Illustrator Dennis Balogh

Frank Drendel

How do you create a global risk-management strategy?

In 35 years of being a CEO, I’ve learned to expect the unexpected,” says Frank M. Drendel, chairman and CEO of CommScope Inc. (CTV). “You can’t anticipate that a volcano would shut down international flights, but a CEO today has to build a business plan that prepares for potential disruptions. By fostering a culture of integrity, ethics, quality and risk awareness, we believe we can respond more quickly to global challenges.”

The companies that were best prepared for this spring’s volcano-related travel interruptions, Drendel says, were the ones that were nimblest. For example, they substituted Internet communications and videoconferencing for face-to-face meetings. The best way to manage risks like that, adds Drendel, 65, is to maintain a solid balance sheet and train employees to recognize and communicate anomalies. “As soon as something happens, we want it communicated to management so we can respond quickly.”

The recent global recession strained risk-
management strategies, including those of CommScope, which provides network connectivity products and solutions for data, voice and video transmission in wireless and wired networks. “In response to a 25 percent sales decline in 2009, we cut costs, froze salaries, laid off staff and consolidated facilities to gain efficiencies in our operations,” Drendel says. CommScope’s recession strategy involved focusing on cash generation, maintaining core R&D projects and ensuring that the company’s international footprint could still develop after the worst was over. That includes doing business in emerging markets. “In any developing country, you have to have infrastructure,” Drendel says. “Once you have water and sewers and electricity, you need telecommunications quickly after that. Every piece of technology begins as an emerging opportunity.” — Sharon Kahn