Friday, July 15, 2011

Strategy, Governance and Risk

With the recent financial melt-down, deep economic recession, and continuing drag on revival and growth, the logic would dictate that companies will focus on their business strategy to identify what makes them a winner, where does the value come from, and also focus on governance to promote risk awareness and planning. However, McKinsey Quarterly finds otherwise: In a survey of the company directors, they find that boards neither understand their company strategies any better, nor have they improved the governance.

Without these commitments from the corporate leaders, business growth and risk mitigation may continue to suffer.
This is really disconcerting not only because a lack of executive focus on strategy can reflect any number of leadership issues that can cripple corporate growth, but a lack of focus on risk can actively lead to corporate disaster. With 32% of boards admitting “limited or no understanding” of the risks their companies face, the role of supply chain executives becomes even more important. While a corporation faces all kinds of risks from credit to government policies, supply chain disruptions one of the most probable risk that corporations need to understand and plan for. Because supply chains cover such a large part of their operations and the effect of any disruption is immediate and intense. Fortunately, this is also one of the most studied, talked about, and well-understood risk for corporations that are supply chain pioneers. For more on the subjects, follow the links to related articles below.
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© Vivek Sehgal, 2011, All Rights Reserved.

Want to know more about supply chain processes and supply chain strategy? Check out my books on Supply Chain Management at Amazon.

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