‘Rapid Speed’ of Disruptive Innovation Leads Top 10 Risks for 2018

‘Rapid Speed’ of Disruptive Innovation Leads Top 10 Risks for 2018

When asked what concerns them most heading into 2018, corporate board members and executives cite the rapid speed of disruptive innovation, according to a recent survey from Protiviti and North Carolina State University. The accompanying report, titled “Executive Perspectives on Top Risks for 2018,” presents a “top 10” list of risks heading into next year, and tech-related developments dominate the ranking. Cyber-attacks, for example, continue to threaten core operations and brand reputations. At the same time, companies struggle to leverage big data to boost workplace productivity and efficiency, and worry about competition from new “born digital” companies with a low cost-base for operations. A total of 728 global corporate board members and executives took part in the research.

Disruption Ranks as Top Risk

The rapid speed of disruptive innovation enabled by new and emerging technology ranked No. 1 among top risks, as cited by 67 percent of survey respondents. Board members and executives feel that disruption and other market forces may outpace their organization’s ability to compete and/or manage risk appropriately.

Resistance to Change Hurts Agility

There was a three-way tie for the No. 2 risk, as 61 percent of survey respondents selected “resistance to change,” which they said may “restrict our organization from making necessary adjustments to the business model and core operations.” With more industry disruptors than ever, “strategic error in the digital economy can be lethal,” according to the report.

Cyber-Threats Loom Large as a Concern

The same percentage of survey respondents is greatly concerned about cyber-threats, which could damage their brand. This risk continues to dominate as a source of headaches for companies—regardless of their industry or size.

Corporate Culture Stymies Risk Identification

Corporate culture emerged as the third No. 2 concern. More than three of five board members and executives express doubts that their culture can sufficiently encourage the timely identification and escalation of risk issues that may significantly impact the achievement of strategic objectives.

Organizations Are Struggling to Ensure Privacy

Three of five survey respondents cited the need to ensure privacy/identity management as a top risk, as information security/system protection may require significant resources to do so. While cloud computing, social media, mobile tech and other advancements are enhancing the customer experience, they also bring new challenges in securing them.

Regulatory Changes Could Impact Product Delivery

Protiviti reports that 59 percent of board members and executives remain cautious about the potential for regulatory changes and “scrutiny” to heighten. If this happens, the changes could affect the manner in which products or services can be produced and delivered.

Competition for Talent Tightens Up

The lack of available and qualified employees remains a key concern, as 59 percent of survey respondents said difficulties in attracting and retaining top talent may limit their ability to achieve operational targets. Executive leaders must closely examine their existing culture to address this, in seeking to appeal to younger job candidates who expect the latest tech tools and the opportunity to create and innovate.

Big Data Not Always Translating to Productivity Gains

The inability to utilize data analytics and “big data” to achieve market intelligence and increase productivity and efficiency was cited as a top risk by 58 percent of survey respondents. In the modern age, “knowledge wins” via advanced analytics provide a distinctive edge in the marketplace.

Uncertain Economy Could Restrict Growth

Protiviti indicates that global economic conditions for the immediate future weigh heavily on the minds of 58 percent of board members and executives. Specifically, they’re worried that these conditions could severely restrict growth opportunities.

Upstart Competitors Threaten to Do More With Less

Lastly, 58 percent of survey respondents admitted that their existing operations may not be able to meet performance expectations for quality, time-to-market, cost and innovation. They’re particularly concerned here about keeping up with new competitors that are “born digital” with a low cost-base for operations.