Imagine you regularly monitor a social media site in Country X, home to a small, but critical component in your supply chain. You start reading a blogger because he had mentioned your company a few months back. As time passes, you feel urgency in the posts and in related items on Twitter and elsewhere. The blogger raises questions about the country’s politics and economy.
You caution a few colleagues to be alert. Then, literally overnight, Country X’s government topples, airlines cancel flights, and your supply chain is compromised. But your ear to the social media ground means your factories barely miss a beat, and you quickly evacuate a dozen expatriates.
An extreme scenario? Perhaps.
The point is that social media has a larger potential to be an information source about emerging risks than many risk executives realize. While it always requires diligence in separating the wheat from the chaff, social media can give you an edge.
And yet, most risk executives pay little attention to social media as an information source, according to the 2016 Excellence in Risk Management survey from Marsh and RIMS. Only 6% of risk professionals surveyed said social media was important in informing their understanding of emerging risks, lower than for any other information source. Even “instinct” garnered a nod from 15% of respondents as an important source of information
Among the reasons you shouldn't ignore social media as a tool for understanding and managing emerging risks:
- The speed of social media gives you the power to stay up to date and aware in a time when risks quickly emerge.
- The diverse group of voices on social media can provide viewpoints that you won’t find in your company, thus bringing in important and sometimes opposing outside views.
- Social media often links back to a variety of sources, expanding the range of information for you to consider in identifying, assessing, and managing emerging risks.
- The development of social media listening using big data or text-mining analytics is increasingly helpful in identifying and assessing threats.
The world of communication continues to change rapidly, with social media front and center. We should expect the use and perceived relevance of social media platforms as a means to understand emerging risks to increase, as the current industry workforce begins to retire, and a younger, more social media savvy crowd steps in.
Those who harness social media and manage the risks around the corner, may give themselves an advantage as they become more risk ready over competitors that fail to do so.
For more information on emerging risks, see Excellence in Risk Management: Anticipating Threats and Opportunities Around the Corner.
Regina Spratt is the South East Zone practice leader for Marsh.
Editor's note: This article first appeared on Marsh.com and is reprinted here with permission. Visit the Marsh Risk in Context blog for the original post.