Leaders spend most of their time conducting risk analyses for virtually every decision they make. Today, more than ever, cybersecurity is a critical field in which risk must be continuously assessed.
The risk of unplanned service disruptions - in addition to the many direct and indirect costs of data loss and/or leakage - is substantial. Virtually everything an organization does today is digitized. In addition, the complexity of environments and the digital ecosystem as a whole makes organizations vulnerable to cyberattacks.
Although the impact of these cybersecurity risks is undeniable, many organizations still fail to build their cybersecurity strategies and tactics around the concept and reality of risk. But why?
In recent years, the rapid expansion of regulatory compliance across everything and every industry, from identity protection to data governance, has challenged many organizations. As more compliance regulations emerge, with harsher penalties for violations, leaders have understandably prioritized a simple cybersecurity rallying cry: follow the rules and meet requirements. And that is necessary, of course. After all, the prospect of noncompliance represents a risk no leader wants to take.
Although regulations aim to address cyber risk broadly, they are generally not effective enough to protect companies against current threats. Criminals actively monitor regulatory requirements and adjust their tactics in real time. Leaders who rely on high compliance scores to manage risk may unknowingly overlook significant gaps specific to their operating environment.
Defining cybersecurity risk and implementing the right resources, strategies, and protections requires a broader perspective and an understanding of the business itself beyond simply following compliance protocols. In many organizations, especially large companies with more extensive compliance obligations, the audit function often drives decisions about how, when, and where to invest in cybersecurity.
For an approach better suited to an increasingly complex digital landscape, keep the following points in mind:
- Focus on areas where a security incident could cause the greatest harm to your organization
- Identify the highest-risk areas
- Make informed, fact-based decisions about where to allocate resources
- Determine and measure organizational risk
There is an important reason many organizations do not consistently use a risk-based approach in their cybersecurity strategy: there is often no shared definition of risk or common language to help everyone in the organization make sound decisions.
Most leaders are familiar with the classic definition of risk: how likely is something to happen, and what would the impact be if it did? This definition has worked for almost every other business scenario. But to address digital risk effectively, organizations must understand how to measure likelihood and impact and then agree on their risk acceptance criteria, so that processes, policies, and technologies can be applied to maintain a posture that keeps risk consistently below the threshold and steadily decreasing.
