What do the Brexperts know that you don’t?

Executive Summary

Distilling wisdom from the most prominent Brexit leaders engaged on Brexit programmes over the last two years, this paper examines ideas and insights around Brexit readiness that could help you identify and solve challenges you may not have been aware of. We interviewed and surveyed those responsible for some of the largest Brexit programmes, seeking to understand the core challenges organisations have faced, their current concerns, and the strategies that have worked so far.

Brexit best practice is evolving every day. We hope our Brexit experts can provide you with insight and answers to the following questions:
  • How can you forecast, manage and reduce Brexit related costs?
  • How do you prioritise competing strategic objectives?
  • How much Brexit planning must you do?
  • What common Brexit programme mistakes can you avoid?
  • How do you structure a Brexit team?
  • What skills should you look for, and why?
  • How do you build and rapidly deploy Brexit skills precisely where you need them, when you need them?
  • What is the RiverBench, and how can it solve your Brexit readiness challenge?

Introduction

“If you have a good eye and a steady hand, it is easy enough.”
David Davis, December 2016, dismissing fears a Brexit deal might be difficult.

In early 2016 The River Partnership began to build a sizeable network of leaders and experts responsible for Brexit related change. In the weeks following the referendum result, I authored a white paper on Brexit’s impact on regulations which was published by PRIMIA, the international risk members body. The paper reviewed and analysed the thoughts of prestigious leaders across the regulators, strategy and consulting firms and the CRO, CCO and GC offices of major financial services firms battling with MiFID ii, SM&CR, GDPR and the Basel initiatives.

Almost three years on, we have now built a core expertise in managing and resourcing Brexit programmes for major organisations. With a decade’s experience of completing leadership search mandates for strategy and consulting firms and financial services companies behind us, River have been able to leverage an extensive network of eminent professionals across risk, regulation, change, strategy and technology.

In 2018, River agreed to become the Brexit programme outsourcing supplier for an expert strategy advisory firm. We now manage a pool of 60 Brexit Experts, (or Brexperts, if you will) who can be deployed efficiently on Brexit change projects ranging from: Brexit impact assessments and gap analysis; policy design; target operating model change; regulatory change programmes; legal review; technology infrastructure transformation; location strategy; supplier, market, competitor, organisational, financial and economic analysis; and overall strategic advice.

The River Partnership have organised this talent into an efficient product for resource management: the RiverBench. The RiverBench consists of a large pool of highly qualified and experienced Brexit professionals, fully referenced, compliant and available for interim assignments at short notice. The RiverBench community is structured in a way that solves the key problems that arise when there is significant demand for the same skills:
  • Typically, when an experienced resource is required, both time and talent is scarce. This has been evidenced by the vast number of simultaneous Brexit programmes running to similar timelines.
  • Waiting for the right resources to become available, or having to replace key people at short notice, can lead to devastating cost overruns, project delays, misdirection or redirection of resources, and inadequate resolutions.
The RiverBench solves these issues by leveraging a large enough group of reliable talent to ensure that a team is available within a defined timeframe (days not weeks). Our RiverBench product manages a large expert community, monitors availability and provides you with optionality.

Over the last five weeks, we surveyed our Brexperts and conducted interviews to understand and ascertain the main issues, challenges, worries and themes relating to Brexit readiness. This paper outlines the views of senior experts on the front line of Brexit change.

We hope the results provide valuable insights for executives with Brexit change accountability, consultants and change professionals working on these kinds of projects, hiring managers who seek this sort of talent, and strategic leaders still battling with the myriad of Brexit permutations and what that means for their organisations, their budgets, or their careers going forward.

“Getting this done is as difficult as getting an egg out of an omelette.”
Pascal Lamy, the former EU trade commissioner who also led the WTO, speaking in February 2018.

What is worrying you most about Brexit now?

Unsurprisingly, the greatest fear outlined was that Britain will be forced into a 'no deal’ Brexit scenario. The resulting chaos and economic impact has been well documented in the press and would surely be devastating for the country and the businesses that trade here.

Further to this, several experts were worried about the impact on our ports with the length of delays likely to pose considerable problems financially and operationally. The real danger of urgent medical supplies being tied up is a popular news story, however, port delays would also impact in several other ways. Another significant concern raised by our respondents was of course the issue of financial passporting rights and how this would affect the economy, employment, financial services strategy and regulatory change.

Whilst the lack of accountability from politicians and the lack of clarity and direction from government was seen to be a major contribution to the uncertainty that engulfs Brexit, our Brexperts felt that the self-interest of politicians was a primary issue. How impactful will egos, political infighting and party politics be in the final weeks of Brexit negotiations here and abroad, in the government and the commons?

Our Brexperts recommend that you:
  1.  Seriously prepare for a No-Deal scenario.
  2. Gain insights into personal and political manoeuvring across all parties and stakeholders.
  3. Analyse the impact of Financial Passporting and the supply of critical goods to your business and prepare alternative options where possible.

What are the most important things to get right?

Trade dominated the answers to this question. Almost all respondents felt ensuring continued trade with the EU is the primary problem to solve.

