Brexit: are you an ostrich?
The business community’s Brexit preparedness – or lack of it – was the subject of intense discussion at a recent ‘ABCs of Brexit’ CMI event
Amid fevered political debate about a no-deal, Chequers and hard borders, British Chambers of Commerce (BCC) director-general Adam Marshall brought a clear message to CMI members at ‘The ABCs of Brexit’, an event hosted by CMI chief executive Ann Francke: it’s time for managers to start taking action, and to prepare for a post-Brexit world.
Only one-third of UK businesses are actively preparing for Brexit, said Marshall. According to BCC’s research, two-thirds are in ‘a state of unpreparedness’ and have ‘switched off’ from the process due to ‘Brexit fatigue’. Some 62% of UK firms have not carried out a Brexit risk assessment.
Marshall said the business community falls into three groups when it comes to Brexit planning:
- Those who are actively preparing and taking steps. However, the steps they’re taking may not necessarily be beneficial to UK plc. Many businesses are, for example, anticipating a slowdown in recruitment and investment
- Those who will respond when they understand what concrete action they need to take. Right now, they’re focused on the regular, urgent priorities of day-to-day working life.
- So-called ‘ostriches’ who are putting their heads in the sand and not preparing. Many of these companies are suffering ‘Brexit fatigue’; others do not believe that Brexit will have an impact on them.
What businesses now urgently need are answers to practical questions. And they’re not getting enough ‘precision and clarity’. The BCC’s own ‘Brexit Risk Register’ lists 24 areas where businesses need answers, and right now, business has precision and clarity on only one – VAT on imports. The other 23 areas are deemed to be in either ‘red’ or ‘amber’ territory and are unclear. “I’ve never seen a higher level of frustration among businesses,” said Marshall. “A real gap is opening up between business and politics.”
CMI’s chief executive Ann Francke argued that the same professionalism and project management capabilities should have been brought to the Brexit negotiations that were brought to the delivery of the London 2012 Olympics and other successful infrastructure projects. “It should never have been a party political issue,” she said; politicians of all parties, business and wider society should be working together in collaboration. “We failed to come together early on,” Marshall agreed.
The two leaders also agreed that Brexit – like childbirth – is not just about the process and the day itself. What comes afterwards is just as important. “Government must devote the same bandwidth to the post-Brexit scenario as it has to the negotiations,” said Marshall. Even if the UK does achieve a positive Brexit deal, the country will need positive growth conditions at home in order to thrive after Brexit.
Crucially, there must be a post-Brexit focus on management and leadership skills. CMI’s Francke referenced CMI’s Management Manifesto, which shows that poor management costs the UK £84bn in lost productivity a year – £9bn more than the £75bn that the Institute for Fiscal Studies has estimated could be lost every year by 2030 if the UK leaves the single market.
The manager’s to-do list
So what should managers be doing right now to prepare for Brexit, even if there is little clarity on many specifics?
- First, said Marshall, recognise that you have do have some power and agency. The situation may seem out of your control, but there are a few areas where clarity is emerging. The Home Office, for example, has agreed on ‘settled status’ scheme for EU nationals, and has published guidance in this area.
- Next, look at points in your supply chain where, again, you have some control and agency. Both Francke and Marshall encouraged managers not to be ‘flat-footed’ in their response.
- And make time to talk to your people. Address their concerns, and look for areas where upskilling and developing leadership talent could benefit your organisation.