What exit for Brexit?

March 8, 2019

As the deadline looms, nothing is clear about what will be next for Brexit. At this stage, it is everyone’s guess, and I do not have a crystal ball. However, one can make a number of statements about what is already obvious.

First of all, I suspect that everyone would agree that the current situation is a mess and a mess is never a good basis to build something on it. The adage that the failure of preparation is the preparation of failure has probably hardly ever been more relevant than in the case of Brexit.

Another obvious fact is that hardly anyone in the UK had thought of the entire process and about the consequences of a victory of Brexit at the referendum. The current situation is now different in the sense that there have been two years of real discussions about what Brexit actually means. One can wonder whether voting in a referendum without knowledge of what the result may mean is not very conducive for a strong future. Yet, this referendum, just like most other referendums, has been organized without providing thorough understanding of the consequences to voters. Democracy maybe the best system in spite the fact that it is not perfect, a democracy will not be strong if it rests on ignorance and bias, but that is another story. Another aspect that deserves some serious thinking about referendums that mean a rupture is that majority should be a proper majority to enforce the result of the vote. There are many systems. Some choose the absolute majority as a valid number. For some decisions, a majority of two-thirds is required. What is the right number? Well, considering the many times people argue that those elected do not represent the people because of low voter turnout that makes them elected by a minority of the total number of eligible voters, while being elected at a majority of votes actually put in the ballot, it is not that much of a silly question. The very least should be that a drastic rupture with the status quo should not pass unless at least 50% plus one of the total eligible voters would be a fairer absolute majority. Brexit did not get the votes of 50% plus one of all eligible British voters. Only a minority of the people decided for it, and not based on solid knowledge of the matter, either. Considering the mess that resulted from this, would it be illegitimate or unreasonable to want to reconsider the result of the referendum?

The British Parliament is struggling with this, and does not seem to find a workable solution. The EU is not faring all that much better. Clearly, on both sides, many would really like more time, but the political game in the public eye also forces them to take more rigid stances. Yes, I guess theatre improvisation is not an easy art to perform.

What do I think will happen? It is difficult to say but I believe that both sides will try to buy some time to either find a workable agreement and/or to get the public accustomed to the idea that it may not be wise to proceed with Brexit and find an honorable way out of the mess, probably through opinion polls and possibly another referendum, which this time will happen with voters being much better aware of what Brexit means. After all, the number of searches on Internet about consequences of Brexit peaked after the referendum, which clearly showed that voters went to the polls ignorant and started to educate themselves only after the facts.

What do I think should happen? All of what I have written above. A good first step would be to acknowledge publicly all the mistakes made in the entire process, without trying to point fingers at anyone because, frankly, everyone has contributed in some way to this mess. The second thing would be to acknowledge that it is only a minority of the people who voted for Brexit and start a conversation of what an absolute majority parameter would be for decision with such consequences. And finally, unless a workable agreement can be found within reasonable timelines, just put Brexit on hold and start a national debate with no particular deadline. Instead, it would be more productive to have a thorough reflection, both in the UK and in the EU, about the role and the functioning of the union to meet all the future concerns of the European and British people, in order to build a strong region that will become the leader the world needs, because even though the EU has many shortcomings and flaws, the current and potential alternatives are worse.

Copyright 2019 – Christophe Pelletier – the Happy Future Group Consulting Ltd.

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Who’s afraid of Brexit?

November 21, 2016

Brexit is a hot item. I am asked regularly what I think about it and I have to admit it is rather difficult to answer with any kind of certainty today. I hear and read all sorts of points of views and their opposites. The financial markets sent their messages and legions of experts have given their opinions but I see two main forces in what they tell us. The first thing is a lot of subjectivity. Most predictions I read seem to be more the result of spite, particular agendas or wishful thinking. It sometimes sounds more like what the pundits would like to happen to the UK and to the EU than the result of a solid analysis. The fluctuations of the Pound Sterling are also more the result of a lack of clarity than of a long-term view, but that is how financial markets work. Uncertainty opens the door to all sorts of rumours and speculations. When the crystal glass is too blurry, everyone develops his/her own scenario, which of course adds to the confusion, the uncertainty and the nervousness.

The only way to dissipate uncertainty is for political and business leaders to come out and say clearly what they are going to do and how. They also must explain what will change and that includes the good, the bad and the ugly. Brexit is about change and change always brings fear, which is really the fear of loss, as gains are usually never perceived as threats. The missing bit in the Brexit issue is the lack of clarity and communication about what the political leaders will do. Even the date of initiating the process seems rather fluid, not to mention those who say that it will not happen after all. As long as clarity and determination seem to still be missing, confusion will prevail. I believe that the situation remains vague simply because the leaders do not have a clear idea themselves of what to do with that referendum outcome they did not expect and therefore never really thought about what the next step should be. Just imagine what the reactions would be if the UK had the Euro as a currency and were part of the Schengen area…

road-for-the-ukWill the UK face an economic crisis or a recession? Maybe but maybe not. That would not be the first time and eventually the UK has always recovered. I do not see why this would be any different. I remember when Black Wednesday took place in 1992. By then, I was in charge of the UK market for a Dutch poultry processing plant. The UK was the main destination of breast fillets, our most expensive product and overnight the company turn-over was headed to a major nosedive. The Brexit excitement of today feels nothing like the panic of then. Regardless of how stressful it was, the Black Wednesday situation delivered some good lessons in term of business strategy that I am sure would be beneficial in today’s situation.

The first lesson for us by then was that having many of our eggs in the same basket was quite risky. The exchange rate and the law of supply and demand showed us that less attractive national markets became more attractive and we developed breast fillets sales outside of the UK, while the UK was more competitive outside of its borders. Markets dynamics changed but life went on. One of the most important functions of a sales department is to generate alternatives all the time. No alternative means there is no choice but to accept what the other party offers. The second lesson may be the most important. We had a good marketing strategy. We served the most demanding segment in terms of quality and we offered top-notch service. This made us the last suppliers our customers would want to eliminate and it gave us a solid leverage to renegotiate deals and compensate the loss due to the exchange rate. They wanted our product because it was supporting their business and they would not want to throw that value away. The third lesson is a correlation of the second one. We had chosen a specialized and growing market. By being market-oriented we were able to stay in demand and weather short-term market volatility much better than many of our undifferentiated competitors, both from the UK and the EU.

Because I have seen the benefit of a market-oriented value marketing approach, I can only recommend it as a choice in regards with Brexit. Even in a changing environment, if you have what the market wants, the market will want you. Crises are useful. They help eliminate businesses that are not adapted and not adaptable. The key is to find the customers with a future and help them to be so by delivering them superior value.

Copyright 2016 – Christophe Pelletier – The Happy Future Group Consulting Ltd.