Interestingly, a large number felt that setting the right strategy and strategic Brexit objectives was still high on the agenda. A worrying sign given that we are in the final weeks of Brexit planning. Nevertheless, understanding the biggest impacts of the various Brexit scenarios was emphasised as fundamental to future decision points. Ensuring senior management commitment and the support of stakeholders across the value chain is more imperative now than ever.

Predictably, financial services was seen as another key area. Major concerns were raised related to outstanding problems including: access to the market, compliance, understanding of regulatory priorities, corporate governance and trust.

The Irish border is clearly a particularly thorny issue to resolve. Many argue the UK’s integrity can only be guaranteed by removing the back-stop that avoids a hard border in Ireland by keeping the UK in the customs union. However, confirming an end date or allowing the British a right to exit, would render this European Union insurance policy useless. Getting this right will remain a high priority for both sides because the EU seek to protect Ireland’s interests and the UK seek to maintain sovereignty in Northern Ireland. Brexit policy experts we asked felt that, as with many negotiations, the outcome will most likely be dictated by the side with the more powerful hand. Not reassuring news for Theresa May and her threadbare majority against the 27-member states of the EU.

Our Brexperts recommend that you:
  1. Limit your exposure to trading difficulties.
  2. Ensure your Brexit strategy aligns with your business strategy.
  3. Create detailed plans for managing regulatory risk and operational risk across several Brexit scenarios.

What is the ideal Brexit team make up?

The overwhelming view was that because Brexit is a critical business strategy decision impacting all aspects of a business, the responsibility for the course of action must rest at the top. Impacting the entire company, the Brexit team must be both broad and powerful. Therefore, the ultimate responsibility for Brexit rests with the CEO and Board with day to day responsibility managed largely by the COO’s office.

According to one senior Brexit leader in our network, “No one knows their business better that the operational management of the business, but as they are generally not geared to adapt to very rapid and unpredictable fundamental changes in their business environment, the ideal Brexit team must not only be able to check the technical preparedness of the company, but often, more importantly, be able to assist the company to think as a single dynamic entity.”

The emphasis of Brexit teams centres around change management and involves all operational levels of the company. Engagement with all external actors including suppliers, clients and public services, is vital. Senior level representation for all the impacted business units is incredibly important. Furthermore, executives who have the power to address and remove obstacles, change direction, support initiatives and make strategic decisions must help to lead and empower Brexit teams. Legal, regulatory and compliance SME’s were also heavily referenced in the ideal Brexit team. Operational and IT SME’s were similarly regarded as important to the agenda. Several respondents talked about how there is a materially larger impact when there is a separate, ring-fenced change group that can work with the business to make change happen.

Our Brexperts recommend that you:
  1. Ensure Executive sponsorship for Brexit readiness programmes.
  2. Include SME’s and Brexit Policy experts.
  3. If required, supplement your teams swiftly with experienced Brexperts from the RiverBench.

What is the average length of a Brexit programme?


Several Brexperts mentioned that executives have largely underestimated the length of a Brexit programme. With the average length time for a Brexit programme over six months, it’s important to understand these base rate timelines when forecasting costs and allocating resources. A short Brexit programme is statistically unlikely.

What skills are most important?


Both change skills and Brexit policy knowledge are in high demand. Our respondents felt that having a large enough change team was essential to meet the onerous Brexit deadlines. Skilled change leadership is of course incredibly important to the running of the team, with Partners of Consulting Firms and Heads of Change cited as the most efficient at managing large groups to achieve desired change outcomes. Deep Brexit policy knowledge is also hard to find and was regarded as a critical enabler for effective strategy decisions.

What strategic advice would you give to an executive with Brexit planning accountability?

Our Brexperts were able to outline a great deal of useful advice for executives ranging from the granular and tactical to the high level and strategic. A popular and passionately argued theme centred around assessing how the Brexit plan fits within the wider business strategy. Clearly, Brexit planning is a complex issue and the benefits and costs to your organisation must be outlined clearly before a course of action is committed to.

Teaching every level of the organisation to be agile and understanding that the business is existing in a non-predictable environment will allow executives greater advantages as they navigate the twists and turns of policy and strategy. On several occasions the benefit of making tough early choices was highlighted. If an organisation can accept quickly that there are costs to Brexit, the executive can choose to control the cost by taking important early measures rather than taking the cost down the road without having any control over its magnitude.

Furthermore, it was argued that taking a phased approach to cost could pay dividends in this uncertain environment. An organisation must be agile enough to change direction and contingency plans must be thorough. Many experts outlined that it was not enough to have a plan A and B mapped out and ready for April: plan C, D and E would likely prove to be equally valuable!

Given that there is little guidance as to which option the UK will have and it’s clear time is running out fast, several experts strongly advised to plan for the worst-case scenario. When executives understand the potential decisions they would need to make in a ‘no deal’ scenario, they will gain deeper insight into the most impactful and value destroying components, leaving them more equipped to build adequate safeguards and steer resources in the right direction.

One sage expert, however, advised that the best advice was to wind back the clock two years and start the planning process again with plenty of time to spare! Wishful thinking indeed!

