Predicting the future to ensure a company’s resilience
The importance of risk management
From day one, human beings have constantly tried to predict the future. To this end, they have relied on methods varying from the empirical (see science) to the abstract (see magic), but the impulse has always been to manage uncertainty and react proactively to changes in the environment.
Today, this management of uncertainty remains a challenge in society. It is both a source of concern and point of focus for everyone from families and small local businesses to governments and large international corporations. The recent situation generated by inflation in the world economy is a prime example. It has led to flagging purchasing power, deteriorating product and service margins, devalued savings accounts and a long list of consequences affecting individuals and companies alike. Steps to mitigate the impact of risk and ensure the future of society are therefore essential.
Another example of global risk that has affected and continues to affect society at a cross-cutting level is the Covid-19 pandemic. No one predicted this change in context, and it has forced the business world, as part of society, to constantly adapt to respond to the various threats posed by the pandemic. In this situation, innovation has been a key part of the process: companies that quickly found alternative ways of meeting, operating and reconciling work and personal life were incentivised, and new ways of interrelating, new operating models and a democratisation of remote working ensued.
In any case, with risks involving everything from environmental issues like climate change and biodiversity loss to technological ones such as the digital divide and cybersecurity failures, runaway inflation and Covid-19 are only a small part of the iceberg of risks that can wreak havoc at every level and in every area. All are uncertain situations that, with optimal management, can go from threats to windows of progress. It is therefore essential that the business community should be capable of changing this paradigm and serve as a catalyst for these windows of progress generated by the uncertain and volatile environment in which we live.
At the end of the day, keeping the business ecosystem ahead of the fast-changing world may not be easy, but it can be done. “Risk management has an impact on the Group’s value chain, so situations that compromise the company must be constantly identified, analysed, evaluated and monitored. In this way, with early detection and a response strategy to manage these threats, they can be reduced”, says Andrés Toribio, Global Head of Quality & Risk Management at Cellnex. “And no, the key is not in a crystal ball that predicts the future, but in developing a robust and dynamic risk management model that guarantees efficient management of uncertainty”, adds Toribio.
With an optimal risk management model, a company minimises its exposure to uncertainty by efficiently monitoring the risks that surround it and making real and valuable information available to senior management for strategic decision making. This creates “the opportunity to maximise the company’s resilience, which leads to a context of stability that generates stakeholder confidence and favours a proactive process of continuous improvement”, explains Toribio.
With this goal in mind, Cellnex’s Quality & Risk Management department is implementing a Strategic Risk Plan that uses a comprehensive management model to ensure optimal monitoring of risks and controls throughout the company. “The model integrates all the Group’s professionals and promotes two-way communication, which makes it possible to identify risks with optimal timeliness and form, and to effectively mitigate them”, says Toribio.
Under the umbrella of this Plan, in 2021 the company created the Due Diligence and Human Rights Risk Impact Assessment process, which the Sustainable Excellence Club, the benchmark business association for sustainable business development, incorporated into the seventh edition of its ESG Investment Observatory recently. The goal of this analysis was to update the business strategy and give it practical tools to assess, review and monitor adverse human rights impacts along the entire value chain.
By implementing the Risk Management Masterplan, Cellnex increases the value it generates for society and its stakeholders through innovative and quality management of shared network and telecommunications infrastructure service provision and, as Toribio adds, by “integrating efficient and transparent risk control into the Group’s culture and processes”.
Ultimately, if we have learned anything over the years, it is that context is variable, and the future is uncertain. This makes predicting the future difficult but reducing the impact of uncertainty is a matter of comprehensive risk management that involves the entire company.