Brexit has affected more businesses than anyone could have imagined. Although Brexit is yet to happen, and the UK still remains a part of the EU, it seems that the lack of movement on Brexit (and uncertainty) is just as damaging as the drastic changes that could be put into place once the deal goes through.
The uncertainty and the unknown is something businesses have always struggled against. How can you predict your profits, your turnover, etc – if you don’t even know how your business will function in 6-8 months. Brexit will change the way a lot of businesses do things, but (sadly and annoyingly) these businesses aren’t being given a chance to make back-up plans and put into place alternative methods, because as a country we aren’t being given a full picture of what Brexit even looks like for the majority.
So it would seem, certainly, that Resilience is the word of 2019 amongst the oil and gas sector. It’s been hard to stay positive, stay focused and to consider growing the business when it’s felt for many like a daily battle of challenges and stresses. With unstable ground, and unknown political and economical changes, it’s hard to focus on the things that can keep your bottom line healthy and profitable.
How Brexit affects Profit
So how as leaders do we work to continue to grow our businesses when everything around us seems so problematic?
There are two main ways to grow a business, one is to attract more sales from existing clients or new clients or to generate workload through M&A activity.
The other easier route we have is to become more effective, more productive, as a means of lowering that cost base – many of us have done little this year to tackle this one besides headcount reduction. In order to do things differently; we need to understand how we can do more with less, not a new concept but how can we really increase the bottom line with less staff and less workload?
So here are our Top 5 resolutions for CEO’s and business leaders in oil and gas in 2019.
1. Be Engaged and have an engaged Leadership Team:
How many of your team have delivered what you need in 2019? How many are you keeping close due to personal relationships.
You must have an engaged leadership team if you are going to succeed in 2019. In a recent study conducted by “Red Letter Days” (2015) it was discovered that around 69% of senior/functional managers were engaged.
Especially in the ‘Brexit generation’ we have many larger things pulling and pushing at how a business functions and works. These things need constant checking, constant surveying and constant discussion. You need a manager and management team that won’t be caught unaware when changes need to be made.
What’s very worrying is that in the same results less than half (47%) of CEO’s were actually engaged. Who engages the CEO? When they have the bank, the shareholders and everyone else to keep happy who removes the frustrations for them? Typically many CEOs are tied in so they may remain with the business for the long term pay out but it doesn’t mean that they are engaged.
In this case it’s key but not ideal that their direct reports do the engaging. As business leaders we need to engage ourselves better to lead in bad times and not just good ones.
2. Engage your staff:
If you take one of these away – take this one. Only 36% of staff in the UK are engaged, so fully productive. So nearly 70% of your office or offshore/onshore work site isn’t really driven to deliver the results you need – do you know which ones?
So perhaps performance management isn’t such a waste of time after all with that link to the bottom line. You can increase your profits by increasing your productivity.
There are so many ways to increase how engaged your workforce feel and act. A major one, and one that works for many businesses, is offering incentives. In a time when things are stressful or uncertain, offering positive and uplifting incentives can engage and encourage your workforce to deliver their best performance at all times.
If you are one of the companies that only has a third people of its team engaged and you are delivering to your customers you could still have synergies available.
3. Get the right organisational structure and roles in place.
If you are going to remove those daily frustrations, the repetitive moans and groans, you are going to have to consider reshaping your company.
Your operating model e.g. the way you work’ changes all the time so you should be looking at this every 18 months or so. Ensuring your people are accountable comes from having clear roles and responsibilities in place.
This is not the most exciting thing you will do in 2019 but it will make the business leaner and work better, which will aid profits.
It’s worth consulting a specialist about this, if you’re worried about Brexit removing people from your workforce, or if you’re worried about an eventual Brexit deal cutting profits to a large degree. A specialist may be able to help you assess which areas of your ‘work structure’ are most vulnerable to Brexit, and help you put new processes in place to address this.
4. Embed Values:
Many find it hard to find a link between values and profit. Values drive behaviours, behaviours drive culture.
We discussed staff feeling engaged, but it’s also massively important to make sure your staff are happy too. If staff are happy they will deliver for customers; and customers will come back for more – this is very important in a market where most clients are trying to do the work themselves by removing the third party service provider.
If you have current staff who are worried about Brexit, and worried about their position in the company or workforce, now is the time to address it. Speak to your legal team and see how you can these employees and how you can help ensure their job remains safe. Once these staff members know their position is safe, and their job is secure, they’ll be happier and work better.
A health warning though; profits are a positive outcome of having strong values, you cannot embed values solely to make profit – this will be identifiable and will just devalue the values and disengage the team.
5. Have a strategy –
What will your game changers be in 2019? Without stacking your strategy with nice to haves and internal navel gazing. What could make a huge difference to the bottom line this year?
Mainly, you’ll be looking at Brexit and what deal goes through. This has now been pushed back to October / November 2019, so we’ll have to wait and see what that deal looks like and how it changes the UK economy.
Unfortunately because of the state of UK politics right now, we can’t determine a concrete date for leaving the EU, nor can it even be guaranteed. For many people (whether they wanted to leave the EU or not) they’d rather be given a firm outlook for the future so they at least know how to prepare for it.
However, if the past few months in 2019 have been anything to go by, it doesn’t look like we’ll get this, so the most you can do is strategise for a variety of outcomes. Look at the different possible scenarios comes November / December, and this way, you won’t be left without a plan of action.