Page Executive were joined by KPMG’s UK team to give the Espresso Guide to Brexit at the quintessentially British location of Tower Bridge. This iconic landmark, steeped in British history, provided the perfect setting for a discussion around Britain’s exit from the EU.
Drinks flowed, dusk fell, and Simon Nolan from Page Executive set the scene for the evening. The KPMG team were introduced to the front to bring a series of concentrated shots for the Brexit weary.
Karen Briggs, Head of Brexit at KPMG, began by explaining that there are no simple answers to this heated subject and that hard or soft, it will be a ‘Savile Row’ Brexit, British and bespoke. She compared the situation to the game ‘whack-a-mole’, as soon as one issue is dealt with, another pops up! Fundamentally, Brexit brings so many opportunities; the reform in the consumer and FMCG sector which is already seeing a significant drive for automation and focus on reengineering the business model is simply being accelerated.
Eleanor Winton, Head of Future Institute at KPMG, warned that (despite what her title suggests) it is actually very dangerous for companies to predict the future and advised against it.Predictions are frequently influenced by personal bias and the ‘arrogance of expertise’. Rather than prediction, look back at trends – the gift of hindsight, and monitor them closely. The FMCG and Consumer sectors are in a strong position to do this, they work closely with consumers and can track trends as they happen, identify which things are changing and how fast, and this is a powerful asset.
When asking millennials about one of the things that would appear in the future – they answered “extreme loneliness” as we become isolated, digital labour increases and the future is uncertain. However, uncertainty creates opportunities. Eleanor suggested we are shifting from an ownership based economy to an asset based economy and now is the time for experimentation. She used the example that many people own a drill, however on average a drill only gets 18 minutes use in its lifetime. Therefore a rental model might work and allow more of the younger generation, with limited access to cash, to still buy in. A further example of experimentation came from Lego – a customer in his Mum’s basement came up with the idea of Lego Architect which became a big selling Lego product. Now is the time for this risk and experimentation.
In this uncertain time when a lot of businesses want to press pause, Eleanor encouraged everyone to press Re-Set.
Punam Birly, Head of Immigration at KPMG, was the next to address the room. She spoke around the need to ask the question to your EU workers “How are you feeling?” as people are central to Brexit and employers have a duty to monitor the behaviours in the workplace around the stress and tension of Brexit. Punam explained how some companies are helping their EU workers to register or paying for their process towards gaining a British passport. Some companies have always had EU workers and don’t understand the immigration process, so it is important to know the process and communicate with your employees, keeping them informed.
Paul Martin, Head of Retail, gave guests a quality concentrated shot on his take of Brexit indicating that we are currently in the ‘golden quarter’ as currency is hedged until next year. He explained many may argue that the pound may have been over valued and some correction was expected. A fall of 5% against the Euro was seen to compensate for any tariff barriers against UK exporters imposed by Europe after Brexit. The fall in Sterling gives British exporters a current price advantage against continental rivals and it also helps tourism as the UK becomes a less expensive destination for overseas visitors. Prices in most sectors will be passed to consumers and Paul believes the Euro is also set to slide. However, Paul explained that there is opportunity around internationalisation; by 2020 the UK market looks set to export £60billion from ecommerce sales which may create need for an office outside the UK to manage the growth.
The presentations drew to a close with a lively Q&A session with the KPMG team and the guests. Some questions that were raised included:
What is your biggest fear about Brexit?
Karen: That we don’t collaborate and take advantage of the opportunity to change things.
Is recession likely?
Paul: The Economist said technically there won’t be a recession. However, we will feel the pinch. Realistically we are potentially very likely to hit recession although it’s unlikely to be as hard as 2008 / 2009. It’s impossible to predict accurately, as Eleanor warned.
Why is the opportunity for investment in infrastructure, such as Heathrow or Education, here today and not a constant opportunity irrespective of Brexit? Is it the failure of the UK government to not have invested in this over the last few decades?
Paul: Brexit has retrospectively showcased the failure but hopefully going forward the government are using Brexit as a reason to change. They are using the opportunity to rectify this.
Eleanor: We can all use this chance to assess things we haven’t before. We should have done it previously, but grab this chance to press re-set on your business.
Paul: Using a risk mitigation strategy won’t work. That cannot be the answer. Only time will tell if we all take the opportunity.
Which skills does a Chief Executive need to demonstrate over the next 12-18 months, that perhaps they haven’t needed before, in order to be successful?
Eleanor: An interesting academic came into KPMG a few years ago and said the key leadership skill for the future is tolerance of ambiguity. Turns out they were right! The elements of that are creativity, spirituality and mindfulness.
Punam: Listening skills. Hear their thoughts. Many of them will have valuable perspectives.
Paul: The era of command and control is over. It’s now all about inclusivity.
The evening closed as Tower Bridge was illuminated over The Thames, and Espresso Martinis were served all round.
To discuss the challenges Brexit presents around hiring for your company contact [email protected]
KPMG has developed two tools to help you:
KPMG EU Exit Impact Assessment tool
This tool provides you with a heat map analysis indicating where best to focus resources aligned to key risks and opportunities. Contact: [email protected]
KPMG customs/indirect tax impact assessment tool
This tool helps you assess your possible financial exposure to different tariff models for imported commodities and goods. Contact: Bob Jones, Director Trade and Customs [email protected]