Whatever your business exposure to the EU market, clear thinking and leadership will be needed as we enter a period of economic uncertainty. If you are waiting to see what happens before deciding your next steps, I would like to suggest an alternative. Set aside some time with your leadership team to systematically understand the range of possible futures and use this to develop outline action plans ready for when you need them.
Let me give you a little more detail. I am basically outlining a business technique called scenario planning. Famously it was used by Royal Dutch Shell to foresee the possibilities of both the Arab-Israeli war and the fall of the Berlin Wall and develop response plans. In both events, Shell were first to react and the company grew revenues and market share.
How would I apply it in my company?
Broadly, there are 4 steps in scenario planning;
1. Identify the external variables that are key for your business (e.g. the rate of GDP growth/decline, the exchange rate, how long it takes the UK to leave the EU etc.)
2. Score each variable on its Impact on your business and the Certainty/Uncertainty of it happening
3. Use the high Impact and high Uncertainty variables to develop scenarios. Write a clear narrative for each scenario explaining how the market would develop
4. Finally, write a plan to benefit from or defend against each scenario (if it happens). Actually, some response plans for different scenarios may have similar features which may strengthen the case for implementing these sooner, especially if they take time (e.g. setting up a subsidiary company in Ireland and opening a local bank account)
What are the benefits?
The purpose of scenario planning is to deliver big benefits;
• Be the winner – see the opportunity/threat before it fully emerges and react before your competitors
• Stay objective – take the emotion out of Brexit, systematically work though what could happen and what you are going to do
• Exercise leadership – get on the front foot, think it through and set the company direction
The Brexit uncertainty is an example of where scenario planning could provide structure and real insight that could substantially help your business. This is a team exercise so it provides an opportunity to get the leadership team on the same page, working through the process together ready to make big decisions.
The scenario planning process is not expensive so, if you are interested in having an informal chat, then please give Nick Milner a call on 07764 658184 or send him an email at firstname.lastname@example.org. You can also click here to download a copy of the Milner overview of the mechanics of scenario planning.< Back