It’s almost Easter, and two ‘exit dates’ have now come and gone. Last week’s Brexit ‘flextension’ has once again removed the immediate ‘no deal’ cliff edge and will have come with a huge sigh of relief to some businesses. However, while the breathing space is welcome, for many it won’t be simply the case of resetting the countdown clock to 31 October. Uncertainty continues, not only for another six months, but for some time beyond that horizon, and businesses need to stay agile in response.
For the past two years, 29 March has been the moment in time businesses have focused on for their Brexit planning. However, with the latest extension, Brexit stops being about one moment and becomes part of the wider backdrop to all strategy and investment decisions. We’re in a prolonged period of uncertainty, where we do not know how the UK will leave the EU, when the UK will leave the EU or the terms of our future relationship. On the upside, ‘no deal’ remains a possibility that is looking increasingly unlikely. And even though the ‘flex’ in the extension could seem challenging, in practise if we move into a transition period the status quo will remain. But this doesn’t mean businesses can drop their Brexit planning. Far from it.
While uncertainty and disruption are pervasive in the business world, Brexit will continue to have specific implications in the short, medium term and long term that businesses need to consider.
With parliament on recess, this is a good moment to reflect and take stock, and decide whether to pause and keep options open, to roll back preparations, or reevaluate their options on a more strategic basis. For many, the response to Brexit has been quite tactical and business strategy has been to keep options open for as long as possible. However, it is difficult for them to do that for much longer, especially international investors for whom the UK is only one market of many.
My advice to business would be to think about the extra six months through the following five lenses:
In addition to planning for Brexit, this is also welcome time to regear your business for the longer period of uncertainty that lies ahead of us. Brexit has brought home to many in the UK the fact that uncertainty is a constant characteristic of the business environment. While businesses may crave certainty, it doesn’t look like it will come anytime soon. This six month grace period is a good opportunity to focus on future-proofing your organisation against a backdrop of disruption and uncertainty. Reimagining the possible when it comes to how you use technology, reshaping your workforce to become more agile, and reorienting your business to the new trade environment should all be top of the agenda.
Businesses that will do best in this context are those that use technology to create strategic agility and flexibility in how they deliver a customer centric experience. Technology is already a core driver of disruption - from Artificial Intelligence (AI) to Augmented Reality, and from autonomous cars, to stem cell rejuvenation, to drones. Businesses need to develop a deep understanding of the nature of Brexit related disruption and the emerging technology behind it, as well as the capability to monitor and interpret the often very faint signals of forthcoming disruptive impacts. It is then that organisations will be able to tackle potential challenges, stretch their horizons, adapt and innovate.
For those, like me, who have dedicated a lot of time and energy responding to the Brexit twists and turns over the past two years, it will be a challenge to keep the momentum up. Leaders need to acknowledge and respond to the fatigue their people may be feeling too. The temptation is there to leave it all for another day. However, extra time to plan for Brexit is a gift. As Mr Tusk said, don’t waste it. Businesses must use this window to future proof themselves against the uncertainty of Brexit and wider disruption facing us all.
Partner, PwC United Kingdom
Tel: +44 (0)7753 928494