The Management Lessons from Brexit: Alignment Matters
As I write, the odds quoted on the Betfair betting exchange imply a 73% probability that the UK will vote to Remain in the EU on 23 June, just 3 weeks away. 73% isn’t 100%, of course, but it looks very likely the status quo will win the day.
The referendum battle takes those living in the north back to October 2014 and the Scottish independence referendum (Scexit?). Very similar battles were being fought for the heart and soul of the electorate. The messages put out by the Brexit ‘Leave’ camp today are very similar to those put out then by the Scottish ‘Yes’ campaigners. In both cases, those who want to change the status quo (Leave/Yes) are passionately convinced that they are right, that the sclerotic, outdated central institutions of the larger body (Brussels/Westminster) are undemocratic cabals, run by an elite who don’t represent the relevant electorate properly (UK/Scotland). We’d be better off leaving the larger body and standing on our own two feet, as we used to, and then we can determine our own future rather than being ignored by those who are currently in charge (Berlin/London).
Lined up on the other side are, broadly, the Establishment. Most serious business leaders, independent think-tanks, army generals and so on believe that the current arrangements, while not perfect, are broadly satisfactory. Dismantling the work of decades/centuries will, at the very least, involve an immediate negative economic shock to the UK/Scotland while the longer-term upsides proposed by Leave/Yes are vague and unverifiable. Sure, we need to reform the way we do things, as always, but let’s not throw the baby out with the bathwater.
And when Remain wins the EU referendum, as it probably will, it’s likely the same cries of betrayal will rise from the Leave camp as were offered by the Yes side after the Scottish referendum. The electorate were seduced by specious promises from the Establishment who ganged up to prevent the electorate taking the course they should have taken if only, etc etc.
Now, the Yes side in the Scottish referendum came very close to pulling off a massive upset, causing panic across much of the UK political elite. The result, 45%/55%, was much tighter than anyone had anticipated even a few months before the vote. Right now, it doesn’t look probable that Leave will achieve this. Why not?
There are plenty of reasons, of course. I believe one of the strongest is that the Leave campaign is not well aligned around a single plan with a single set of clear messages. Their main spokespeople (Boris, Michael Gove, etc) seem to be singing from related but not unified song sheets. It looks and feels messy.
The Yes campaign, however, was brilliantly run, tightly aligned and disciplined. The leaders and the canvassers sounded passionate and (to many ears) reasonable, with carefully-crafted messages designed to appeal to key segments of the audience. The air war (public speeches, TV appearances, etc) and ground war (door-knocking, leafleting, town hall meetings, etc) were well-coordinated.
As a result, the gap between ‘Yes’ and ‘No’ steadily narrowed during 2014. The campaign was worth at least a 10%-point reduction in the gap and probably more. Leave show no signs of achieving this. The polls haven’t really shifted. Their lack of alignment has cost them dearly.
The same is true in business. If strategy, execution, people, branding, incentives, operations, sales channels, finance, risk management, etc are well aligned, it makes a huge difference to the success of the business. Poor alignment often leads to disaster. If you’re a Leave-er, that would be the thing to blame on 24 June.
© Patrick Macdonald 2016