Manoeuvre your business into position by taking the broader view, says Mark Essex
We’ve all been there. Stuck behind a crawling caravan on the serpentine bends of a country road. Glaring at that rattling exhaust pipe through gritted teeth, barely resisting the impulse to punch the dashboard and repeatedly sound your horn.
Remind you of another stop-start journey? From the day of the EU vote, many businesses’ Brexit thinking idled as we waited for the new leadership of the Conservative party. Then, handbrake on as the EU wouldn’t discuss Brexit before Article 50 was invoked. Then it was the General Election, then the five rounds of negotiations. At every stage, business was able to coast for a while, suspending decisions in the hope that there’d be a straight coming soon, providing some clear air to press the accelerator and proceed with confidence. Instead, summer 2017 was spent waiting for the German elections, then sufficient progress in October then the revised deadline of December.
Frustrating. But the choices KPMG's clients need to make are difficult. Who can blame decision makers for wanting to wait just a few more weeks for the promise of more information? Transition is promised for March but what if that slips to April? Or May?
Time then, I would argue, to reflect on the Brexit Highway Code. If, as a business, you’re wasting too much energy venting your frustration at that BREXIT 1 number plate blocking your way, you run a serious risk of ignoring the larger picture, with damaging consequences just slightly further down the road.
How many companies, for example, have unthinkably parked the question of refinancing, waiting for certainty – but potentially pushing towards a deadline near the end of this year? Precisely the time, in other words, when the UK and EU are scheduled to be bang in the middle of the six-month deal ratification process – and the risk premiums may well have increased.
But if businesses remain transfixed by that Brexit caravan and waiting for the next political milestone to pass, they may miss out on the opportunity to think about doing things altogether differently: to follow that turning up ahead you simply hadn’t known was there.
As KPMG’s vice-chair, James Stewart argued, the impact of Brexit could eventually be dwarfed by a different disruptor: digital transformation. Its potential certainly rang out forcefully at KPMG’s Advantage Digital conference in London this week. AI, robotics, machine learning, big data, the Internet of Things, the power of Cloud: all have the capacity to revolutionise the way businesses work, the products they sell, the services they provide. The potential cost savings and boost to efficiency are enormous; so too, the solutions to problems we don’t even know we have.
If we allow ourselves to be distracted by the brake lights in front of our nose, we risk losing months or years of digital progress. Which, given the rate of change, will feel like decades. Some sectors, of course, have forward-planning built into their DNA. Tour operators, for example, are focusing on how they would deal with potential disruption to flights schedules in Easter 2019, when many of us have only just mentally left Christmas 2017 behind.
And this affects other export businesses, and not just the ones you think of first – automotive or aerospace. I recently spoke with a luxury retailer sitting in the heart of the West End. Fully 50% of their revenue comes from tourists. They are looking at the follow-on impact of any potential cliff edge chaos on US tourists, who tend to book their European travel six months ahead; what will that mean for Christmas 2019? Brexit is – inevitably, understandably – a major distraction for UK plc.
But businesses can no longer afford tunnel vision about the road ahead. The stakes are too high. Disruptive technology will do what it says on the tin: start acting and transforming now – create a culture which is agile and open to change – and you’ll be in better shape not only for Brexit, but for the contours of the rapidly shifting landscape beyond. So, fourteen months from March 2019, it’s time to pull back and gain some distance. To read the road ahead and survey the landscape around you as it unfolds – giving yourself far greater room for manoeuvre as a result.
This article represents the views of the author only, and does not necessarily represent the views or professional advice of KPMG in the UK. You can register for the email subscription list of this column and expert views from our Brexit leaders.