Turn on the TV or radio, or indeed read any of the broadsheets or social media feeds, and the key messages appear exclusively negative around Brexit, increasing populism, more extreme politics, a sluggish UK economy and robots replacing humans, are the oft repeated themes.
Various industry reports have highlighted potential winners as well as losers with the depressing experience of the high street decline, contrasting with the whopping 88% growth projected for the fintech market over the next three years. To boot, Brexit has not technically started yet.
At the latest in our series of CEO lunches, our guests, from a wide range of sectors, we asked:
“As business leaders, what are you doing to send positive messages to your staff and stakeholders to keep them motivated and inspired? And of the potential threats, what opportunities are there for business?”
Juliette Stacey, the Group CEO of Mabey Group and a NED for Fullers PLC kicked off the discussion, highlighting that the UK construction and leisure/retail sectors are facing extremely challenging market conditions. In her view, it is imperative as leaders to have an ongoing, honest, authentic conversation that “engages with our people, helps them get on board with what is required in order for business to be successful.” Commenting on the second question posed by the Chair, she said that in the construction sector, real opportunity has emerged. Technological advances have enabled a very traditional offering to become far more efficient, delivering effective solutions for customers now and remaining relevant into the future.”
Our role as business leaders is spotting those changes in order to use the opportunities to challenge our people and the wider business about what is possible and what can be done differently in order to survive.
Paul Cardoen, CEO of FBN Bank, made a number of additional points. “As a small Bank in the city, established for over 30 years, we need to move from being a bank of the past to one of the future, meaning changing processes, automation, digital, data and culture – which creates a lot of exciting energy. Driving cultural change from being hierarchical to empowering has been key, encouraging flexible working, as well as showing people that a career in banking is not just defined only as being a Banker or front line. There is real job mobility and career opportunity in areas such as data and operational risk leadership.” These positive development steps have helped Paul attract and keep his talent and created an exciting buzz in the work place.
The theme of flexible working struck a chord with Helen Webster, CEO Aberdeen Life. She outlined that a really positive change is the widening recognition that agile and flexible working is not just an issue for women with young children; “It is about recognising that all staff may want more flexibility and at different stages in life, whether to support parents with health issues or even hobbies that people want to spend more time on. Furthermore, it’s not only about recognising that people at different stages in their life have different reasons for working flexibly, but when managed effectively, it does not have to impact on output. This approach would be helpful in terms of creating a fairer, more meritocratic and diverse work force, particularly when moving into senior roles.”
Sustainability is an opportunity in marine and offshore.
Next we heard from Kirsi Tikka, EVP ABS, a marine and offshore classification service, technology and technical advisory business, who highlighted the economic threats and opportunities facing the sector. Despite the significant downturn experienced, over 200 organisations globally have committed to an environment sustainability charter. This is working towards the CSR industry commitments and also creates better financial stability for the industry, through a reduction in fuel consumption and reduced costs.
With the discussion well underway, we moved to the care sector. Mike Parish, Group CEO of Care UK commented “there are winners and losers in every sector and differentiation is often about smart choices and operational excellence.”
In any business, the key to success is brilliant people.
Sally Abbott, MD of Weetabix, acknowledged that despite the overall political climate being unusual, including Brexit, it is worth remembering that many companies today have survived world wars. Her view is that “businesses have endured, and therefore, Brexit or any other key challenges currently facing business today, won’t kill all companies off. Therefore, the challenge for business leaders is about defining a real business purpose, beating the competition, talking openly to your teams and employing brilliant people. However painful Brexit is going to be, as we go through it, the UK and our companies have been through worse. The strong companies will do the right things.”
What’s the Government’s strategic response to post Brexit?
A CEO from a data service provider and a Non-Exec Board member for an organisation that produces economic statistics, observed they have witnessed a dramatic increase in the government’s consumption and use of data. The Government is trying to understand the feeling of the country and economy, and the levers that will need to be pulled in a post Brexit world. Government using this data is positive but the worrying aspect, in our guest’s view, is this dramatic increase in demand is so late in the day. It implies that Government does not have a post Brexit strategy and begs the question, what indeed is our Government’s strategic response to Brexit? Brexit is not the problem but the lack of leadership in politics is. Worse, the leadership void is filled with populist sound bites such as renationalisation of the energy sector or whatever idea politicians are grabbing onto to create headlines. For the business the CEO runs, if the extreme step of the renationalisation of the energy sector is taken, demand for their services will only increase. In spite of the lack of Brexit strategy, our guest felt reasonably secure that nothing dramatic will actually happen. This is because there are so many rules hard baked into the energy sector in terms of policies and regulations encased in both law and documentation, so much of how it operates today will remain. More likely, there will be a gradual separation rather than a hard Brexit. The UK’s gas supply will still come from the Nordics and Russia and Brexit is not going to change this anytime soon. It is therefore up to business leaders to fill the void in the absence of political initiative and leadership.
Honest open straightforward communication with staff when facing difficulty is the right way.
Simon Pilcher, CEO, Fixed Income at M&G Investments outlined how they are responding to significant challenges ranging from the way clients want to access financial solutions to merging and demerging his organisation. In Simon’s experience, “honest, open, straightforward communication with staff when facing difficulty is the right way. Going silent is the disastrous thing to do. If we focus on our customers’ needs and on things we can control, rather than things we cannot, it keeps people focused and not worrying about the invisible. Linked to that, in the context of Brexit, our mantra is to prepare for the worst but hope for the best. We had plans pre-referendum that we have been enacting and have transferred the largest amount of money out of the UK that’s ever been transferred by the industry, in the form of moving funds from the UK to Luxembourg. With no other option, it had to be done. There was a slight frustration we had to do this, but nevertheless, we had to get on and do it. Remember who our customers are, serve those customers, provide real solutions that meet our customer needs – rather than shoving products down their throats – then we are more likely to have a successful outcome. This is the way we are speaking to our people.”
Andrea Davis, MD of Investcorp, which invests in middle sized businesses in a dozen industries across Europe, commented that whilst they have seen a softening in the market in the last quarter, they are also seeing real opportunities by focusing on customers, digital and products. “It’s also about listening to the young people in our organisations, benefiting from their perspective and creating new opportunities.”
Even in a difficult market, if you are offering something that a consumer really wants, it gets a response and can bring revenue in.
The final word in our discussion came from our CEO, Karen Wilson, who expanded on how two clients have uncovered real opportunity in their sectors. Within the leisure sector, one of HB’s NED contacts who sits on the Board of a retail organisation explained they are opening Italian pasta and pizza restaurants in London with more to open next year. Despite the woes of the sector, the first ones have been very successful, because they have responded to the consumer’s desire for fresh produce being cooked from scratch on the premises and finished in front of them so they can see fresh ingredients being used. “Even in a difficult market, if you are offering something that a consumer really wants, it gets a response and will bring revenue in.”
Within the telecoms sector, a recent meeting with the CEO of a Europe Cluster, in her former leadership role as SVP Emerging Markets at Vodafone, revealed that across India and South East Asia, the gap between the number of male and female mobile phone users was 90 million i.e. they had 90 million fewer female users. They set themselves a target to close this gap by 2020 and 18 months into this programme, they have closed the first third. 30 million new female users have been acquired by understanding what these women really looked for from their mobile service provider and insights told them what was lacking.
How different the car industry might look, if manufacturers thirty to forty years ago had created a convenient space for women’s handbags!