Riding the ripples – planning for the less obvious effects of Brexit

Paul Connor

By Paul Connor

21 Mar 2019

Whether the deadline for Brexit is extended or not, we all know that change is on the agenda for organisations across the UK. As the threat of no deal looms, many UK-based organisations – especially those with European or global interests – have already started considering their plans with regards to location, labour migration, and potential changes in global trading rules.

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In our series on Brexit, we’ve already discussed the consideration organisations should give to governance and communication, and operating models, as part of their Brexit plans.

But is that enough? Though the more ‘obvious’ implications around Brexit may have been discussed and planned for, change of this magnitude can have myriad effects on an organisation that are not necessarily obvious.

This next article in our series examines some of the impacts Brexit could have on your organisation that aren’t immediately obvious – and what you can do to manage those effectively. 

Where do the risks lie?

In our experience, organisations with mature plans around Brexit have focused on obvious risk areas – supply chain, import/exports, employing entities to name a few.

However, when it comes to implementation of plans, consideration has not necessarily been given to the potential further impact of these changes on the wider organisation, in particular support functions such as finance, IT, or HR.

As an example, consider a decision to relocate employees or move employment entitles to a non-UK entity.

Aside from the transition itself and the processes that ensure legal compliance, a further load will fall on functions such as HR and finance as they to ensure appropriate governance and compliance measures are taken, while dealing with a higher volume of queries from the rest of the business as the change takes hold. Not only this, but IT will need to adapt your organisation’s systems to cope with all these changes. And so it goes on. As these teams strive to manage this new workload, important strategic activity is put on hold.

Around 40%  of respondents to our survey reported that their organisation has given no consideration to whether their central support services will have the capacity to handle the impact of Brexit. Given the above, it would be logical to make this an area of priority.



Increasing demand for support, increasing need for knowledge

Aside from the increasing demand for the services and support from central functions, Brexit is likely to generate queries and issues of a nature not previously encountered. Our experience working with organisations has shown it is vital that teams are equipped with the specialist knowledge to deal with these effectively.

For example, if you plan to grow more of your own talent in the UK to address potential labour shortages, what knowledge, information and understanding do your leaders need to be able to maximise the effectiveness of your resourcing plan and programme? What mindset barriers will you be up against? How will organisational structures need to change to accommodate more ‘inexperienced’ resource?

An example
Our client moved the employment entity for a significant number of UK employees to a non-European, non-UK entity to help mitigate risks posed by Brexit. But they hadn’t fully realised the challenges that would bring – chiefly that the HR support unit in the new entity country needed to provide support to 25% more people, would have an influx of queries and needed a detailed understanding of the implications of employees moving from one country’s taxation regime to another. In this instance we were able to support them to ensure things stayed on track, but it’s a perfect example of how Brexit increased the strain on a support function that had been underestimated and not adequately planned for.

The ripple effect

If support functions in an organisation are overloaded and lacking in specialist knowledge, those factors can have further unintended consequences across the organisation.
To operate successfully in their new context, your organisation’s functions may need to implement new processes or ways of working across the organisation. If the rest of the organisation isn’t made aware of these changes in good time, then extra delays, frustration and confusion are added while they adapt.
The key consequence of that is that day-to-day work becomes harder; delivery and operational teams can find their ability to operate impaired as they can’t access key information or support. Given the challenging market conditions that Brexit is contributing to, anything that affects your organisation’s ability to operate effectively is to be avoided.
And the ripple continues as, just as with support functions, strategic work in other areas of your organisation can stall. Initiatives that will deliver bottom line benefit can slow down or at worst, not get done, as people strive to get through their normal workload.

The role of leadership

In these turbulent times, a key factor for success and navigating these ripple effects, will be the quality of leadership your organisation provides to its employees.
Managers and senior executives who lead with empathy and resilience ensure an organisation retains its most valuable resource: its skilled and dedicated individuals. If the maxim that 90% of the success of a strategy is in its execution is true, it follows that those executing it must have the tools to evolve and thrive successfully alongside the organisation.
In fact, done well, engagement should increase as employees feel more confident of their employer’s capability, regardless of what comes.
Key things to think about when considering your strength of leadership are:

  • How diverse is your board?
  • Do they represent a range of worldviews, lifestyles, and skillsets?
  • Do they understand the realities of the threat of Brexit for non-UK workers?
  • Do they know and connect with the decisions these people are facing and what those decisions might mean for them?
  • Do they understand the emotional concern and impact that this may have?
  • If they don’t, how well-equipped are they to provide support and guidance to their teams?
  • How able are they to make decisions to protect their workforce?

The Connor INSPIRED performance programme pinpoints the development of skills and capabilities your leaders need to meet this challenge head on.

Revisit your plans

There is still time to revisit your plans and look for those hidden dangers in your plans.
First, work through a sequential, step-by-step account of what will happen as a result of your plans. This could help you identify impacts on departments, processes, and people that you have not previously considered.
As you identify those impacts, list out the consequences for the individuals involved.

  • Do they understand the potential impact on others?
  • Do they have the right knowledge and information to do their job within a different context?
  • Do you need different people with different knowledge & skills? Do you need more people?
  • Do you need to help your existing teams develop new skills?
  • Are you organised in a way that will enable you to meet new governance or compliance requirements?

As you work through these questions you will start to build a very detailed picture and gain a greater feeling of control over your organisation’s journey through Brexit.
Once you’ve documented the ways in which your employees are likely to be affected by your plans, you can then start to develop a plan to support them through that change. How can you give your employees access to specialist support and advice they might need to help them face the uncertainty in the knowledge that you are with them and supporting them?
It can feel like a mountain of minutiae to work through – but the benefits of doing so are profound. With a comprehensive plan that truly accounts for the full impact of Brexit, your organisation will be ready to weather whatever storms come – Brexit and beyond.

At Connor, we’re experts in change management – and there aren’t many changes bigger than Brexit. If you need help creating or reviewing your Brexit plans, we can help. Our extensive experience in supporting organisation through change and developing leadership agility and capability can help you ensure your organisational structure at a high or detailed level and leadership capabilities are right to meet the Brexit challenge. We can also help you plan out communications and support for your employees to keep them engaged, focused and happy – meaning your organisation stands the best chance of thriving in a post-Brexit world.

To start your organisation’s thinking on these areas, we’re offering a free consultation on your organisation’s preparedness for Brexit. To take advantage of this, visit our website, or contact Sharon Platts at sharon@connor.co.uk or on 01491 414010.

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