Martin
Sorrell of WPP suggested the Remain campaign was out of touch with the concerns
and views of the majority of the electorate. The focus on the rational economic
argument, neglecting the emotionally-driven issues of sovereignty and immigration,
was an error.
The full
consequences of Remains’ failure are hard to predict but they will likely
include slower growth rates in the UK and beyond. There will be considerable
uncertainty for some time, which will slow decision-making and deter economic
activity and investment. Delaying triggering Article 50 feels like there was
little expectation of Brexit succeeding, little plan for afterwards,
politicians resigning and in a time when businesses need swift action to reduce
uncertainty.
All this in
a business world that has become self burdened with caution, risk-aversion and
short-termism. We have already seen examples of investment being put off or
cancelled altogether, the faltering Tata Steel sale process, or the delayed EDF
Hinckley Nuclear investment are cases in point. Besides, this could have
serious implications for our National ability to satisfy future UK Energy
demand (if the lights start going out, will the Brexiteers be ok with that?), and
future job loses.
However, we
have no choice but to look ahead to a post-Brexit future and will that be so
different politically. After all of this upheaval, will we revert back to
something which operates in a similar way to pre referendum? If the UK needs to
make concessions on free movement of people and immigration in order to retain
trade relationships – are we not back to Square one?
Paradoxically,
WPP and other firms may become more European than ever. While the UK may have
voted to leave Europe, companies have not. Four large top 10 markets are in
Western Continental Europe – Germany, France, Italy and Spain. Here it’s likely
to spur recruitment of people employed in European markets faster than in the
UK.
The
strategic reaction to Brexit may be to pursue a greater focus on the
fast-growth markets (“emerging” economies); a greater focus on data and
digital; and (another irony) a greater focus on getting people to work together
more effectively across national and functional boundaries for the benefit of
clients.
Working
together for its clients (the electorate) is something the UK’s politicians are
finding hard to do. After a vote for division and isolation, and a descent into
political in-fighting, this message of unity is one that Westminster would be
well-advised to listen to.
By Duncan Carter, Director at Macallam Executive Search and Interim Management
