Getting a grip 27 Jun 2016
You really don’t need any more pontificating about Brexit. But sometimes a topic is so overwhelmingly part of the national conversation, it’s hard not to pitch in. So: what does the referendum vote mean for finance execs and growth businesses?
Let’s start with the chatter.
AccountancyAge did a poll and 45% of accountants say it’ll be a disaster for the profession. They’re wrong, of course. It’s more likely be a gold rush as companies over the next four years scramble to adapt to changing regulations and laws, work out how to manage taxes, exports and possible tariffs and all the rest. (Related: AccyAge got 171 votes in its Twitter poll. This is not the voice of the profession it once was, perhaps…)
Software firm Xero has commissioned a client, digital law firm Lexoo, to opine that legal issues might be the toughest questions for smaller businesses – notably employment, intellectual property and contracts. They're a bit less wrong. For at least two years nothing is going to change on those fronts, and while all these things might be part of the negotiations and need companies to weigh up decisions, it’s unlikely they’ll matter more to small business than, say, sterlings’s fall or nervous consumers. (One lawyer said it was going to be like being a doctor during the Black Death: great for business for a bit, then a sudden drop-off in work...)
How about a sector look? Wired tackles that paragon of UK growth business, the games industry. Some are fearful that recruitment of talent is about to get harder; others fear a brain-drain; still others reaffirmed their commitment to the UK. In other words, none of them really know, and it turns out there's no such thing as a sector consensus.
I could go on, but will spare you further eye-strain. Because you’re sick of it already, aren’t you? You might be like me, and have spent more time on Facebook in the past four days as the previous four years. Maybe you’ve been glued to the radio or TV, or hitting refresh on the news sites waiting for Boris (or anyone, really) to explain what the hell is going on.
And it’s not helping. So what will? It’s simple.
Do your job.
Quick story: I only met two people who told me they would vote Leave, and one was a portfolio NED and CFO at PE-backed businesses. I asked him why he was a Brexiteer. “Well, it’s time for a change, isn’t it?” he replied. I was horrified, and told him so. “You’re a finance director – your job is to ask your smart and creative colleagues, ‘why?’ It’s to help them frame their decisions in a business context, to put numbers on them, to explain consequences and articulate opportunities. To help them be specific, not general. Your job is not to trust vague feelings!”
There was a bit more back and forth, but after failing to come up with one EU regulation or limitation that hurt the businesses he was involved with – or to explain what might happen after Leave – he recanted. I think I did my bit to win a Remain vote (albeit fruitlessly). But all I'd done was to force him to apply his professional filter - at which point, it seemed obvious what to do. And that's what we all need to do now.
We are in a Leave process (whether we do or not is a whole different question). And you finance execs have a powerful and important role in ensuring the emotion that my CFO friend expressed does not define your businesses' responses. So what is that role?
- It is not to opine on the future of your profession.
- It is not to renegotiate employment contracts in a panic before the summer is out (nor freeze hiring arbitrarily).
- It is not to second-guess an industry’s appetite for moving jurisdictions.
It is to calmly frame your plans and prospects, encouraging smart and unemotional decision-making that leaves your growing business capable of weathering both short-term storms and possible long-term change.
(Guess what: that was also the job last Wednesday.)
Growth businesses, in particular, ought to (and I can’t believe I’m typing this hackneyed phrase) “keep calm and carry on”. To be a growth business is, by definition, to be adaptable, to welcome risk, to see opportunity when there is change. Finance execs in these businesses will, of course, have to watch currencies and consumer sentiment and borrowing levels and all the rest.
But above all, they will keep their fellow directors and their investors rational, sane and rooted in the numbers. We've been taken down the road to a dramatic change by emotion and "truthiness" in a campaign. Now we're here, we need logic and calculation to make the best of it. You can do it.