Rethinking risk: why interconnectedness is reshaping enterprise strategy

In today’s volatile business environment, risk is no longer a series of isolated threats. It is a complex, interconnected system that requires a new way of thinking. The traditional approach of categorizing risks into static lists and addressing them individually is quickly becoming outdated. Instead, organisations must recognize that risks influence and amplify one another, creating ripple effects across departments, geographies and industries.

This concept of risk interconnectedness was a central theme at Riskworld 2025, where experts described the modern risk landscape as a “spaghetti bowl” of influences. Risks such as geopolitical instability, technological disruption and environmental change are no longer separate challenges. They are deeply intertwined, and their convergence demands a more dynamic and collaborative approach to risk management.

Why interconnected risks matter

Dave Arick, Sedgwick’s Managing Director, Global Risk Management, explains that interconnected risks require organisations to move beyond siloed thinking. For example, artificial intelligence (AI) is not just a technology concern. It raises legal, compliance, marketing and cybersecurity questions. Each department may view the risk differently, but without a shared understanding, organisations risk missing the bigger picture.

Bringing together diverse perspectives helps build a more complete view of how risks interact. The goal is to anticipate how one risk might accelerate or exacerbate another and to prepare accordingly.

This shift in mindset is essential for businesses that want to stay resilient. Risks are fluid, not fixed. They evolve over time, and their impact can change depending on how they intersect with other factors.

Scenario planning as a strategic tool

One of the most effective ways to address interconnected risks is through scenario planning. Rather than relying on static risk assessments, organisations can use scenario planning to explore potential outcomes and stress-test their responses.

Scenario planning gives teams a chance to think through what could go wrong in a risk-free environment. It helps identify gaps in preparedness and encourages proactive thinking.

This approach is especially valuable in areas like business continuity and disaster recovery, but it can be applied across the enterprise. Whether planning for supply chain disruptions, regulatory changes, or emerging technologies, scenario planning helps organisations stay agile and responsive.

Turning data into action

Many companies collect vast amounts of risk-related data, from incident reports and claims to financial impact assessments. The challenge is not gathering information but using it effectively.

Arick emphasizes the importance of translating data into actionable insights. organisations need to move from inputs to outputs. That means using what has been learned to inform training, improve tools and shape policies that prevent future incidents.

For example, data might reveal a pattern of workplace injuries linked to poor ergonomics among remote employees. Rather than treating each incident in isolation, organisations can use this insight to develop guidelines that reduce risk across the board.

Similarly, if drone technology can replace hazardous tasks like roof inspections, investing in training and safety protocols can prevent injuries and reduce liability.

Building a collaborative risk culture

Interconnected risks also highlight the need for cross-functional collaboration. Risk management cannot be the responsibility of a single department. It requires input from legal, IT, operations, HR, and beyond.

Arick notes that informal conversations with leaders across departments can be just as valuable as formal planning sessions. These discussions help surface different viewpoints and foster a culture of shared accountability.

organisations should encourage regular dialogue about risk, even if it is not part of a structured meeting. The goal is to create an environment where people feel empowered to raise concerns, share insights, and contribute to strategic decision-making.

What businesses can do now

To adapt to the reality of interconnected risks, organisations should consider the following steps:

• Engage diverse perspectives across departments to understand how risks influence one another.
• Use scenario planning to explore potential disruptions and prepare for unexpected events.
• Translate data into action by identifying patterns and developing policies that address root causes.
• Foster collaboration by encouraging open dialogue and shared ownership of risk management.

Risk is no longer a static list of threats. It is a dynamic system that requires continuous evaluation and adaptation. By embracing interconnectedness, businesses can build resilience, improve decision-making and stay ahead of emerging challenges.