Brexit: A business design gap
29 January 2019
As we move closer to the Brexit date without a confirmed UK position, statements from organisations such as Airbus are increasingly highlighting the business impacts of uncertainty. One of the many lessons the last two years has taught us, is that a deceptively simple strategic goal such as ‘leave the EU’ is, in reality, difficult to execute without a clear, agreed business design – a blueprint that connects strategy to execution.
There are other examples where a well-chosen business design is needed to achieve a strategic goal. A few months ago, the Health Secretary described why the NHS is shifting away from its multi-billion pound top-down IT systems to a policy where local units select systems that are compatible with central standards. The intriguing point here is that the pros and cons of available system approaches for a comprehensive view of NHS data were known well before the IT investment, yet the NHS still made ‘huge and costly mistakes’.
With Brexit, there has been a similar temptation to choose a strategy that is politically easy to explain: We will centralise (or decentralise), we will outsource (or insource), we will leave (or remain). In a ‘greenfield’ situation, with no legacy constraints, or small organisation, these decisions may be relatively easy to implement, but in a large organisation or the UK as a whole, with decades of legacy processes and systems, the complexity can be bewildering.
What is the best way to transform an organisation or the UK operating model effectively? At Henley, our research and education has identified characteristics of an effective business design, in particular how the value sought by stakeholders can be reconcilably delivered through an efficient operating model enabled by the right capabilities. This approach connects the why, what, who, where, and how, to architect how a strategy can be operationalised.
To date, the UK does not have an agreed and effective design following the referendum outcome. The current proposal offers a compromise strategy, enabled by a staged business design (legal withdrawal and a future intent) with a radically different backup design (no deal) that contestably sidesteps legacy challenges. It remains a challenge to reach an implementable agreement in the current timescale.
A large design gap moving from current to future states increases the potential benefits of transformation but it also makes it much more complex. Since no Brexit option has met the key criteria, some business leaders are making design decisions assuming their worst-case scenario. If the government wants to reassure business leaders that they can make strategic industry decisions, it needs a timely consensus on a UK business design.