From left: Helzberg Diamonds Divisional Vice President of Enterprise Risk Management Tim Lapinski speaks with Mahveen Mohiuddin, vice president of risk management in North America for LVMH Moët Hennessy Louis Vuitton Inc., and Patagonia Director of Global Security, Safety and Risk Bryan Pruden.
The one question you do not want to ask someone involved in crisis management and enterprise security is, “What keeps you up at night?”
“I hate that question,” said Mahveen Mohiuddin, vice president of risk management in North America for LVMH Moët Hennessy Louis Vuitton Inc. “Everything keeps me up at night.”
Patagonia’s Director of Global Security, Safety and Risk Bryan Pruden also said he was not a fan of the question — which was posed by Helzberg Diamonds Divisional Vice President of Enterprise Risk Management Tim Lapinski during a panel discussion at NRF PROTECT.
But Pruden did have a caveat: “I try not to lose too much sleep over moments in time.”
But how can retail organizations operate in a world where everything — from the climate and weather patterns to political discourse and election outcomes — is a potential crisis?
Retailers are increasingly living in an age of “polycrisis,” facing business-disrupting events on a nearly daily basis, including cyberattacks, organized retail crimes and increasing incidences of violence in retail environments.
But it’s not just about what happens in the store: There are also risks outside a retailer’s control, including global events, weather disruptions and geopolitical situations that impact retailers, their employees and customers.
In a polycrisis environment, it’s up to risk leaders to help prepare and shape an organization’s senior leadership to know what a potential crisis is and what the organization can do to minimize the risk. Or — as Pruden noted — “If everything is a crisis, nothing is a crisis.”
Toward that end, Pruden has formed an Enterprise Risk Management Committee at Patagonia made up of senior leadership executives as well as members of the DE&I, Innovation and Social & Environmental Impact teams to define the most critical risks to the organization.
“We have smart executives,” Prudent said, “but they didn’t always talk to each other, so that provided a platform and framework for a shared vocabulary.”
Helzberg Diamonds is in the midst of forming a similar committee program under the direction of Lapinski. It’s an initiative that has been in the planning stages for years and was delayed by a major operational crisis that impacted all retailers — the COVID pandemic.
Looking back on the pre-pandemic risk assessment he and his team had already undertaken, Lapinski said, “it’s interesting that the biggest risk or thing that could happen and bring our company to its knees wasn’t on that list — a pandemic.”
Today, Lapinski’s team is back to work on its Enterprise Risk Management program, and buy-in from the C-suite, as well as other critical parts of the organization, continues to be a major focus, he said. “The goal of the Enterprise Risk Department is that risk is owned by everyone, not just one person,” Lapinski said.
Enterprise-wide risk management is more important than ever because today’s retail risk environment is so complex, according to Mohiuddin. “Because we are risk leaders, we are subject matter experts, [so it’s] important for us to educate senior stakeholders and leaders, and bring them along on the journey.”
In addition, finding the right partners throughout the organization, including those in human resources, IT and finance, can help amplify the message, Mohiuddin added.
Pruden agreed that having the right voices in the room, along with focusing on organizational frameworks, can speed up and improve responses in a time of crisis. “We can’t just pull down and dust off a binder on what to do in a crisis,” he said. “We need organizational frameworks to get the right people in the room with the most information to make high quality decisions. That’s where I’ve found success.”
As for what keeps these three up at night? From a luxury retailer standpoint, it’s the general state of crime and violence in the country and the fact that retailers and employees are taking the brunt of those actions, Mohiuddin said. “In this moment, social conditions are really worrisome for me.”
For Pruden, a range of trade and economic issues — most of which are out of the hands of retailers — are areas of specific concern. Patagonia sources materials and products from around the world, including political hotspots such as Taiwan, China, Vietnam and Sri Lanka.
He noted political divisions in the United States and the upcoming presidential election as well: “The breakdown in discourse, people at work not getting along or speaking to each other,” Pruden said, and “keeping employees happy when they want to see the values they identify with reflected in the brand” they work for.
Lapinski also pointed to political unrest as a potential crisis that keeps him up at night, as well as actions that could impact his company’s reputation. “One of the things I’ve looked at recently is — as we enter into new businesses with providers and suppliers … you really have to do due diligence” when it comes to data sharing. “Are they protecting it and how?” he said.
