The new reality of Brexit spells uncertainty for organisations and businesses operating in the UK. Agility and responsiveness to change will be key to managing through the challenges and opportunities that lie ahead.
Nobody knows exactly what the UK’s exit from the EU will entail, but the referendum outcome and subsequent events point to unpredictable outcomes and unintended consequences. We can assume the process will take some time (years not months), and that it will have implications for regulations, freedom of movement and labour, customer demand, investment and capital flows, and much else besides.
At the macro level there are indications this uncertainty is translating through to lost orders, cancelled projects, reduced investment and lower overall activity – with the risk of a self-fulfilling downward economic spiral. For individual organisations and businesses, Brexit adds more pressure to an already challenging environment.
Radical uncertainty requires new approaches
One of the major challenges arising from Brexit relates to planning and operational management.
The complexity of the Brexit process – and the interconnectedness of the various elements – make it almost impossible to predict what will happen: both in terms of the political and macroeconomic negotiations and decisions; and the effects, opportunities and threats that will come as a result. Which makes traditional approaches to planning (using past results and patterns to predict future outcomes) and operational management (typically via annual budgets and long-term programmes) poorly suited to the ‘radical uncertainty’ of Brexit.
Therefore instead of trying to predict and essentially ‘make bets’ on highly unpredictable outcomes, focus instead on agility and responsiveness – capabilities that will put you in the best possible position to identify, react and adapt to challenges and opportunities as the Brexit process unfolds.
Focus on the achievable and impactful
“Agility is the ability of an organisation to renew itself, adapt, change quickly, and succeed in a rapidly changing, ambiguous, turbulent environment”; while not specifically describing Brexit, this McKinsey definition does a good job of capturing the current environment and the capabilities needed to succeed in it.
Agility is a function of both underlying structure and infrastructure, and the operational processes that run on top of them. Of these elements, some will be relatively inflexible (for example, a manufacturing company will be constrained by committed infrastructure costs and complex processes) whereas others will be relatively flexible.
Therefore to optimise agility, focus on what’s both achievable and impactful within the context and constraints of your operating model. Typical areas include:
- Workplace factors: consider alternatives to the traditional physical workplace – everything from hot desking to co-working spaces to home and remote working. An effective digital workplace can reduce costs, increase flexibility (i.e. by reducing property liabilities and commitments), and also improve employee experience, productivity and engagement
- Workforce factors: look for opportunities to build more flexibility into your workforce planning: for example, project-based working and contingent workforce approaches can provide flexible, scalable capacity while mitigating risks from changing demand or impacts from regulatory change
- Processes and management of work: identify specific processes and tasks that can be decoupled from the current means of delivery (i.e. to make the work ‘agnostic’ to where and when work is done, by whom, on how it is delivered)
- Infrastructure: focus on those infrastructure and cost-base elements which can be made more flexible and scalable. For example, IT strategy and spend can be shifted from traditional multi-year capex agreements to flexible, ‘as-a-service’ opex spend.
These are just a few examples of how you can increase agility in your operations and for your organisation. The starting point is to make greater agility a priority given the new circumstances and uncertainty arising from Brexit: you can then apply this thinking to review your current setup and processes, and guide future decisions and investments.
Channelling environmental signals
While agility is essential to ‘Brexit era’ planning and management, it’s not the whole story: it only describes your capacity and ability to adapt to change – but not the capability to capture and process change ‘inputs’. This capability can be termed responsiveness.
The relationship between agility and responsiveness can be explained with a simple analogy. Think of an organisation as an organism: agility is the ability of the body to react and adapt to the changing environment; responsiveness is the ability to pick up, channel and process signals from the environment to inform the actions of the organism / organisation. Both are equally important and necessary.
Responsiveness is focused around information: how it’s detected, channelled, processed and acted upon. Critical success factors are the speed and effectiveness of information/signal detection, information flow, decision-making and operational execution. Responsiveness applies both internally and externally – and most importantly at the interface between the two i.e. external signals (customer, market, political, regulatory etc) driving internal decision-making and activity, and internal decisions and actions translating effectively to external impacts.
To build responsiveness, focus on opportunities for improvement across:
- Connectivity: not in the technical sense, but in terms of becoming less siloed and hierarchical, and more ‘networked’: internally between individuals, teams and functions; and across internal and external organisational boundaries
- Communication channels: key to responsiveness is the speed, ease and effectiveness with which information can flow (internally and externally). Dialogue, involvement and transparency are also key: channels need to be multiway, simple and engaging to use, and highly available (from anywhere on any device)
- Processes and workflows: information and decisions will be slowed by silos, hierarchies, ineffective channels and inefficient processes. Look for opportunities to optimise existing processes and workflows for faster decision-making and speed of execution
- Operating culture: responsiveness at an organisational level requires a shift away from traditional top-down ‘command and control’ styles of management towards an engaged ‘community’ of colleagues who are encouraged to share and discuss information, and empowered with the appropriate level of decision-making authority and autonomy.
Responsiveness is not a new idea, and has been championed in particular by the responsive.org movement. However – similarly to organisational agility – it’s a concept which has perhaps felt less of a priority and more of a ‘nice to have’ in the relatively benign conditions of the last few years. Brexit changes this: agility and responsiveness have moved from ‘nice to haves’ to urgent and important priorities.
A win-win you can’t ignore
As set out above, an agile and responsive approach to operational planning and management is distinct from traditional approaches, and is better suited to conditions of extreme uncertainty as is now the case with Brexit. It requires a different approach to organisational structure, infrastructure and investments – and the development of new capabilities, supported by the appropriate systems, processes and operating culture.
This will clearly not happen on its own or overnight: these new approaches and capabilities need to be planned, introduced and managed.
However neither should this entail massive ‘big bang’ change or significant upfront investment. Building agility and responsiveness into your operating model is about building on what you have and from where you are: leveraging existing and planned investments; using agility and responsiveness to guide new investments and decisions; and focusing on the areas that will deliver the best returns.
In this way you can increase agility and responsiveness while mitigating risks and reducing costs – which is the kind of win-win you can’t ignore.
Author: Chris Copland