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THE BREXIT

AGENDA
THREE KEY QUESTIONS
FOR BUSINESSES IN
PREPARATION FOR ANY
BREXIT SCENARIO:

Opportunity or disaster? Britains vote to leave


the EU has split the opinions of British businesses
down the middle. For your business, does it open
doors to new customers? Or spell the end of
some of your safest contracts? Does it boost your
competitive position, press pause on progress, or
force evasive action? Until the negotiations are done
and dusted, the answers are almost unanimously
likely to be it depends. One thing is for sure: it will
be the companies that are best prepared to adapt
that will come out on top.

Wilson Perumal & Company THE BREXIT AGENDA

Britains June 23rd vote to leave the European Union will have no greater reverberations than within the business
community, not only within the UK and EU, but the world over. However, more than three-quarters of the UKs big
businesses dont have a plan for Brexit, and few of these have yet to even assign responsibility for developing one.
The Brexit decision has come as a shock to many business
leaders, who now find themselves seeking clarity against a
backdrop of huge uncertainty and speculation, but no real
answers. How can businesses possibly prepare for all scenarios?

It will be years before negotiations are complete. It is critical


that businesses dont sit back and wait for the fog to clear.
Companies that set about answering these questions have
the opportunity to steal a march on their competition by
understanding where they are vulnerable and where they can
hedge their bets. Businesses that are prepared will have the best
opportunity to mitigate eventual painful operational, commercial,
and legal ramifications, and gain a stable footing to capitalize on
emerging opportunities.

The first priority is to grasp the issues at stake. The diagram


below articulates the range of need-to-knows that CEOs,
COOs, CFOs, and CSOs need to be asking their managers
now. Knowing this information is essential to tackling the 3 big
questions that business face post Brexit:

These big questions may appear daunting, and in many complex,


international organisations, simply unanswerable. This document
introduces some affirmative no regret actions that successful
firms will take to stabilise their position in the most uncertain of
environments: Dynamic Scenario Planning, Portfolio Profitability
Assessment, and Operating Model Alignment.

1. How can we build resilience into both our strategy and


operations?
2. Which markets, products, services, channels or assets are
really driving our profits, and which could be impacted?
3. Is our operating model flexible or agile enough to react
to inevitable changes?

The Brexit Agenda: Putting your business on the front foot


You are likely to have put Brexit as the top priority for your next
board meeting, so whats on the agenda? What do you need to
know, or at least what are the pressing known-unknowns? How
can your business dodge a sucker-punch or avoid missing that
opportunity before its too late?

Knowing the answers to the questions we have laid out will allow
you to respond more quickly and effectively to the many scenarios
of Brexit, and in doing so, capture critical competitive advantage
along the way.

BUILDING BREXIT RESILIENCY


Strategic

KEY ISSUES

TRADE &
TARIFFS

Operational
COMPLIANCE

Impact of free trade


agreements & tariffs /
caps / barriers

WHAT YOU
NEED
TO KNOW

NO-REGRET
ACTIVITIES

Impact of current UK
/ EU Regulation and
certifications

Supply chain movement


between UK, EU and
other trading blocks

New opportunities
for optimizing
procurement and
supply chain

CURRENCY

MARKET
PERFORMANCE

Currency value
impact on supply
chain & procurement

Applicable UK &
EU legal business
requirements

Locations that
optimize access to
markets & resources

WORKFORCE

Currency &
economic drivers
of cost of capital

Currency impact
on value of
assets & real
estate

Opportunities to
influence new trade &
regulatory agreements

RESILIENCY

Workforce
composition and
cost of labor

Impact of UK /
EU interest rates

Portfolio opportunities
and risks of shifts in
demand

Issues,
vulnerabilities
and risks under
existing contracts

Flexibility of
operating model
and supply base

Dynamic Scenario Planning

Portfolio Profitability

Operating model agility

Evaluate different options, and


know when (and when not) to take
them off the table

Evaluate different options, and


know when (and when not) to take
them off the table

Evaluate different options, and


know when (and when not) to take
them off the table

THE BREXIT AGENDA Wilson Perumal & Company

Dynamic Scenario Planning


Set
Objective

How do you plan in an unpredictable environment like the current one? An


optimal approach is less concerned with predicting the future and more
concerned with establishing clear objectives, developing multiple options for
achieving those objectives, and constantly monitoring the environment to
identify early detection triggers for rapid transition between different scenario
plans. The goal is to create the best possible outcome for each
set of circumstances.

