More Risk? More Planning!
Just when you thought it was safe to go back to work … everything has changed. At the start of 2016, the political environment looked set fair. The economy was recovering, at least in the UK, where we had a majority Government after five years of a sometimes fractious coalition. Foreign and economic policy were conducted within a long-established and well-understood framework. The USA and NATO acted as a strong military protector, guaranteeing geopolitical stability. The EU delivered a stable and reliable single market, enabling barrier-free trade across the largest single market in the world. Prosperity was rising after a difficult few years. What could possibly go wrong?
We all know the answer to that now, of course. A series of political surprises and shocks has thrown the cards up in the air. We don’t yet know where they’re going to land. The Brexit referendum delivered the ‘wrong’ result for most of business, creating massive uncertainty and, most likely, imposing extra costs and burdens well into the future. The unexpected result led to the rapid dismantling of the Government and a whole new team at the top. They in turn have since struggled to agree, let alone articulate, their plans for the future. Their initial statements contained some alarming attacks on business, although Theresa May has since stepped back from several of her more radical ideas. And nobody knows what sort of relationship we’re going to have with the EU in future – or even, perhaps, whether there will be an EU to have a relationship with.
Since then, as we're all too aware, the geopolitical picture has been disrupted even further by the election of Donald Trump as US President. A thin-skinned TV star with no political experience finds himself the leader of the free world, finger poised over his Twitter account and the nuclear button. In the aftermath of the great Financial Crisis, plenty of people are feeling angry, hurt and helpless. Both Trump and the Brexiteers have tapped into this disaffected mood brilliantly and now stand at the pinnacle of the Establishment they once despised.
It’s a truism that ‘business hates uncertainty’. So, what to do when there’s far, far more uncertainty around than anyone expected even a few months ago? As Michael Moore pointed out in his recent School for CEOs blog, the answer is to plan. Identify the major factors that could affect your business, both the things you can control and the ones you can’t. Develop scenarios around each of these factors – whether the UK remains in the EU single market, for example. What impact would they have on your business? What could you do to mitigate them? What actions can you take now in preparation or just in case? In uncertain times, creative strategy, flexible planning and flawless execution become even more important than usual. And that in turn is your opportunity to steal a march on your competition. Never let a good crisis go to waste!
© Patrick Macdonald 2016
This blog article originally appeared on the e-learning site accountingcpd.net.