Business Continuity Blog

With significant experience in business continuity management consulting, John Robinson shares his insight.

Post-Brexit: What Now for Resilience and Business Continuity?

Posted by John Robinson on June 27, 2016

Brexit, organisational resilience, business continuity

Depending on your point of view, news about the UK’s departure from the EU may represent a potential problem, a golden opportunity or a source of bemusement.  But what does it mean for organisational resilience and business continuity

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Resilience has provided a unique selling point for many UK-based entities, beginning with marine insurance some 300 years ago.  This is not about to change and as a nation we continue to lead and innovate, driven by our progressive risk management institutions and industries.  Resilience is ingrained in how we think and act and consequently, strongly flavours our response to Brexit. 

EU-Organisations

If you’re reading this from within the EU, you probably wonder what the UK was thinking.  Bizarrely, almost all trading organisations in the UK are Europhiles and greatly value membership.  However, the impact of EU social and cultural change was not enjoyed by the popular majority, triggering Brexit.  C’est la vie. 

Of course, this means that almost all UK business wants to trade with the EU and possibly vice-versa, but now face some level of restriction after the two-year exit period.  Unless we are able to arrange viable alternative channels, the sharing of resilience ideas, advantages and systems risks being much reduced.

Non-EU Organisations

If you represent a non-EU organisation that relies on the UK, you probably won't be directly affected by Brexit, but you will want assurances regarding quality, reliability and permanence of supply.   My advice is to re-apply due diligence checks and then seek to improve your position.  What do I mean by this?  Buying from the UK will become operationally advantageous, because we will by necessity become more responsive outside the EU bureaucratic framework. 

In the short term, the cost of Sterling may also fall, relative to the Euro, making us financially more competitive.  We will be less constrained in what we produce, and better able to meet country requirements without incurring costs sometimes imposed by inapplicable EU rules. 

Looking further ahead, deregulation may even offer the possibility of the UK becoming a regional trade hub, similar to Dubai or Hong Kong, with geographic advantage, low costs, competitive taxation and fewer restrictions.

UK-based Organisations

If you are a UK-based organisation, you probably already embrace resilience, driven by insurers, customers and stakeholders to ensure their interests are properly protected.  If you don’t, then you probably should. 

The fact is that the UK will be trading globally, no longer sheltered by the EU umbrella, and we need to seize every advantage to ensure continued growth and success.  Resilience is one such advantage and there are powerful reasons why UK organisations need to embrace it now:

  • We each inherit risks via our supply chain.  Any UK-based organisation that relies on EU trade may now face increased costs.  This means that unknown to you, a critical supplier may be becoming less stable.  You need to know which suppliers are critical and how Brexit is affecting them before they let you down.
  • We may face protectionism both before and after the two-year period, since Brexit success might prove contagious. This will manifest as increased sensitivity for UK firms, where a lapse in supply is more likely to trigger termination or non-renewal, reducing our tolerance to disruption.  To counter this, we must offer demonstrably better resilience than our EU neighbours
  • The return of staff to EU countries may result in skills shortages.  However, some international organisations may also relocate, releasing UK-based staff and increasing skills availability.  We need to anticipate and plan for this with skills inventories and pro-active HR management
  • Brexit may tempt organisations into making pre-emptive cutbacks.  Of course this may be necessary, however, so-called efficiency savings can be accompanied by a loss of deep experience as the best leave to snap up the top jobs.  This leaves the organisation vulnerable, unable to expand or maintain production facilities acceptably

Is the UK’s threat profile worsened as a result of Brexit?  I doubt it.  Nationally, we are already better-positioned to defend our borders than many countries within the EU, although we may have short-term key supply agreements that need to be re-sourced or re-negotiated.  Locally, I believe few organisations’ direct threat profiles will be substantially altered by Brexit, other than via the effects identified above. 

In Conclusion

  • Assuming Brexit goes ahead and in whatever form, all parties will have two years in which to prepare
  • Post-Brexit resilience economics may favour the UK, with few if any new threats and more flexibility in the way we apply controls
  • Organisations generally need to build more resilience into products, services and supply chain; the UK is a centre of excellence, well-defended and may be able to offer greater resilience than many EU member countries
  • We all need to monitor the changing situation. Review your Business Impact Analysis (BIA) more frequently and respond with improvements.  Use it as a basis for Brexit decision-making
  • Improve the organisation's resilience capability maturity. Reinforce its protections and test its recovery strategies
  • Risk-assess all your direct and indirect suppliers on a frequent basis. Identify those that are business-critical and find reliable alternatives
  • Systematically identify, manage and plan to retain key skilled staff.  Cross-train them to build skills resilience and create self-sustaining centres of excellence within the organisation

The overwhelming sense of this blog is positivity, not just for the UK, but for all parties.  I view Brexit as a mostly socio-political decision with  trade effects arising from the necessary application of EU club rules.  I remain optimistic that ultimately, these will be interpreted for the benefit of all.  Time will tell. 

In the meantime, the need for national and organisational resilience grows, demanding ever-greater reliability, certainty, confidence, and I believe our deep expertise offers a powerful advantage. 

Tags: manufacturing