Thoughts from Adrian Simpson, Co-Founder of Wavelength
Planning for leadership development in a time of uncertainty is undeniably difficult but fundamentally necessary. And it’s not new news that the UK economy has rarely faced such uncertain times as it does today. As we prepare for our Wavelength USA 2020 programme visiting, amongst others, Amazon and Netflix, Adrian reflects what leaders in the age of Brexit-uncertainty can learn from those who survived the implosion of the dot com bubble.
Good news, it seems, may at last be round the corner. A final decision on Brexit could now only be an election away.
Whether the territory we encounter when we get there will be sunlit uplands or sloughs of despond, however, continues to be debated.
A question of perspective
Depending on your perspective Brexit (or the lack if it) will bring on a period of unfettered growth or an unprecedented phase of economic disaster.
Certainly, there is much evidence suggesting at least short term economic jitters will follow our exit from the EU. Although the Bank of England recently revised its most dire predictions, some analysts are still predicting at least a ‘£70bn hit to the UK by 2029′ following our departure.
Will Brexit bring long term benefits?
Others are focused on the potential for more dramatic, long term benefits from the move.
Iain Duncan Smith, for example, claims that Brexit will provoke a wave of disruptive commercial energy akin to that bought about by the English reformation. Although surely it’s to be hoped it will cause less bloodshed than Henry VIII’s break with Rome.
Echoing this theme of macro change, Dame Helena Morrissey, head of personal investing at Legal and General, has heralded Brexit as the end of the “top-down, command-and-control, one-size-fits-all approach to business and politics” imposed by the EU.
Tech companies remain optimistic
In some sectors even short term optimism remains high. Several reports from the tech sector have suggested agile and innovative British businesses are still attracting foreign investment at a record rate. A report from Coutts bank shows UK entrepreneurs are feeling largely confident and excited about their future even in international markets – 67% of their respondents say they have either entered, or explored entering new markets in the past 12 months.
Change and dislocation will follow – but what will our leaders make of it?
One thing is for sure, though, Brexit will inevitably bring change and dislocation for most businesses as they adjust to the reality of new markets, trading conditions and regulatory regimes.
And there will inevitably be winners and losers.
Leaders will make the difference
But, it’s not like we haven’t weathered storms before. Leaders have had to deal with the seismic shifts bought about by digital disruption, the dotcom bubble bursting and the financial crisis. And navigating change remains a fundamental part of the leadership job description.
But as many leaders are complaining – it’s the uncertainty that is causing the problem. How can we plan when we don’t even know what the rules of the game are going to be?
So, what should leaders do? There has been an understandable feeling of paralysis in the face of Brexit – a wait and see approach – that is proving damaging to growth and confidence within many organisations.
But it could be argued that the winners in the past have been the ones with the foresight to invest and look forward even when everyone else kept their hands in their pockets and their eyes on the ground.
Lessons from the front line
Think of those who survived the implosion of the dot com bubble. What did they have in common? Strong leaders with a vision that was resilient, yet flexible enough to deal with unexpected twists in the stories of disruption they were participating in.
And the most successful of those leaders, ensured they were defining the direction of travel for themselves and their sector, rather than merely reacting to events.
As Jeff Bezos famously put it:
“What we need to do is always lean into the future; when the world changes around you and when it changes against you – what used to be a tail wind is now a head wind – you have to lean into that and figure out what to do because complaining isn’t a strategy.”
Amazon was famously able to weather the end of the dot com boom, through a combination of intelligent cash flow management and a relentless focus on customer needs.
Jeff Bezos never lost sight of his mission to serve the customer and kept expanding Amazon’s offering even while others were shrinking or regrouping in the face of potential crisis.
As the dotcom bubble burst Amazon were armed with the richest store of customer data ever accumulated, and a ‘fail fast’, agile philosophy. This meant they were able to quickly build and deploy an endless stream of new features which helped them more seamlessly align with consumer needs, while becoming ever more efficient and profitable.
Netflix and kill
The story of Netflix is relevant here too. A company which could easily have toppled like Blockbuster before them, as streaming technology suddenly and rapidly took hold within the entertainment industry, were flexible enough to change their business model to harness a new and potentially disruptive market influence.
The agile mindset of the organisation meant that they could continually recalibrate and reinvent their offering, often in quite radical ways. Thus, they moved from DVD rental to subscription streaming, and then transformed themselves from a distribution to a creative channel. All this ensured they could survive and thrive.
Again and again these winning companies exploited technology and market conditions that, might otherwise have spelt their end. Instead they used them to expand more rapidly, cross borders, dominate new markets and reinvent their sectors in ever more frictionless ways. They were leaders that were not afraid to disrupt themselves.
And here may be the lesson for companies and leaders facing the challenge of the uncertainty of Brexit. Can you really allow yourself to stagnate at a time when new, disruptive technologies like AI, Blockchain and VR are presenting unprecedented commercial and organisational opportunities?
Be agile, be prepared
As McKinsey says, companies truly embracing the Agile mindset are always able to ‘recognise the abundance of opportunities and resources available to them’.
The most successful businesses and leaders have historically been those who have continually looked outwards, proactively exploring new solutions and new ways of working in an ever-changing world.
In this time of upheaval, companies need to grasp the nettle more than ever. Leaders need to invest time in looking at what others are doing, learning from other companies in other sectors, if they are to realise their own potential in an uncertain future.
We cannot, after all, innovate in a vacuum.
Behind both the flag waving and the doom laden prognostications about Brexit, there is likely to be real opportunity here for those leaders who are ready to act.
Let’s make sure we’re prepared.