The Economy

As Brexit Draws Near, Are Companies Ready?

Smart leaders have done major contingency planning, but even they don't know what's actually going to happen, as Brexit will be a first-of-its-kind...
David McCannSeptember 26, 2019

With just weeks to go before the UK’s scheduled Brexit “leave date,” October 31, even the British government has the jitters about the potential for economic chaos.

Cabinet ministers recently revealed part of the disaster plan if the Britain exits the European Union without a trade deal. The report, named Yellowhammer, warns about supply disruptions in medicine and food, as well as long border delays for commercial trucks. There’s also potential for civil unrest.

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Boris Johnson

That not-so-rosy outlook came out even before Tuesday’s ruling by Britain’s Supreme Court that Prime Minister Boris Johnson broke the law when he decided to suspend Parliament for five weeks in the run-up to Brexit.

To be sure, the government describes Yellowhammer as a “worst case” possibility. However, the report highlights how business might become messy for companies operating in the UK. It isn’t just about what’s needed to keep the company going; it’s also about corporate responsibility, which means looking after customers and employees.

Leaders may be asking if their organizations have prepared enough and what more must get done in the next few weeks. Most smart leaders will have reviewed their company’s mission-critical functions. Specifically, they will have studied where they get the supplies they need to produce and sell their essential products, reviewed what could go wrong, and what changes might be needed if things do go wrong.

Supply chain planning can be particularly tricky in the fast-moving consumer products area, which includes drinks, packaged foods, and toiletries. That’s because it gets to the heart of the Brexit worries —where to get much-needed supplies.

But not everyone has looked at everything, especially when it comes to food items. Few are talking about the impact on, say, growers of perishables like Spanish oranges. That matters greatly, because 50% of the food eaten in the UK is imported and has a short shelf life.

Both the leaders who have done major contingency planning and those who haven’t have something in common: neither group knows what to expect. Nothing like this has ever happened. It might be a very difficult situation, but disaster planning can only go to a certain point.

If any last-minute Brexit preparations do need making, leaders need to tread a fine line. On the one hand, bold action may necessary, and the boss may require everyone to work long hours and move fast. On the other hand, the boss should remain outwardly calm.

That’s because in the event of a no-deal Brexit workers may already be alarmed, not least by Britain’s rambunctious tabloid newspapers. To try and broadcast to a large group of people will spread more panic.

Instead, gather together a small and trusted team to help execute any urgent plans. A small group of people will be better able to work quickly and efficiently, which could be vital, given short deadlines.

Likewise, having few members on that team means that the broader message sent to the organization can be better managed. Clearly, its members should be people who believe in the company’s course of action. They should be both concise and precise.

Sözen Leimon is head of organizational strategy for EMEA at organizational consulting firm Korn Ferry. Peter Duffy, is a senior client partner at the firm specializing in the global industrial market.