Top Risks for 2021 and 2030 - Consumer Products & Services Industry Perspectives
Lingering Effects of Pandemic and Operational Challenges Are Top Concerns for Consumer Products and Services Organizations
The continuing global challenges and potential existential threat posed by the ongoing COVID-19 pandemic. Political divisiveness and polarization. Social and economic unrest. Gridlock. Artificial intelligence (AI), automation and other rapidly developing digital technologies. Rapid shift to virtual, remote work environments. Changes in the geopolitical landscape. Shifting customer preferences and demographics. Fragile supply chains. Wildfires and hurricanes. Volatile unemployment levels and record low interest rates. Escalating competition for specialized talent. Immigration challenges. Cyber breaches on a massive scale. Terrorism. Big data analytics. Future of work.
Read 2022 Industry Top Risks
These and a host of other notable risk drivers are all contributing to significant levels of uncertainties, making it extremely difficult to anticipate what risks may lie just over the horizon. Unanticipated events are unfolding at record pace, leading to massive challenges to identify the best next steps for organizations of all types and sizes, regardless of where they reside in the world. No one is immune to the significant levels of uncertainty, and C-suites and boards need to be vigilant in scanning the horizon for emerging issues. Because no one can possibly anticipate everything that lies in the future, organizations must focus on building trust-based, resilient cultures, led by authentic leaders, that can pivot at the speed of change.
In this ninth annual survey, Protiviti and NC State University’s ERM Initiative report on the top risks on the minds of global boards of directors and executives in 2021 and, in a new dimension to this study, over the next 10 years, into 2030. Our respondent group, which includes 1,081 board members and C-suite executives from around the world, provided their perspectives about the potential impact over the next 12 months and next decade of 36 risk issues across these three dimensions:
- Macroeconomic risks likely to affect their organization’s growth opportunities
- Strategic risks the organization faces that may affect the validity of its strategy for pursuing growth opportunities
- Operational risks that might affect key operations of the organization in executing its strategy.
With the clouds imposed by the pandemic, it is more difficult for Consumer Products and Services companies to see the future ‘new normal’ and how fast it will arrive. Traditional trends and patterns used in the past to predict demand and growth have been obscured, forcing industry players to place their bets on multiple sales and marketing channels, invest in digital capabilities, including e-commerce and shopping platforms, improve data analytics to better understand their customers and behaviors, rethink their supply chain strategies, train employees in the skills required to serve consumers in the digital economy, and reimagine branding strategies.
Given the uncertainty over how long it will take for the industry to return to pre-pandemic normal, airlines are adapting to the new business realities. We can expect the industry to consolidate, offer fewer flight options, and possibly experience a permanent haircut in business travel. International and leisure travel as well as hub and spoke routes will take time to recover. With excess capacity and rising cargo yields as shoppers turn to e-commerce, we can expect continued conversions of wide-body aircraft to service air freight demand. All of these and other factors impact the industry’s fundamentals, and ultimately the percent of employees who will be returned from furloughs.