| Tom Roche at FM Global examines an approach designed to provide vital company protection for the long term as new risks emerge
All companies take risks – it’s a natural part of succeeding in a competitive business environment. In the pharmaceutical business, as in many others, it’s part of the art of commercial success to calculate a risk – the likelihood, the need to take it, the consequences if the risk becomes the reality – and to plan your business moves accordingly, almost certainly incorporating a healthy dose of risk prevention. That’s the theory, at least, and operating in a globalised economy that has increased the potential for risk at just about every step, it should also be the practice.
For all the organisational sophistication and slick operational performance at the heart of global success, the need for any commercial enterprise – including a major pharmaceutical company – to identify and consider at each stage the possibility of what could go wrong has not diminished. If anything, it has increased, because whether it’s a ‘big bang’ or something far more insidious and systemic, for every benefit globalisation offers there are potential pitfalls which a company ignores at its peril.
REPUTATIONS ON THE LINE
There have been several high profile examples of the reputational risks pharmaceutical companies run in the day-today task of bringing new products to market. Newspapers screaming ‘drug test disaster’ do circulation figures no harm at all, and those unfortunate stories are not easily forgotten. But commercial risks – events and occurrences that can severely damage a corporation if not properly managed – need not be of the headline-making variety.
Recent research in the US and Europe with executives from the world’s leading companies demonstrated that, in a global business, disruption to the supply chain comes second only to competition as a threat to a company’s well-being. In other words, the principle risk to the existence of a global business is largely defined by the way the company itself sets up its own business. An adequate response to this finding is a commercial imperative. |
