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Risk management is key to ensuring the safety and success of any organization. While its basic principles are applicable in all cases, there are significant differences in how they are approached and implemented in organizations of different sizes. In this context, it is necessary to understand the specific particularities and challenges faced by small organizations.
Basic differences
While the fundamental principles of risk management are applicable to both small and large organizations, it is important to recognize the inherent differences in each type of organization. Some key differences are highlighted below:
• Complexity and scope: Small organizations are characterized by simpler operations and limited scope compared to large companies. This implies that risk management can be less complex and involve fewer variables. Risk identification and assessment in a small organization tends to be more agile and less demanding in terms of resources.
• Organizational structure: In small organizations, risk management usually falls directly on the leaders and owners of the company. They do not usually have specialized risk management departments, as resources may be limited. This means that those in charge of the organization must take an active role in identifying, assessing and mitigating risks.
• Financial resources: Small organizations tend to have fewer financial resources available to invest in risk management compared to large companies. Therefore, it is important to make efficient use of available resources and opt for more practical and cost-effective approaches. This may include internal cybersecurity training, implementation of basic security measures and adoption of technology acceptable use policies.
• Internal communication: In small organizations, internal communication tends to be more direct and fluid due to the flatter structure and fewer hierarchical levels. This facilitates the transmission of information about identified risks and corresponding mitigation measures. Organizational leaders and owners can communicate more efficiently with employees and ensure that everyone is aware of the risks and how to address them.
By recognizing these differences, organizations can tailor their risk management approaches to their particular characteristics, allowing them to better manage risks and promote long-term safety.
Profound impact
An impact-based approach provides a better understanding of what small organizations can do. Simply put, the impact of a cyber threat can be devastating and potentially put them out of business entirely. Beyond the technical problem itself, the costs to remediate the effects of a cybersecurity incident can include hiring experts to investigate and fix the problem, restore systems and infrastructure, and enhance existing security measures to prevent future attacks. These costs can be overwhelming for a small business.
The increase in adverse events underscores the growing need to develop some "risk intelligence" defined as the ability to rigorously interpret risks and the consequences or opportunities they pose for a company. This implies looking beyond the complexity of the environment, systematically identifying and categorizing risks. In this sense, the security strategy must go beyond protection, focusing on reducing the probability of material impact due to adverse events.
Cybersecurity professionals are challenged to learn faster than adversaries, reduce the attractiveness of the enterprise, reduce technical vulnerabilities, and mitigate impact. The instability of today's environment requires overcoming the false sense of security provided by standards and best practices, adopting instead a security guided by uncertainties, which requires being prepared to navigate in the midst of instability, and adapt to new scenarios. In today's digital ecosystems, where companies establish their value proposition and rely on trusted third parties, it is necessary to define a risk appetite, which involves defining the risks that the company is willing to accept, establishing protection level agreements and a specific tolerance. In this way, strategies can be designed that are aligned with the objectives.
Leaders, for their part, must establish the framework for their proposals within the context of operation that recognizes the specific threats in the environment and sector. This involves characterizing potential adversaries in terms of capabilities, methods and motivations by establishing a threat baseline. In this way, they will be able to validate current capabilities and acquire those necessary to defend the organization and anticipate possible adverse scenarios. This may seem unnecessary for small companies, but it can be an eye-opening exercise.
Against this backdrop, cybersecurity professionals are challenged to develop actions to operationalize the strategic vision, but this requires that there is one, which is sometimes not so clear in small organizations. This leads to reducing the attack surface, identifying and categorizing the scope of impact, interpreting risks frequently, and mitigating, absorbing and adapting to successful attacks. The value promise of cybersecurity lies not in the total absence of successful adverse events, but in keeping the organization within its defined risk tolerance. To achieve this, key enterprise cybersecurity capabilities must be strengthened, including defense, detection, crisis response and monitoring, and if there are insufficient resources to invest in these, simpler approaches can be taken, based on best practice standards and recommendations from experienced small business professionals.
Cybersecurity thus becomes an articulating element of the value proposition, with the aim of increasing the resilience of the business, maintaining the course set by leaders, and strengthening digital trust with customers. In this sense, the challenge in the face of risk translates into five key aspects: tolerate, terminate, transfer, transform and treat. These actions provide mobility to the organization's capabilities and allow it to adjust to its risk appetite. It is critical for the organization to answer questions related to protection level agreements, maintenance within the defined risk threshold, the availability of required capabilities, the gap against the target maturity level and the evolution of the state of the relevant threats. This, for any size of organization, is an unavoidable factor, and is not foreign to businesses with small environments. Finally, in the event of an adverse cybersecurity event, it is advisable to have a defined incident management plan, clear lines of communication, and external assistance from specialized personnel for situations of this type.
Conclusions
Risk management is an essential practice for both small and large organizations. While there are differences in how they are approached and implemented in each type of organization, the fundamental principles still apply. It is important for small organizations to recognize the importance of proper risk management and adopt approaches tailored to their specific resources and needs. By identifying and assessing risks, developing a risk management plan and fostering an appropriate culture, small organizations will be able to protect themselves from potential adverse impacts and take advantage of opportunities more effectively, thus ensuring their long-term continuity and success.
