212. What existential threats might the business face? (Question #10)

This season, every episode of OMG focuses on a question that directors really need to answer.
OMG is written, produced, narrated and scored by Matt Fullbrook.
 
TRANSCRIPT:
Question #10: What existential threats might the business face? Considering how obsessed I am with corporate governance, it’s a bit strange how little I focus on risk, huh? I’m about as far as possible from being a technical expert in risk – like an actuary or whatever – but still, I’m not going to try to deny the relationship between risk and governance. I mean, we obviously don’t have effective conditions for making a decision if we lack awareness of the stuff that might go wrong and the probability that those things might happen. In a way, today’s question is an element of question 9 from the last episode. In other words, we don’t really have a deep understanding of the business if we don’t understand the stuff that could, y’know, kill the business. Let me be clear, there is no way to know everything. We like to judge leaders in hindsight for not predicting the unpredictable. We similarly like to put leaders on a pedestal for being super frickin lucky. So, I’m not talking about doing the impossible. I’m just talking about investing in the study of the potential fatal flaws of our business model, structure, competitive positioning, physical or geographical positioning, etc. What is it about what we do, how we do it, who is doing it, and where we do it that might leave us vulnerable to a killshot. Work hard at this question. Poke and prod every potential flaw, and even every area of apparent strength – even just to prove that it is indeed as strong as you thought. Every company has vulnerabilities. When you identify one, it raises more questions like, “what might it take to shore up our defenses, and is it worth it?” Because you may just choose to leave the flaws as is. But it should be a choice! And having that choice starts with asking the question.