizations with connected operational technology (OT) infrastructure have already experienced a security breach related to cyber-physical architecture. Despite these threats, organizations may not pay adequate attention to the security ramifications of connecting Internet of Things (IoT) devices, smart buildings and other operational technologies.
Leaders must understand the IoT security challenges, such as poor visibility and understanding, lack of standardization, poor vendor support and security practices, to collaborate with other functions regularly and develop a plan to address them.
Appearing for the first time is extreme weather events. Risk leadership must consider the impact of extended periods of unusual weather and their potential effect on the organization. Oftentimes climate risks are intertwined with other risk areas and require an enterprise-level response.
About the Gartner Emerging Risk Survey
Each quarter, the Gartner Emerging Risks Survey captures and analyzes senior executives’ opinions on emerging risks, and provides actionable insight on identifying and mitigating those risks.
Gartner defines an emerging risk as one that is not materially impacting the organization today, and is highly uncertain because its evolution is rapid, nonlinear or both.
Learn more: Emerging Risk Trends
This article has been updated from the original, published on October 8, 2019, to reflect new events, conditions or research.