Organizational Risk Management, CEO and Engineering Team Departure, Knowledge, and Intellectual Property at Risk

Abstract

This case study examines the organizational, technological, and competitive risks faced by Touchstone Innovations (THI) following the abrupt departure of its visionary CEO and the core AI engineering team to join a direct competitor, HealthTech Solutions. The exodus triggered critical losses in tacit knowledge, workforce morale, and operational continuity, exposing vulnerabilities in THI’s talent-retention strategies and Enterprise Risk Management (ERM) practices. Using the Resource-Based View (RBV) theory, the study demonstrates how the loss of unique talent undermines innovation capacity, operational continuity, and market positioning. The paper further examines the impacts on employee morale, stakeholder confidence, and organizational culture. It further evaluates employee impacts, stakeholder repercussions, and cultural misalignment. To address these challenges, the study applies the Kepner-Tregoe (KT) method, the Eight Disciplines (8D) model, the ADKAR and Lewin change frameworks, and the COSO ERM model to propose legal, operational, and cultural recovery strategies. Findings emphasize the necessity of proactive risk management, knowledge institutionalization, robust intellectual property (IP) protection, and cultural alignment to restore resilience and ensure sustainable organizational performance. In doing so, the paper values the need for structured knowledge management, stronger IP protection, cultural redesign, and long-term strategic planning to regain stability and sustain innovation. KEYWORDS: intellectual property protection, knowledge management, talent retention, enterprise risk management, organizational culture, leadership succession, competitive advantage JEL Codes: O34; M14, M12, L86, M21