Roads to Resilience

irreversible after the fact. Instead, it requires a combination of probing the future, sensing the direction of developments, and understanding what is and is not possible in order to quickly and confidently make decisions. To paraphrase a quote by Ratan Tata, Chairman of Tata Group (1991-2012), it is not about ‘taking right decisions, but about taking decisions and then making them right’. At this level, Jaguar Land Rover’s strategy and enterprise risk management are an integrated exercise in which the company’s Executive Committee Members are actively involved, including: • informally on a continual basis • formally on a monthly basis in a Business Performance Review meeting, and • twice yearly with the Board/Audit Committee in formal Enterprise Risk Management meetings. To deal with these risks and challenges, Jaguar Land Rover developed a number of approaches. Three of these will be described here. developments that could indicate the future direction of sales volumes and cost bases in all global markets in which Jaguar Land Rover has a presence, and consequently the implications for funding and cash flows, corporate risk managers work with subject matter experts across the business to identify the key indicating factors. Today, this analysis includes key economic, financial, product and legislative indicators as well as others. Data for pattern analysis is obtained from a number of the company’s databases, insights from 60 to 150 of Jaguar Land Rover’s top leaders working in the key risk areas, studies by professional services companies and other external sources. Drawing on the lessons learned during the difficult times, these risk managers and subject matter experts use the data gathered to ask “ what if? ” questions to understand the business impact of specific changes in key indicators. For example, “ Assume we lose 10 percent of volume, what are we going to do? ” or “ Assume an emerging market changes its fuel duty overnight, making our products less competitive, what are we going to do? ” Although these questions formed the genesis for today’s scenario planning exercises, and gave Jaguar Land Rover the ability to, for example, swiftly reallocate vehicles produced for one market to others where they could be sold faster, they also gave insight into the limits, or trigger points, beyond which mitigating actions are required by the Executive Committee. The insights gained through the Trigger Point Analysis are reported on a monthly basis to the Executive Committee and actions are determined thereon. Multi-track Research and Development The majority of models developed and sold by Jaguar Land Rover tend to be large vehicles with powerful engines, and consequently the company’s fleet average fuel consumption, CO 2 and greenhouse gas emission figures are comparatively high. As legislative targets are determined at the fleet average level, Jaguar Land Rover sales are more sensitive to changes in legislation than, for example, their German competitors’. Audi, BMW and Mercedes-Benz have the advantage of broader model portfolios that include small, more fuel-efficient Trigger point analysis To be able to identify and understand in a timely way the trends and

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Roads to Resilience: Building dynamic approaches to risk to achieve future success