What are you doing to prepare for the future?
Do you think this could be the most elaborate April Fool’s Day joke ever? Better than the spaghetti trees and the new species of flying penguins put together? Are you assuming this is, in fact, the case and that on April 1st 2019, David Cameron, Teresa May and whoever, is going to pop up and shout “of course Brexit isn’t happening – April Fool!”.
Or do you think Brexit is actually happening, and despite the alternative future trading relationships extremes being readily discovered, you have decided that doing nothing is the best way forward.
Inaction is a decision, make no mistake.
Kellogg’s is a perfect Consultant’s Case Study. In the early 1920s they were a new, and not the main, player in the US breakfast cereal market. When the Great Depression happened, their competitors hunkered down and hoarded cash. But not Kellogg’s, they increased advertising, despite the great uncertainty, and is now the dominant supplier. I’m sure you have eaten a Kellogg’s product.
The uncertainty surrounding Brexit is real enough, and President Trump spraying tariffs about doesn’t make it easier, but the extremes are fairly clear.
The Brexit extremes range from the same as now with full access or no special relationship and fall back on WTO Rules instead. And all compromises in-between of course.
Have you considered your business plan for BOTH extremes? What would you need to do, in both scenarios, to improve your competitive advantage and grow profitability?
Minimise the uncertainty
Planning in this way, for each scenario, removes the uncertainty.
You can estimate the outcomes for the series of actions you can take in both cases. The outcomes being in terms of the financial results, factored by the likelihood of that outcome.
For a simple example, suppose a rebranding is one potential beneficial actions. You can estimate the additional sales turnover from the rebranding and get an estimate of the cost. Then you make a judgement on the probability of the rebrand being successful and compare the probability weighted return from rebranding with the cost. The cost is unchanged because whether it works or not, you paid for it.
Planning for success
Each node of your series of actions has to add up to 100% of course, and the alternative decisions and probability weighted returns can be rolled up across every decision you have to make.
Do this for the alternative scenarios and you will find that some actions are common, and you can now see you should do them right now. Brexit, whatever it will be, has no impact on this part of your future business development.
Competitive Advantage starts here
All this is best discussed and agreed with your senior people and laid out on a spread sheet. Your Financial Director will love this!
Don’t make your business the April Fool, start now to improve your competitive advantage.