Top five lessons leaders and organizations can learn from Brexit

As Theresa May begins her first full week as the new British Prime Minister, it’s a good time to reconsider the Brexit vote.

The June referendum, in which the United Kingdom voted 52 per cent in favour of leaving the European Union, left the country divided. The majority of people in London, Northern Ireland and Scotland all voted in favour of remaining in the E.U. The results not only left the country in a state of uncertainty, they also shocked people and markets around the world.

There are compelling leadership lessons organizations can glean from Brexit. Here are my top five:

1) Plan ahead and understand the systemic risk of a new undertaking

Former U.K. prime minster David Cameron failed to do this before initiating the June 23 referendum on E.U. membership. It appeared to be called simply to solve the immediate and self-serving issue of uniting the Conservative party, which he led up until July 11. Taking unnecessary risk with a very high risk-reward ratio was reckless.

Secondly, he did so without a strategy or contingency plan and without research and in-depth analysis regarding potential systemic impacts in the event of a “leave” vote.

Chaos and confusion results when the complexity of an issue is underestimated and time or resources aren’t invested in studying a situation to identify and mitigate risks. Planning and analysis is too often under utilized in today’s fast-paced business and political environment, and yet the lack of it can create years of rework and unraveling of relationships and a complex web of interdependencies.

Success, if it’s attained, is contingent on research, analysis and strategy. For example, Hydro One’s successful initial public offering last November required a lot of planning and consideration of different options and stakeholders.

Lesson: Invest the time and resources to plan and execute initiatives

2) Ensure you have a sound decision-making mechanism and clarity

Good decisions require having all the necessary information available and ensuring the right people are consulted and the best people make the decision.

Brexit, one of the most complex and important decisions the U.K. has made in decades, was made by a plebiscite. Leaving this decision solely in the hands of the public, who could not possibly absorb all the information and details involved (even if it had been offered), calls into question the degree of thoroughness such a critical and complex decision received.

Fuzziness is not good when it comes to a vision. The evident lack of clarity of Brexit’s implications created misunderstandings and disappointments, which could impede it as the process moves forward.

Most organizational conflict is the result of different expectations and a lack of clarity regarding vision and principles. Clearly defining these often resolves the conflict and resumes positive traction and collaboration. However, doing that on a massive national and international scale will be a herculean task.

Lesson: Ascertain the importance of the decision, assess what information is required, who needs to be involved and determine proper checks and balances

3) Be open to reassessing direction and options

A key ingredient in good leadership is being aware of the shifting environment and exploring other options when it appears things aren’t unfolding as they should. Unless leaders can do that, they can march in the wrong direction to the ruin of their organizations.

In the case of Brexit, the U.K. government, now under Prime Minister May’s leadership, seems grimly committed to a strict and ridged adherence of the referendum outcome, come what may.

Leadership requires awareness, pragmatism and flexibility, as well as sensitivity to nuances and consideration of new relevant information. Being able to listen to and unite different perspectives is also critical.

Corporations fail or thrive based on their ability to assess past decisions and change direction quickly when new information becomes available.

For example, U.S. discount retailer Target Corp. changed course when it became evident that their entry into the Canadian market wasn’t successful. After nearly two years of disappointing results the company lost little time closing their 133 stores in Canada.

Lesson: Admit mistakes, be open to new information and adapt strategy and direction accordingly

4) Focus on your customers and relationships

Putting a high value on clients and relationships is one of the key ingredients to sound business decisions.

Through Brexit, the UK may have unwittingly offended EU customers, partners and their own international talent pool.

Once a relationship has been undermined it’s very difficult to regain trust. It could lead to a tough road ahead for rebuilding customer and partner relationships.

Furthermore, by downplaying the value of that relationship, they may be less likely to attract new customers (who will judge how customers have been treated in the past, rather than how they may be treated in the future).

This is something Volkswagen AG, which last month reached a U.S. $15.3 billion settlement with regulators over the emissions scandal, has learned the hard way.

Lesson: A good reputation with your customers is a treasure worth protecting

5) Lead with courage and intention

Leading requires depth of character, concern for people and outcomes and courage to speak up and do the right thing.

Few politicians involved in the Brexit issue have appeared to be interested in reflection, or sober second thought, despite the troubles that may loom ahead. Some have been judged to be promoting their own political ambitions. This is perhaps the most critical leadership flaw and sadly may be the nature of politics. You can learn, or teach the discipline of good planning and decision-making, but you can’t fix temperament, character, or intention.

Lesson: Don’t select leaders for their appeal, promises, or charisma, but rather focus on people with good intentions, humility, adaptability, honesty and intelligence

--

Mary Pearson CMC, is a Toronto-based management consultant, specializing in organizational development, team effectiveness and leadership. http://www.organizationwisdom.comhttp://www.linkedin.com/in/marypearson

This article was first published in the Financial Post, on July 19th 2016.