On June 24 2016 the business world had a rude awakening. The UK had just voted to leave the EU and things would never be the same. More than six months later things remain unclear, with no certainty as to whether the Brexit process will be hard or soft, and what the outcome for immigration and trade (to name but two business-critical areas) will be.
In November 2016 things became even more confused when Donald Trump was elected as US president. The only certainty now, it seems, is uncertainty.
These unexpected (to many commentators at least) results raise some interesting leadership conundrums. Most businesses had openly aligned themselves with the Remain camp pre-EU referendum: a CBI poll revealed 80% of CEOs wanted to remain in the EU and publicly Remain businesses included Goldman Sachs, Airbus and BP, all of which encouraged their workforces to vote Remain. In the US Matt Maloney, CEO of online food ordering service Grubhub, had to backtrack when he openly criticised employees who voted for Trump.
“With Brexit it’s not business as usual,” believes PwC partner Tom Gosling. “These are definitely unique times because of the impact on business coupled with the fact that the referendum campaign polarised opinion within the workforce.”
This means HR has a critical role to play in helping leaders navigate this uncertainty, he adds. “HR departments can help leaders get into the right mindset: a positive mindset that is focused on the opportunities Brexit can bring, not just its downsides,” he explains. “It’s important to look out for signs of stress in the senior team. If leaders voted against Brexit they might feel disengaged now. Concerns about the level of change in the business may be coupled with wider worries about the country and their children’s future.”
A recent survey by Willis Towers Watson found 63% of companies saw a lack of clarity on the UK’s position as a barrier to responding effectively to the challenges posed by Brexit, but this uncertainty will do little to reassure the 44% of workers, according to the CIPD, who feel “pessimistic” about their future because of the Brexit vote.
Jean Martin, talent solutions architect at CEB, adds that in a CEB poll carried out on EU referendum day 60% of companies said they felt ‘very’ or ‘relatively’ unprepared for an out vote, with only 7% ‘highly prepared’. And she stresses that this change only adds to the amount of change employees in most organisations have already endured, whether through acquisition, new product development or restructuring.
If, as Martin points out, change has become the norm, is there a risk of overreacting to the current political landscape and the changes it could bring? Mandy Ferries, director of HR at the UK’s largest property management firm FirstPort, believes there could be. “There are always periods of uncertainty and good leadership will encompass this ambiguity,” she says. “When there is external uncertainty, such as with Brexit, we should focus on what we know and ask how this will help deliver what is best for our customers. At FirstPort we deal with 3,000 properties – from retirement properties to serviced buildings – so have a very diverse customer base and need to continue to grow. It is this element that determines our business plan, not political debate.”
Ferries adds that while Brexit and the Trump administration may affect employment legislation “this is nothing new”. “The last 10 to 15 years have seen huge changes in the leadership landscape – be they changes in flexible working, parental leave or bonus allocation,” she points out.
However, in a September 2016 KPMG survey of 100 chief executives 76% said they were considering leaving the UK because of the Brexit vote and its accompanying uncertainty. And at a recent Financial Times | IE Business School Corporate Learning Alliance event former global L&D director at Google Stephan Thoma warned that the talent implications of Brexit are already happening, and that HR has a crucial role to play in reminding senior executives to focus on “critical talent”. But where to start?
Gosling advises leaders to reinforce teamwork and inclusiveness and not let their own attitude to Brexit dominate, as the workforce will hold both pro- and anti-Brexit sentiment. HR professionals, he adds, should be providing space for leaders to reflect on the type of leadership they need to show and how to do so in an inclusive way.
He also believes HR can help by settling concerns that may be distracting people, perhaps by holding Brexit surgeries so staff can openly ask questions about what it would mean for them. He uses the example of one woman asking what would happen if Article 50 was triggered while she returned to Spain for a break, and whether she would be allowed back into the UK.
For Phil Jones, managing director at electronics company Brother UK, communicating openly is critical to leading through this uncertain time.
He conducts quarterly updates for all employees, communicating what is certain and using visual aids like cartoons to help get the message across. One set of images likens the business to a warship in calm and then in stormy seas: whatever the outlook staff are still in a warship and they still know where they’re going – and that includes being passionate about the customer experience despite the journey being rougher.
Jones sees Brexit as “an external condition” rather than “an internal change” – it may have an impact but the firm should have an idea of that impact already, gained from pressure testing and scenario planning. “There is no place for knee-jerk reactions,” he says. “People need a pragmatic assessment of the situation, an honest appraisal of the consequences. You should show you foster an open culture where people are trusted with information.”
Julian Sykes, director of organisational effectiveness at The Co-operative Group, adds that in times of stress “the natural reaction is overload and anxiety”, which can make leaders “short-termist and prone to control rather than empowerment” (see box to the right for more).
While agile was a buzzword of 2016 (and we hazard a guess that it won’t be going anywhere in 2017), Jones stresses the need for “alacrity rather than agility”. “My job is to create a culture where people are in a happy state at work but with an added realisation that they need to be in a state of readiness for change,” he adds.
Incremental change needs to be an accepted part of the job, he explains, rather than a leader announcing change from on high followed by a long change management programme. Resilience is key, and all Brother UK staff recently completed a half-day resilience training session. The whole L&D strategy needs to become sensitive to uncertainty, he adds, but this must be led by the CEO or MD taking responsibility for overall culture, supported by HR.
“As a business leader you can’t just outsource such change, especially if the firm is to pressure test the challenges of external uncertainty,” he says. “This is a time when HR needs to step up to cultural engineering with the leader and not just administer a process – or a huge gap will emerge.” But, he adds, in times of great uncertainty “smart businesses will say ‘we need HR in the room’”.