Address
Disruption

Understanding which products, services, suppliers, assets and customers drive


revenue and costs across its portfolio is a key decision making tool for any
business. However, very few firms have an accurate view of this. Hidden costs
are increasingly becoming the determinant of competitiveness for businesses
with more and more linkages, products, assets and geographies.
To learn more about the theory and methodologies for profit allocation,
please see: http://tinyurl.com/hdtlgmt

Dynamic
Scenario
Planning

ID
Disruption
Triggers

Identify
Disruption

To learn more about Dynamic Scenario Planning, please see:


http://tinyurl.com/zufrnjf

Portfolio Profitability Assessment

Explore All
Possible
Scenarios

Execute

Risk Assess
Scenarios

Develop
COA Plans

STANDARD COST VIEW

COMPLAEXITY-ADJUSTED VIEW

$/unit
140

Sales price

120

NVA cost

100

VA cost

NVA costs typically shift


toward lower vol. products

80
60
40
20
0
A B C D E F
Volume: 1500 1000 600 200 100 50

Profit:

8% 11% 7% 7% 6% 6%

A B C D E F
1500 1000 600 200 100 50
27% 19% 3% -27% -39% -54%
Profits shifts toward higher vol. products

Target Performance

The current-state
operating model and
existing staff, assets,
facilities, and resources

Your companys desired


results profitability,
growth, safety, efficiency,
quality, etc.

Business Strategy
Strategic decisions on
where to play and how
to win the value you
offer your customers

Internal Lenses

Current
Capabilities

Target
Performance
to Sustain
Ability

Operating models define the who does what where questions of companies
as well as where and how best to deploy assets and how to make use of
partners. They need to be fit for purpose and aligned with both strategy and
the business environment in which they play. When either changes, the
operating model often needs to be adjusted. In more extreme cases, it may
be more radical changes that require rethinking how the whole business
is structured. In either case, and those in between, there is a common
approach to do so.

Current Capabilities

to Change
Ability

Operating Model Review

Operational
Model
Design

Business
Strategy

Industry
Dynamic
External Lenses

Industry Dynamic
The nature of the industry
and competitive
landscape in which
your company operates

To learn more about the how to optimise your operating model, please see:
http://tinyurl.com/zsj9bs2
Ability to Change & Sustain
The organizational tools, culture, and discipline to get from the current to the desired model

Wilson Perumal & Company THE BREXIT AGENDA

About Wilson Perumal & Company


Wilson Perumal & Company is a premier management
consulting firm and the leading advisor on how to
compete in todays complex world. Our Point of View
is rooted in the fact that modern businesses, and
the markets in which they compete, have become

For more information, please contact:


Stephen Wilson
Managing Partner
swilson@wilsonperumal.com
USA: +1 972-716-3930

increasingly complex.
In the face of this complexity, companies need new

Isabel Fernandez

approaches, tools, and capabilities. WP&C is built on

UK Manager

this belief, and insight, to deliver practical, effective

ifernandez@wilsonperumal.com

assistance to companies facing todays challenges

UK: +44 (0)203 206 1496

We are published thought-leaders on issues such as


complexity management, growth, experimentation,
operating models and global expansion.

Tom Hamnett
UK Case Team Leader

For more information about the initiatives described

thamnett@wilsonperumal.com

and how we can help you in this uncertain period visit

UK: +44 (0) 7795 109851

www.wilsonperumal.com.

Wilson Perumal & Company, Inc.

Wilson Perumal & Company, Ltd.

One Galleria Tower


13355 Noel Road, Suite 1100
Dallas, TX 75240

Longcroft House Business Centre


2/8 Victoria Avenue
London, EC2M 4NS
United Kingdom

contact@WilsonPerumal.com
www.wilsonperumal.com