NU Online News Service, Nov. 7, 12:18 p.m. EDT

A survey by a global economic think tank says it is important for corporations to understand that long-term planning is as important as short-term concerns, and more executives are recognizing the need for making plans long into the future.

The report was released by The Economist Intelligence Unit, a global economic think tank, during the Economist Conferences' Risk Summit, sponsored by insurance broker Willis Group Holdings.

The report, Getting New Perspective on Strategic Risk, surveyed 500 global business executives and highlights the dangers of allowing current challenges—from the on-going euro-zone crisis to the prospect of a double-dip recession—to take priority over long-term planning.

The group notes that many business leaders will naturally focus their attention on the immediate future and ensure their short-term financing needs are met. But the report warns that by prioritizing short-term profits over long-term performance, businesses reduce their chances of sustainable success.

Willis Group President Grahame Millwater says in a statement, “Establishing long-term risk management is at the heart of strategic planning and is essential to the future success of any commercial organization. The findings of this latest global-risk survey by the Economist Intelligence Unit reveal that although we must address the challenges facing us here and now, we must also reflect upon how we are preparing our companies to face longer-term risks in order to protect our future and ensure the sustainable growth and value of our businesses.”

Some key findings of the research include:

Long-term risk management is rising on the agenda for many business leaders. Over the past year, 50 percent of companies say they have made their risk management more forward looking and agree they should spend more time thinking about the risks they will face 10 years from now.
Links between risk management and strategy are strengthening in many organizations. More than half of respondents say their risk function plays a formal role in strategy-setting and evaluating new market investments.
Many companies are using scenario planning, but few embed it into the overall strategy process. Only 20 percent of respondents say that scenario planning plays a vital role in helping their company to formulate and adapt strategy in uncertain times.

The summit, held at the Willis Building in London, brought together more than 60 senior business executives from a cross-section of industry.

Special Reports /

Report: Short-Term Concerns Should Not Overshadow Long-Term Planning

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