June 28, 2016

A Strategic Response to the REVOLUTION that is BREXIT

Few really believed a Brexit vote would eventuate, even though 17,410,742 people decided to do so. The result resulted in seismic change, but there is no digitisation involved here, just old fashioned disruption at its best; a heartfelt bloody revolt. Take no enemies, damn the consequences. So here we are – and there is no turning back.

From a business perspective the consequences are game changing. The overriding issue though is not just a gloomy financial outlook. At the time of writing our primary cause for concern is one of bewilderment. Just as the proverbial stag will freeze when confronted by the headlights of an oncoming car, so has the business executive been blindsided by the realty of BREXIT. The way to overcome bewilderment is to gain control, seize the day, look for the positives and take action.

In gaining control it is now time to differentiate your long term, but likely poorly articulated strategy from the more visible and detailed short term strategic plan. From my experience, few executives are conscious of the difference. Strategy is generally limited to specific imperatives that the organisation must undertake to prosper and grow over the next 30 to 50 years or more. In contrast, most people are in touch with their short term (3 to 5 year) strategic plan. This is a far more detailed document which includes the most important projects and investments against which someone will be held accountable.

An example of the difference between strategy and planning is that strategy is based on an understanding of the industry and markets that the business will operate in. A plan on the other hand describes what the business will do in those markets; which geographical locations, products, prices and form of promotion.

In seizing the day, it is advisable to focus on the plan not the strategy. This is now the time to redefine the playing field in the here and now. Opportunities identified may include the need to stop doing something as well as start something new. In looking for the positives the foregoing provides us with a foundation upon which robust and confident strategic thinking can take place. The expected outcome should be the realisation of a short term comparative advantage, and hopefully the emergence of a long term competitive advantage. In taking action, high levels of resilience must take the place of blame and excuses. Resilient people focus on the positive, overcome adversity, reinvent then come back stronger than ever.

When taking the appropriate action, resilience is more readily exercised when conducted within the framework of a well defined change  program. In the foregoing discussion I have differentiated between long term strategy and planning. These are the first two pillars of a fully integrated Strategic Management Framework that we use to structure strategic thinking under any circumstances. We also deploy a framework that describes the intent behind strategic change (illustrated opposite).

Under normal circumstances I use this framework to encourage clients to be highly proactive and aspire to an invention of their own future. Ironically this was the intent of BREXIT, the reality has found us treading water in a sea of uncertainty. Today therefore I am stressing the need to adapt to a future that has been redefined for us, not by us.

In effect I am asking leaders to engage in the quadrant labelled Agile. This is the quadrant that calls for a rapid response to an external event, one that has arisen as a result of an imposed change rather than an intended change. My normal focus is on encouraging them to be Proactively Prosponsive (Dynamic Invention). The words are new, the meaning is not. Those who will be less well placed from the BREXIT fallout will be those who do respond, but not fast enough (Adapt). To do nothing could be OK, but those in this category will probably be reliant on luck more than good judgement. The response or prosponse that is right for you; is up to you, I wish you good luck.

1 Comment

  1. Mike Holland says:

    One month on, what has changed?

    Well, the shock has passed. In UK management we have become familiar with the idea that the nation is leaving the EU.

    The uncertainty remains much the same, however. The terms and timing of the ‘divorce’ are as unclear today as they were the day after the vote.

    In the long term (the ‘strategy’ rather than the ’plan’, to use Paul’s terminology) there remains huge uncertainty. But has that not always been the case? Few businesses have ever had sure knowledge of what will happen in their industry two or three years into the future.

    Meanwhile ‘the plan’ can be based on the twin facts that (a) nothing much is going to change in the next couple of years and (b) things may or may not change by some uncertain amount after that.

    ‘Seize the day’, as Paul says. And look to the future by developing a strategic management framework that will allow you not just to cope but to thrive with whatever the politicians throw our way over the next couple of years.