Irish SMEs warned not to ‘sleepwalk’ into post-Brexit world

PJ Timmins was chief executive of retailer Clerys for a decade. In all, he spent 22 years with the retailer before leaving in 2012.

A year later, Timmins became the master licence holder for peer advisory service Alternative Board (TAB) franchise in Ireland.

TAB brings the owner/managers of non-competing SMEs together to act as unpaid advisers to each other. “It’s about harnessing collective wisdom matched with soft accountability and it’s very effective,” PJ Timmins says of the group first established in the United States 25 years ago.

Having spent the last four years travelling in the State to meet SMEs, Timmins believes he has a good sense of how the sector is thinking about Brexit. Based on his experience, companies are either as prepared as they can be or have completely ignored Brexit and are hoping it will simply go away.

“There are too many companies that look set to do nothing and simply sleepwalk into the post-Brexit world,” Timmins says.

“Of course, there has been a period of fear in the aftermath of the vote and Irish businesses are certainly entering an extremely uncertain cycle. But they need to wake up now and start defining their strategy.”

Timmins breaks the Irish SME sector into four post-Brexit types.

Group one are like boy scouts – well prepared. “They have planned it and war gamed it and are ready to press the button,” Timmins says.

Group two are in the “surprised” camp and are still reacting.

Group three fall into the Hamlet camp. They’re the procrastinators who have decided to wait and see.

‘Very exposed’

Group four are on another planet. Brexit has simply passed them by.

These latter two groups are, says Timmins, are the most at risk.

“These companies are very exposed and need to start getting their heads around it fast. They need to start planning strategically, even at a small level, but I find that many have never been properly trained how to plan so they need to get help urgently.”

Asked what steps companies should take immediately, Timmins suggests they “hedge currency exposure, make sure contracts are bulletproof and look at potential new sources of supply and customers outside the UK”.

“Just because a company has always bought from or sold to Britain isn’t a good enough reason for continuing to do so.”

Timmins also suggests tapping into a potentially positive spin-off from Brexit – the availability of labour. “There’s a lot of talent there in software, technology and financial services, for example, and Ireland is now looking attractive to this mobile workforce. The UK may not have been seen as a source of potential employees before, but it is now,” he says.

Timmins believes a key element in the post-Brexit corporate survival kit is being competitive.

“It’s feasible to transform a business within a one to two-year period and it’s not just about cutting costs,” he says. “It’s about building a better brand, getting better productivity across the board and developing a strong, positive business culture within an organisation. If you distil it down, the focus should be on mitigating risk and maximising opportunities.”

Part of the problem for SMEs is that they often rely on small management teams who are so focused on running the business day to day that their thinking becomes insular and they don’t have time to develop a strategic vision for the company.

‘Different perspective’

If this is the case, Timmins says, “it may be necessary to reframe the scenario to get a different perspective and also to look at what’s emotional and what’s logical about their response and to take the emotional element out of the equation. This is where getting together with a peer group and brainstorming or listening to other people’s experience can be of huge help.

“Things are going to change and nobody knows for sure how, but by teasing out some of the possibilities companies are at least aware if not yet prepared.”

As head of TAB in Ireland, Timmins naturally thinks peer advisory boards are the way to go. However, he backs his view with research from TAB internationally.

“In 2015, SMEs with advisory boards increased their business by 15 per cent compared with 7.8 per cent for those without,” he says. “The process attracts people with ambition and this rubs off on others in a trusted and confidential environment.”

Each TAB grouping has up to 10 members from the same locality and meets regularly. The meetings are facilitated by a member of the TAB Ireland team who is usually a business veteran in their own right. Companies pay between €400 and €500 a month to participate.

"The Alternative Board costs a fraction of the price of having non-executive directors and all of those involved undergo psychometric testing to ensure we get the right blend of personalities and a positive culture within the group," Timmins says.

The Alternative Board is publishing an Irish version of its publication “Timeless Principles of Exceptional Businesses”, a list of 25 pithy maxims for business owners that it says could help Irish SMEs prosper in the post-Brexit landscape.

TAB tips for making your business more competitive:

– Differentiate your offering with simple, unusual touch points.

– Get the right people. If someone is not right for your company, you are better off parting ways.

– Hire people who are better than you to give balance to the team.

– Be the driver of your business, not a passenger.

– A strong brand equals strong profits.

– Know, respect and leverage your competition.

– Manage your business using key performance indicators.

– Technology should be a core competency.