Brexit - governance tips for directors
Now that the dust is starting to settle from the Brexit vote to leave the EU, organisations should recognise the potential ‘discontinuity’ on their portfolio of change project and programmes. Below we list some tips and hints for those responsible for good governance of project management – the board directors or equivalents. Whilst the status quo will continue until the UK negotiates an exit agreement with Brussels, directors may wish to consider the potential impacts on their business and investment portfolio.
1. Review the strategic objectives of the business and their impact on the current strategic portfolio.
Check alignment to any updated strategy and re-set the priorities for existing projects - categorise strategically those that should continue as is, those that need to be subject to a detailed review, those that should be stopped, and identify any that are missing. Close projects that are no longer aligned rapidly and sensitively. Use your network of other business contacts to help forecast the impact on your business.
2. Review your business portfolio of change and projects.
In addition to item 1 above, request each project sponsor to review their current projects. Identify, in their view, any change of risk or opportunity / benefit profile to individual initiatives and their business case and strategic fit. Risks related to EU exit might include tariff changes for importers, new employment laws, or supply chain problems. Particularly where projects are being delivered with partners ask the sponsors to assess how the Brexit decision may affect their partners, their perception of risk and their attitude to continuing. Feed into the strategic review above. For longer term projects that may be susceptible to Brexit impact, consider restructuring into stages or phases that allow change in direction at key points (a more agile approach).
3. Engage stakeholders so that they are aware of any changes due to your perception of Brexit.
Review stakeholder maps to see if others now come in, or existing diminish in importance. Particularly projects that are closed or are subject to a major change in scope / shape impact. Use the opportunity to reinforce the importance of the key strategic programmes and continue to seek support. Equally ensure that the company ‘antennae’ is tuned to new sources of information around Brexit.
4. Review funding of projects.
In a potential downturn the combined effect of lower profitability and stretched working capital can quickly result in a business running out of cash. We have already seen instances of funding being withdrawn for projects. For example if projects are dependent on full or partial funding from EU sources or another organisation that will be effected by Brexit. In addition if funding includes foreign exchange elements, then consider hedging to limit exposure to negative fluctuations of exchange rate. Also consider tax implications on projects. Ratify funding strategies for individual initiatives as well as the overall portfolio.
5. Review resourcing, resourcing plans and assumptions regarding supply of people.
Particularly if your projects already have a high reliance on EU staff and your recruitment plans rely on EU or overseas specialists being recruited. In an uncertain economic climate, it's vital to make your staff feel secure, especially as the UK exits Europe and workers may worry about losing EU protections.
6. Review your own leadership skills & support network.
Is the leadership team experienced in dealing with this potential discontinuity? Do individual sponsors and stage gate reviewers recognise the potential for change and disruption – are you confident that they can respond in a new way? Would it be appropriate to seek external support to gain another perspective and ensure your project management competencies and that you are well prepared for change and disruption. Finding a coach or mentor who can guide you or share their experience can be invaluable too.
7. Review the current governance arrangements.
Are they suitable for an uncertain economic climate and potential change and disruption? Could a more Agile approach to project delivery de-risk some projects – along with adapted governance arrangements (more regular reviews of value delivered as opposed to just progress of outputs)? Should new risk categories associated with Brexit be identified and escalated rapidly to the Board?
8. Review independent assurance plans.
Is more independent scrutiny of projects required to ensure that the new circumstances are being properly built into business cases, delivery plans and benefits reviews / stage-gates.
9. Increase the facility for learning cross project.
Ensure that more regular sharing of views and lessons is enabled.
10. Communicate changes to the portfolio clearly, rapidly and sensitively.
Ensure any changes are enacted quickly and in a coordinated way throughout the supply chain. Reinforce good governance practice.