Our Brexperts recommend that you:

  1. Make tough decisions early to allow for increased control of costs.
  2. Map out multiple plans so that your organisation can be agile to the changing Brexit environment.

What has hindered Brexit programmes so far?

The purpose of Brexit programmes is to safeguard against future business risk. Finding a clear path to sustainable business growth in unchartered waters is fundamentally difficult. Brexperts work with imperfect information to build a picture of weighted risks, hoping that their estimates of the desired target operating model, the competitive landscape, the political and economic climate and the legislative and regulatory parameters become clearer with time.

Brexperts we surveyed and interviewed felt that the climate of uncertainty was severely damaging to their programmes. Political promises have been misleading and inadequate and business leaders have feared bringing politics into their meeting rooms from the outset.

Despite the vast sums reported, many executives have been extremely cautious with spending on Brexit programmes. Their hope for a soft, inexpensive Brexit has meant a slower pace of change and a reluctance to incorporate broader business issues into focus before more clarity is given on the post-Brexit future.

Despite extensive lobbying efforts, businesses have been unable to elicit concrete information on what the environment will be in quarter two. Politicians in the UK and EU have provided meagre information on the most important topics, frustrating the efforts of executives to provide confident leadership in their organisations.

The net effect of this uncertainty has been piecemeal Brexit programmes, elongated change processes, inconsistent messaging and limited resources. The overall sense from our Brexit community is that programmes have been hindered by the reluctance of leaders to commit to a full-scale solution, when there’s a chance (or hope) that an alternate and more cost-effective path may present itself.

Our Brexperts recommend that you:
  1. Prepare for the worst, even if you still hope for the best.
  2. Take independent advice on your biggest Brexit concerns from those who can benchmark best practice in your market and gain insights from the corridors of power on the likely direction and future impact of Brexit.

Should Executives engage external Brexit experts?


Perhaps the expert interim leaders, contractors, consultants and policy SME’s we surveyed were somewhat biased on this answer. During our interviews, however, we uncovered the compelling logic behind engaging outside help.

“Experts bring value because they understand what is happening at a deep level,” one respondent argued. “They know what’s happening in the corridors of power in Brussels and they can see how impactful Brexit can be across different levels of an organisation.” It was this insight into the political negotiations, coupled with the ability to benchmark standards and decisions across the industry, that Brexit programme leaders found most valuable.

If independent Brexit experts can distinguish themselves through their contacts, their experience and their knowledge of the wider market, their guidance and independent analysis can help you a great deal in both the planning stage and in delivery.

Our Brexperts recommend that you:
  1. Use independent Brexit experts to give you insights you cannot draw from within your organisation.
  2. Use their independent views and analysis to benchmark best practice in your market sector and find out if you can improve your Brexit programme.

How prepared are the top 100 companies in the UK for Brexit?


These companies were highlighted as having had an impressive approach to Brexit to date;

Our Brexperts recommend that:
  1. Whilst most organisations in the market are struggling with Brexit readiness, taking decisive steps now will help in the long-run.
  2. Companies will need help before 1st April. It could therefore be a dangerous gamble to postpone your decision to add resources to the final weeks when demand will surely exceed supply.

Conclusion – what’s next for Brexit?

Whilst Brexit spend on consulting firms has reportedly reached £75m, the resounding opinion from our Brexperts is that FTSE 100 organisations and major Financial Services firms trading in the UK are still far from prepared.

This paper has explored the worries and challenges inherent in Brexit programmes. Our Brexperts have also offered advice on the skills, structure and strategy for those accountable for executing and delivering Brexit for their firms. With Brexit programmes typically longer than 6 months and the outcome of Brexit both in terms of content and time, still not yet clear, River anticipates continued, growing demand for Brexit change skills and policy expertise.

Following the UK parliament’s rejection of Theresa May’s deal by an unprecedented 220 votes, the current deal appears to be dead. Critics from both sides have reacted to a Brexit that will cost $50bn in exit fees, destabilise Northern Ireland and eject the UK from the single market. Time will tell whether a better way forward can be found, and whether the UK government, UK parliament, or UK population will be the ones who drive it.

Many Brexperts felt that recent developments in parliament have created such a mess that more time is likely to be given so that the UK can find a way towards a more respectable solution. Whether they seek a Norway plus model or go back to the drawing board for a Canadian style deal is highly debatable. A second referendum seems more likely than ever, but the parameters of such a vote is desperately contentious. Any plausible way forward will take time to materialise and with the added complication of the European Parliament elections starting on the 23rd May, extending Article 50 will not be a simple task. We hope your Brexit programmes are well planned, on time, under budget and well resourced. If they are not, our Brexperts may be able to help.

How do you engage a RiverBench Brexpert?
  1. Contact The River Partnership: RiverBench@riverpartnership.com
  2. Outline the scope of work required.
  3. Choose the characteristics and competencies most suitable for your programme.
  4. Meet and assess the most relevant Brexperts.
  5. Engage and deploy your team safe in the knowledge that they have:
  • Independent references on file
  • Relevant compliance checks completed
  • Payroll, administration, onboarding and resource scheduling managed by your RiverBench consultant
To download the whitepaper in full please click here: What do the Brexperts know that you don't.pdf

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