Planning and preparing for the future are key responsibilities for business leaders, and the referendum has thrown these actions into sharp relief.
There is a balance to be struck between managing the day-to-day activity and short-term planning against the longer-term, and an often unknown and speculative future. The most successful businesses are those that are able to hold these two often opposing positions.
To manage such complexity, companies use strategies and plans to enable them to communicate their intentions, express concerns and risks associated with a chosen direction. In doing so, they map out the resources needed now and anticipate what is needed in the future. Investments are a fundamental part of that strategy, whether internally resourced and financed or through external resources.
The impact on investment
Investment through innovation is about long-term gains and companies such as Airbus have been very vocal about the importance of the European Union (EU) membership to sustaining this investment this in the UK.
Sir Martin Sorrell has spoken extensively about the likely impact of a vote to leave on investment from the USA into the EU and UK businesses: "They [American businesses] value access to the EU's single market. One in ten would consider relocating were the UK to exit. A UK outside the EU would have a negative or strongly negative impact on future investments or business prospects in the UK."
One of the very important indicators of readiness for change is the extent to which leaders communicate with employees, customers, suppliers and the wider stakeholder community. Our research showed about two-thirds of businesses were doing so with employees, but much less so with suppliers and customers.
It’s not just about informing employees about ideas and plans at a company level, it’s about listening to their views and concerns as individuals. Whatever the outcome of the vote, businesses need to take their people with them and focus on their key external relationships.
The upcoming EU referendum has thrown these contrasting responsibilities into focus. Business owners and leaders are grappling with a challenging decision, which is likely to have the biggest impact on their company of any vote for decades to come.
What about the facts?
The leave and remain debate has been like a game of hide and seek for facts, balanced opinions and evidence about what happens after the vote, in the short and long term. A highly politically-charged debate dominated by personalities, selective use of data, and an atmosphere of menace and fear mean that vital sources of information will only be revealed from their hiding places long after the referendum.
Meanwhile, business leaders are making their decision to vote as citizens and on behalf of their company. Many have made their own enquiries and shared details with employees, so that they can make an informed choice.
Renishaw, a leading specialist engineering company, has done so. They export 95% of their products and services worldwide, 21% of that in the EU. The company revealed in a recent Business West survey that it had shared information with their 2,700 employees, recognising the personal decision each will take.
“What we have concluded is that for Renishaw a British exit from the EU would mean higher costs for our company and that we would also be subject to additional regulation in our business dealings, both with the EU and the rest of the world,” the company said in a statement.
This resonates with the findings from our research. When business leaders were asked about the likelihood of change 85% replied that they thought there would be if the UK voted to leave the EU and 50% irrespective of the outcome.
Of those interviewed, one in five businesses have followed through with more strategic activities in planning for change, evaluating the resources and potential changes to budgets depending on the outcome of the vote.
But over a half have not yet thought about what they need to do. Perhaps they are not planning to do anything until after the referendum or – and this is probably most likely – have simply not been able to find a reliable, unbiased source of information that they can tap into.
Once we decide, the rest of the world decides, not just the EU. How long term are companies planning? Hopefully beyond their current financial year.