BREXIT: Preparing for Brexit will help deal with other business shocks, says expert

This is part of Out-Law's series of news and insights from Pinsent Masons lawyers and other experts on the impact of the UK's EU referendum. Sign up to receive our Brexit updates by email. 

Dr Lynette Nusbacher, a former head of the Strategic Horizons Unit in the UK Cabinet Office and former lecturer in war studies at Sandhurst, said that going through the process of analysing how a UK exit from the EU would affect their business will help them deal with other surprise events in an uncertain world.

"If you prepare for the EU referendum by taking a systematic look at the future then you are preparing yourself for any different future," she said. "Looking in detail at what the results of the referendum might mean, forcing yourself to confront the strengths and weaknesses of the European project and the UK government and economy in relation to it – conducting that analysis is useful."

Nusbacher said that the process of examining the factors that have a big impact on a business can help that organisation to move towards a better planned, more strategic approach to events that it knows are coming, as well as to unexpected shocks. “Looking at the alternative futures created by the EU referendum opens a window, and once that window is open we can look around and see more realistic possibilities.”

"This prepares you to take the next expected decision, whether it's the outcome of the US election or the Q2 figures," said Nusbacher. "But it also helps you deal with unexpected futures, for the big summer hurricane, or the great fire of 2016. Taking an analytical, strategic view of the future this year gives an organisation the skills and the orientation to deal with unexpected futures and catastrophes of any sort."

When they analyse the issues companies should not accept the stark terms of the public referendum debate, said Nusbacher, because the post-referendum reality will be more complex than that rhetoric suggests whichever way the public votes.

"The advocacy around the referendum is very binary, but the fact is that in a complex non-linear system like the economy of the UK or global trade, nothing is that simple. And if we don't view the world post-referendum as a complex but fundamentally neutral phenomenon, not heaven or hell but another real world, then we won't be in position to take advantage of it. We will find ourselves reacting to what happens and experiencing strategic shock, unable to cope as well as we should with what comes after the vote."

Nusbacher advises companies on how to look ahead and plan strategically. She aims to help them come up with a strategy and align the operations of a company so that it acts only in line with that strategy.

She said that companies are generally not very good at preparing for future events, even when they know they are coming. "Most businesses struggle to look past the end of the quarter," she said. "Some businesses manage to look out a year in advance and it is the rare business that is capable of taking a strategic three or five year look forward."

Without full commitment from a company's chief executive and board a company will not be able to become a strategy-led one, said Nusbacher, because doing so involves aligning the whole organisation so that every activity is measure by how it advances that strategy.

Executives know how this works because they learn it in business schools, she said, but most leave it behind when they are faced with operational pressures.

One place where strategic thinking about the future has been central to decision making is Shell, said Nusbacher. "They are very transparent about the way they make strategy and have futures orientation and, perhaps most importantly, they have the strategic thinking unit firmly welded to the office of the chief executive. Shell publishes scenarios which everyone must pay attention to when making any decision, which is very impressive."

A more common approach in companies is to pay lip service to the idea of strategic planning but to change little, she said.

"The strategy is not about words on paper, it is about aligning ends and means in order to achieve a vision that is of significant interest to the business," said Nusbacher. "If the ends and means are described in a clever strategy document but the business does not align itself in every respect to only expend effort that works towards the strategic aims, then that firm will never be able to achieve strategic goals. It will charge in all directions at once."

Companies should work hard to assess what the process of the EU referendum and its result will mean for their business, their clients and their markets, said Nusbacher. But they should also use this as an opportunity to change the way they think about the future.

"The referendum forces us to recognise that there are decision points like this in our business lives every day, and in order to understand the implications we must take a strategic view of events rather than fly by the seat of our pants and fight fires as they come up," she said.

The reason they should do this is that it gives business advantage. The companies that do this well are more likely to succeed that those that don't, she said.

"A business that takes into account the possible results of the referendum and anticipates not only the threat but also the opportunities, is one that will be poised to succeed," said Nusbacher. "A business that doesn't do that is going to find itself struggling."

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