Take destiny into your own hands
Whilst at a National Trust property recently I came across the historic family’s Latin motto, Nec cupias nec metuas (neither desire/covet nor fear). It struck me as an apt phrase to have in mind as you prepare your business for the prospect of a hard Brexit.
After an extended period of uncertainty maybe a resolution of some kind is imminent, whether that be no deal or a different deal from that previously negotiated.
Being not fearful but a resourceful business leader, how can you prepare for whatever comes next? It’s not easy when you don’t know what that is, but I suggest it should include some of the following.
Take your financiers with you. If you have bank borrowing consider extra facilities to cover short-term, adverse cashflow issues. There may be nervousness about increasing debt in the face of a potential crisis (the experience of the 2007-8 financial crisis is not that reassuring).
The government and financial institutions have a key role to play and should be making it clear they will support businesses if there is instability in their markets.
Owners have an obligation to provide funding. Shareholders of businesses should be asked to ensure they have cash available for additional investment if required.
Businesses need to be more aware of where their money is. Most are too generous with the credit they extend to customers, effectively letting cash that could be in their business finance their customers instead. Tighten up and get that cash where it should be.
Engage with your people. They will have noticed something is going on! Prepare them for what you need from them. One of the successes of the last downturn was the flexible working agreed with workforces to avoid redundancies. Many work communities found that everyone taking a bit of pain was better than some people taking it all.
What you require from your people is not just toil, tears and sweat but also flexibility, creativity and positivity. Get that in your organisation and, whatever happens, you will survive and thrive.
If there is market disruption, let it be your friend. That’s easy to say and often hard to do. But there are some obvious steps to take. Finance is again a good starting point. If you have cash resources when others don’t then you are in a strong position.
Have a positive and agile mindset. It’s easy to keep doing what you do but more challenging to innovate and change. It’s never been more important to engage with the people in your business and to lead them imaginatively. They need to know things could be different and challenging but that this is OK. They need to be tapped for ideas and engaged with the ideas of their management. They need to know the journey may be turbulent but that their organisation will arrive at the destination in better shape than when it started.
Identify the opportunities. Almost every business has a capability it is not using. We found one in my business recently and turned an internal resource into something we now sell to our customers. Look for areas of increased demand, for which you can prepare to step up activity, as well as those where demand may fall.
Stop doing things that don’t make sense anymore. The chances of certain activities turning a profit in a post- Brexit world will be so slim that are best discontinued in an orderly way now. Getting those business lines out of the way means they won’t be a drain on resources at a more critical point.
Do the homework. Fatigue with the whole thing may be setting in, but resist being resigned to fate. Fate (as someone should have said, if they haven’t already) is what happens to people who don’t shape their own destiny. By now it’s not that difficult to see what is going to happen in your market in any of the likely scenarios if you do enough research.
Think about the future, engage with your people and prepare your business. And if you haven’t already done it, do it now.
Jonathan Oxley, Northern Powerhouse Ambassador and former regional chairman, Institute of Directors