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Blog - Published 29th June 2016

Is Brexit inertia impacting on productivity?

Menzies Brexit Poll - the UK EU Referrendum

As the Brexit chatter continues, business leaders across the country will be wondering how quickly things will get back to normal?

Peter Noyce - Menzies AccountantMost pundits believe the Brexit decision is bad news for business, in the short-to-medium term at least. The on-going uncertainty created by the decision is expected to discourage business investment and it could even put off overseas businesses from investing in the UK. But amid all the speculation, one thing’s certain, things won’t be changing overnight.

There is a real danger that in the wake of last week’s decision, fast-growing businesses could see their productivity grind to a halt as managers, employees and clients stop to dissect the chatter and share their predictions for what might happen next. For these businesses, such distractions could undermine business performance and make it more difficult to deliver their strategic plan.

The importance of strategy throughout Brexit

If business leaders are going to be successful at navigating their way through the shifting market conditions, they must stay focused on clear strategic goals and reassure workers at all levels that, regardless of the outcome of last week’s referendum, there is a plan in place and things are still on track. It is business as usual and services must continue to be delivered.

Most businesses have a five-year plan, which includes short, medium and long term strategies and they will have stress tested this plan based on the Brexit scenario in the run up to last Thursday. The time for discussion and SWOT analysis is over and the time for clear-headed pragmatism and strong leadership has arrived.

Riding out the Brexit waves

Advising SMEs in the business services sector, I am aware that some are better prepared than others. Some are only now stopping to consider how the Brexit decision is likely to impact on the shape of their organisations in the months and years to come. Whilst keeping a strategic eye on the future is important, however, these businesses must not lose sight of the need to motivate people, maintain quality and get the day job done.

The political shocks that came in the hours and days following the Brexit decision – with David Cameron’s resignation, talk of a Scottish referendum on independence and calls for Jeremy Corbyn to step down – have had an unsettling effect on businesses and financial markets. But instead of slipping into a period of post-referendum inertia, business leaders must demonstrate that they are ready and willing to take the helm immediately.

Those businesses that successfully navigated their way through the recent economic downturn know that staying flexible to opportunities and shifts in market conditions, while keeping a close eye on cash, is vital. These are the businesses that will emerge from the situation stronger and more profitable in the future. For the brave and the bold, now is the time to act, not to succumb to Brexit inertia.

Peter’s comments are also featured in City AM in a feature titled ‘Seven ways to make sure your business gets through Brexit’.

Comments provided by Peter Noyce Partner and Business services specialist at Menzies LLP.

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Peter Noyce - FCA

Partner

Peter Noyce is a Menzies Partner in the Woking office specialising in legal firms, corporate tax advisory services and financial solutions.