Brexit, scenario planning and the known unknowns

28 June 2017

The UK’s negotiations over our membership of the European Union began last week; in around 22 months we should have a good idea of what the final Brexit position will look like.

It’s hardly surprising that businesses find planning in this environment challenging. But it’s important to remember that however uncertain the world is around us, businesses have control over their future – and that uncertainty isn’t the same as being completely oblivious to what the future might hold.

That’s why scenario planning is so vital. It’s easy, and tempting, to put off the big decisions at a time like this. But delaying important decisions is a decision in itself. It’s important to remember that from a business perspective, nothing in the past month has changed; it’s as unclear what the post-Brexit future will look like as it was before the General Election. What we are dealing with, to borrow a phrase from Donald Rumsfeld, is “known unknowns” – and that’s good news. We don’t know exactly what the future will look like, but we know what the various options could be.

The potential Brexit outcomes effectively come down to degrees of the restriction of movement of people, goods, services and capital. That much we know. Thanks to the power of data analytics, we also have the capability to calculate what each of the possible (it’s important to think in terms of possibilities, rather than likelihood) outcomes would mean for a business. Businesses are already adept at workforce planning – so applying that skill to possible Brexit futures is the next logical step.

So, for example, if you think that in the future there could be significant restrictions on the movement of lower-skilled workers from the EU into the UK, what would that mean for your business? And if the restriction was extended to skilled workers too, what would that mean? How many of your workers are from the EU, and which category of skills would be most affected? You can also assess the impact on the business so far, which will give you a good idea of the sensitivity of the business to Brexit: What’s your usual attrition rate? Has that increased recently? How has that affected your skills profile needs and ability to obtain key talent?

So far, so theoretical. But this is also about turning plans into action. Brexit has already had some impact on the availability of resources to some businesses; this isn’t a problem for the future, it’s happening now. So, what can you do now to mitigate identified risks? Could you move work to where the resources are based? Could some of the labour-intensive processes be automated? Do you need to change your recruitment strategy? Or your training and skills development strategy?

Planning has always been an essential part of strong businesses and this is no different. We’ll probably only have complete clarity on what the future holds right at the end of the negotiation process, so waiting for the full complete picture will mean you’re too late. Scenario planning now puts your business in a position to adapt, grab new opportunities and take full advantage of whatever the ‘new normal’ turns out to be.

Brexit tool 2

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