Even if it were not made explicit, when we voted eighteen months ago we knew Brexit would have a cost. However as we draw inexorably closer to March 2019 and the UKs exit from the EU we are, as a country, frankly none the wiser on what Brexit will look like, its implications, or its cost.
The negotiations have been described as ‘a staring contest’ where neither side can afford to blink first. Where nothing is decided until everything is decided. A government minister has put the odds of the UK ‘crashing out’ with no-deal at 60:40. Even if the terms of divorce can be agreed, could all necessary arrangements be implemented within a two-year transition window?
Given the fog of uncertainty that persists what is business supposed to do? The short answers is everything possible.
Businesses have responsibilities to their workers, customers, communities and shareholders. Businesses needs to act responsibly and take action on Brexit now. They must make plans to ensure their business continues. Not just those businesses responsible for keeping the lights on, food on the shelves and planes in the skies; business large and small have responsibilities to their stakeholders.
Given the seismic nature of Brexit you might expect those charged with representing business would step up and provide practical support and advice. However the British Chamber of Commerce – which represents 75,000 businesses – has published just two guides on Brexit on its website. The first, titled ‘The answers businesses need’, is a poorly formatted table of questions with RAG ratings, and answers no practical business need. The second – a ‘Business Brexit Checklist’ –consists of 22 actions across four catch-all sections. Questions appears to be the BCCs modus operandi since these ‘actions’ consist entirely of questions. Asking questions is good provided they elicit answers, so it seems the BCC is saying to business leaders – over to you.
So let’s ask, How much is Brexit going to cost your business? What is the impact?
You might wonder how can you answer when so much of detail remains unknown yet the process is relatively straightforward. For example, the BCC checklist states, “With potential customs checks between the UK and the EU, there may be delays at the border. Do you need to increase your inventory and/or buy additional storage space?” Well – do you?
If you’re business operates in a supply chain for non-perishable widgets then additional storage might help, but in order to know how much additional storage you need you need to explore how potential delays might arise and how long they might last.
Whatever your business the process is to identify the key sources of uncertainty for your business, estimate credible ranges of impacts and the probability of occurrence, evaluate, make risk-based decisions and where appropriate take proportionate action.
Given the breadth of Brexit related issues from maintaining your workforce to the legality of contracts, additional storage may not be the most pressing for many businesses however it serves to illustrate that estimating and evaluating uncertainty is a core management task. Brexit is a significant uncertainty facing UK business and business leaders need credible information with which to make decisions. Quantifying risk is essential; qualifying as ‘High, Medium, Low’ or scoring through a flawed risk matrix is not sufficient.
At Risk Insights we have developed Risk Insights Explorer, a risk tool specifically designed for undertaking first-pass evaluations of the sources of uncertainty, whether for a specific project objective, strategy decision or – in the case of Brexit – a model that can help business quantify Brexit risks. Risk Insights Explorer is focused on addressing uncertainty, risk elicitation, and quantification, allowing users to estimate and evaluate uncertainty, and to visually explore risk interconnectedness.
To learn how Risk Insights holistic approach can support your Brexit agenda, contact me today.