In episode two, Chris and Matt discuss the technology implications of Brexit, and the broader question of managing change in organisations. They also bang on a bit about how they struck timeliness gold with episode 1, even if they didn’t quite strike sound level gold…
Brexit and Technology
Whilst there are many areas impacted by the likely terms of Brexit, including HR, replacing skills etc there are two thorny issues that need thought – one is the reconfiguration of supply chain systems and the other is data sovereignty.
Data must be processed in an environment that meets the requirements of the data owner – being part of the EU it’s fine for a UK company to process HR records of EU citizens. When brexit happens we will need to to decide whether to bring our own legislation in line with the GDPR regulation that comes into force in 2018. (GDPR is a big subject all by itself!) The information commissioner has indicated that we will mirror these arrangements but political forces may intervene. The UK only grudgingly accepted some of the (‘anti-business’) provisions of GDPR during the negotiations of the last few years.
If we did implement a lesser version of GDPR it is possible that we would not have an ‘adequate protection’ regime and in that case it would be more problematic to process EU citizens data in the UK. Not impossible, but an administrative headache at best. Given that it is likely that many of the EU citizens working in the UK will have leave to remain after Brexit companies may well have to do some legal footwork to look after their personal data.
The supply chain system issue is potentially at least as big. The UK is part of one of the biggest trading blocs in the world – the EU has trade agreements with dozens of territories and probably twice as many in negotiation. When (if) we say goodbye to participation in this trade bloc we will have to come up with new agreements – this isn’t going to happen between now and brexit, in fact that’s not allowed under EU law. It seems that any transitory agreements to remain will require commensurate agreements to allow free movement and politically that will be difficult as we near the next general election.
So it is likely, but not certain, that there will be new tariffs, certifications, and just a whole lot of new paperwork needed in order to send goods from the UK to other countries, and vice versa. In the past 20 years these import/export processes have been subject to the finest minds of the software consultancies, systemising as much as possible in order to meet the needs of today’s Just In Time methods and be able to measure cost, lead times etc. Sadly that is now something of a tangled ball of wool that we must unravel in order to incorporate all the new certifications, documents, tariffs etc
Y2k was a similar problem – a known issue coded into systems because it was the cheapest way to do things. Even in 1995 I was working on 2 digit dates with clear knowledge of the impending problem, partly because 5 years seems like a long time to someone in their 20s but mostly because amending and adding to a codebase doesn’t allow you to blithely change conventions – to start using 4 digit dates would have required a lot of system changes outside the specific part I was working on and when you give an FD the option of doing the work this year or leaving it til next year you often get the same answer. In this case we know there is a likely problem but we don’t know what the final picture we have to paint is, or when we’re going to have to paint it… I’ve already heard from people talking about offering Brexit Maturity Assessments for their ERP systems. It might take 3 years or more to leave the EU and we’re going to need every minute of it.
Change – one-off event or perpetual necessity
If we accept that the only business certainty these days is that things are going to change, why does change management appear as a secondary support activity in organisations?
- Change management as a discipline too often is regarded as a “communications” task, something that runs alongside the business of making stuff – systems, processes, structures – happen.
- Does this abdicate the responsibility for the “hard” soft stuff? Major cause of failure of big IT projects still is the inability to drive behavioural change in the mid- to long-term (and metrics for success for IT projects still veer towards the measurable rather than the valuable)
- Moreover, structuring an organisation around the things that it does (sales, operations, R&D, technology etc) hardwires organisations into thinking that there is a perfect end state, and that this change will be the last change.
- Lean startup thinking, for all of its failings, embeds the idea of ever changing end-states into organisational thinking (the “pivot”).
- Combine that with multidisciplinary teams and you have the potential for structures based around delivering value to customers/clients/citizens, rather than delivering stuff.
Focusing on value rather than stuff would give the opportunity to avoid “railroad syndrome” – losing sight of what it is that your customers get from you. Also might stand a chance for organisations to be able to do more disruptive innovation rather than just sustaining innovation.
Some organisations have managed to adapt seemingly organically, including Nokia who went from a manufacturer of rubber products to a successful mobile phone company, to an unsuccessful mobile phone company and are now moving on to their next phase having divested that part. So how do companies get to this level? Maybe by creating smaller, focused teams, using methodologies like DevOps, that can work across functions and have the authority to make things happen.