When Brokerslink held its first Risk Managers' Forum in 2018, the landscape of business interruption risk looked fundamentally different. Back then, we were primarily concerned with physical risks, fires, floods, explosions etc. events that occurred within our organisational perimeters and could be somewhat predicted based on historical data. Today, as I reflect on how dramatically this risk has evolved, I'm struck by a phrase that perfectly captures our current reality: "The future is not what it used to be." 

A new risk reality 

The transformation has been profound. We now live in an interconnected world where business interruption risk extends far beyond physical boundaries. Companies must grapple with a complex mix of local risks alongside systemic factors such as supply chain disruptions, geopolitical conflicts, and extreme weather events that occur anywhere in the world. What happens in one corner of the globe can ripple through global supply chains, affecting businesses thousands of miles away. 

This shift represents more than just an expansion of risk, we must all fundamentally change how we think about business continuity. We've moved from a world in which we could rely on past data and experience to predict future risks, to one dominated by uncertainty and unpredictability. We now operate in what theorists call a VUCA world: Volatile, Uncertain, Complex, and Ambiguous, but this isn't just academic theory anymore. It’s an everyday reality.. 

The challenge of AI and hyperconnectedness 

Nowhere is this transformation more evident than in our relationship with technology. The rise of AI and our increasing dependence on the digital has created what I call a "funnel effect."  The critical technology infrastructure that supports our interconnected world relies on just a handful of major providers, Microsoft, Apple, OpenAI for example, and a few others. 

This concentration creates unprecedented vulnerabilities. Last year's CrowdStrike incident perfectly illustrated what happens when a single software update problem affects companies worldwide, grounding flights and disrupting countless operations. Organisations have become so dependent on these few providers over the years that when one faltered, the effects cascaded globally. 

The challenge with AI integration is particularly acute. While everyone is enthusiastic about the potential of AI, and rightly so, we must also assess the new vulnerabilities we're creating. Imagine a company that relies entirely on AI-supported CRM systems to engage with clients. If AI services fail, do they have the human talent and backup processes to resume operations? Many don't, and this represents a critical gap in business continuity planning. 

Risk as strategic asset 

What concerns me most is that while risk managers like myself are actively engaged in understanding these evolving challenges, the vast majority of organisations, particularly small and medium enterprises, lack a risk management mindset entirely. Because of their size and available resources, they operate reactively rather than strategically, which can leave them vulnerable when disruptions occur. 

The Spanish and Portuguese power blackout earlier this year was a powerful demonstration of this. When the grid failed, gas stations couldn't pump fuel because they needed electricity, yet backup generators required gasoline to operate. It was a perfect storm that revealed how unprepared many organisations were for cascading failures. Ironically, those gas stations with proper business continuity plans could have turned this crisis into a significant business opportunity. 

The way forward: proactive risk management 

Going forward, organisations must embrace risk management as a strategic priority, not just a compliance exercise. Think of it like driving a well-constructed car with good tires, the safety measures don't slow you down; they allow you to drive faster with confidence. When companies understand their risks and implement proper controls, they can be more ambitious and achieve better results. 

The solution isn't just about having more risk managers, though we certainly need more professionals in this field, it's about organisations adopting a risk management mindset from the board level down, integrating risk considerations into daily decision-making across all sectors and regardless of company size. 

As we prepare for this year's Risk Managers' Forum- Jorge Luzzi, which will focus on business interruption in our AI-driven, hyperconnected world, the message is clear: we must move beyond reactive thinking. We need proactive scanning of global events, scenario planning for unknown unknowns, and business continuity plans that account for our new digital dependencies. 

The future may not be what it used to be, but with the right mindset and preparation, we can help organisations not just survive disruptions, but thrive despite them.