The British exit from the European Union, luckily, occurred after the EU and Great Britain managed to agree on a deal, in particular, on a trade deal. The threat of no-deal Brexit haunted both residents of the UK and Europeans living and having business in the UK for 3,5 years. This paper aims to explain to what extent the “Cornwall Flowers” company should change its ways of doing business after official Brexit, and discuss a plan that will help to reinforce change.
Global Perspective
Longstanding and close attention to the problem, both in business and political circles, hurt the reputation of the UK among its investors. In contrast, the Brexit aftermath affected the work of large, medium, and small businesses. Particularly, the changes hit agrarian, automotive, travel, and tourism industries, financial traders, online companies, and import-export commerce. Of course, there is a year of “transition period” during which governments will come to a more substantive agreement regarding taxes, customs checks, and other sensitive aspects of trade between the UK and the EU. Besides, during this time, the UK will have to establish relations with its outer trading partners – the United States, Japan, China, Singapore, Australia, and New Zealand.
During the adaptation period, which will last until December 31, 2020, governments have promised not to introduce changes in the travel and tourism industry. At the same time, Nissan pledged to exit the EU market and increase production in the UK if the EU introduces export tariffs. Still, the automotive sector must have been stressed considerably with the UK’s total ban for selling non-electric and semi-electric cars which will come into force in 2035.
Some companies have already announced that they are ending their business in the UK. Among them is the brand of clothing for children, Mothercare, which closes all of its 79 stores, causing the loss of 2800 jobs. Well-known restaurateur Jamie Oliver also closed 23 out of 25 of his British restaurants, leaving 1,000 people unemployed. Tour operator Thomas Cook was more fortunate as Hays Travel bought it, retaining jobs for 2,500 employees. The same goes for British Steel, whose purchase negotiations with the Chinese company Jingye are underway. Airbus threatened to stop working with the UK in case of a no-deal Brexit, which could have left 14,000 people unemployed. As for the financial industry, German digital bank N26 decided to withdraw its funds from the UK and will close more than 200,000 customer accounts.
The above statistics are pretty impressive; unfortunately, there is no such data regarding small and medium-sized businesses (SMEs), but they probably got the most. According to scientists, “Brexit could result in weaker growth, lower levels of innovation, reduced capital investment and lower access to external finance, especially for innovative and export-oriented SMEs” (Brown, Linares-Zegarra, and Wilson, 2018, p. 1). Scholars also emphasize that SMEs are the most significant contributors to long-term productivity growth and economic development. Notably, Deputy Prime Minister Michael Gove has recently declared that all imports checks will begin from January 1, 2021. Thus, the industries have one year left to implement all the necessary changes, trying not to harm the companies and their employees.
National and Local Perspective
“Cornwall Flowers” is a company that sells flowers online and owns a flower farm. It imports chrysanthemums, roses, tulips, and lilies from Holland and Belgium. Business owner Sarah fears that customs checks will negatively affect the quality of the goods and complicate the logistics. After Brexit, her trucks will have to travel from Belgium to London through customs points on the Northern Ireland border, and not through the Channel Tunnel, or using the ferry as before. It will lead to an additional 24 hours of waiting for the order for customers. Therefore, Sarah considers switching to buy flowers in Spain, even though the Spanish prices are higher than the Dutch. Also, she will have to give up the idea of purchasing tulips, since they are not grown on Spanish plantations.
Perhaps “Cornwall Flowers” could benefit from a change strategy, but at the moment, they seem to have found the most suitable solution that helps them to stay in the highly competitive flower business. Some scientists believe this approach is more justified than seeking state support like “Brexit-related deregulation, tax cuts, and “Economic Shock” therapy” (Culkin and Simmons, 2019, p. 338). Scholars found out that “economic growth and innovation are better sustained by addressing failures, than introducing the unknowns and risks associated with a substantial Economic Shock” (Culkin and Simmons, 2019, p. 338). Thus, the existing approach should be left unchanged as the primary way to deal with everyday challenges. However, it may also be supplemented with a sensible plan.
Change Scenarios
According to the course materials, “Cornwell Flowers” implemented the change at a shallow level, making the inevitable decision to choose another supplier. The scope of change may include surface, shallow, penetrating, deep, and transformational change. An example of the surface change is restructuring, and shallow change may consist of reallocation of resources and increase or disband of other functions. Penetrating change is usually related to the leadership change – new CEO or senior management team, whereas deep change implies mission and vision change and setting new goals and targets. Finally, transformational change seeks the transformation of the whole paradigm or how a company does its business.
Given the above, “Cornwall Flowers” will benefit from restructuring the company. The company will also need to expand the logistics department, hiring more drivers to make purchases for the future. Besides, it makes sense to expand the sales function by hiring a marketer and creating a procurement plan based on market demands. Since the company’s resource is limited – less than ten people are working in it – Sarah can assume the responsibilities of a marketer. She can also hire a deputy who will take on the part of her duties.
As for deep and transformational changes, the enterprise has opened up unexpected prospects. Sarah, the CEO, decided to expand the paradigm and ways of doing business by creating a farm-based photo studio. For this, she established cooperation with a guest photographer and equipped several pavilions near the greenhouses. She also changed the company name to “Cornwall Flowers and Photo Farm.” Hence, the company is now engaged not only in selling flowers online but also is a platform for photoshoots. The creation of a photo pavilion also made it possible to fill up the company’s Facebook page with content and start developing an updated website. To summarize it, “Cornwall Flowers and Photo Farm,” just like every online business, is operating in ‘white-water rapids,’ which means they perceive change as a natural state and change management as a continual process.
Nonetheless, if the existing decisions will suddenly stop working, the company should also have a backup plan. According to scientists (Khan and Hashim, 2014, p. 4), the “Kotters Eight-Step Plan” is highly relevant to manage change. It consists of eight steps – firstly, one should establish a sense of urgency why a change is needed; then – form the power to lead the change and create new vision and strategies to direct the change. Next, one will need to establish valuable communication, empower others to act by removing barriers, and elaborate short-term rewards to proceed with the new vision. Finally, one should consolidate the success with continuous improvement and necessary adjustments in new programs.
Managing Communication
For more productive changes, the HR department must be involved as well. In “Cornwall Flowers,” the role of the HR leader is performed by Sarah, CEO of the company. Therefore, it is her responsibility to establish proper communication with employees, ensure their motivation for success, and develop their resilience to change. The online flower business has to adapt to the current economic climate constantly. Hence, it is necessary to consider several critical tools for the HR leader and employee interaction.
Firstly, it makes sense to use social media as a communication tool, as it will provide an opportunity for the employees to leave feedback. HR professionals recommend giving preference to video messages rather than texts because of non-verbal signals like the leader’s voice intonation, posture, and gestures (Managing and communicating change, 2016). Also, watching a video takes less time than reading a text. Moreover, it is more understandable for employees whose native language is other than English. Thus, video messages allow supporting the implementation of the diversification principle.
Secondly, whenever possible, an HR leader should communicate with employees in person – at morning coffee or in a round-table format. Especially since personal communication can be quickly established in small businesses like “Cornwall Flowers and Photo Farm.” Experts believe that HR leader should put employees’ ability to speak out in the first place and pay attention to their concerns, thoughts, ideas, and suggestions (Managing and communicating change, 2016). In this regard, the leader should also strive to shorten the distance between him and his employees.
Finally, the HR leader should help employees in gaining certainty and a sense of purpose. Explaining the organization’s goals is the best way to do it, as it allows employees to regain control over their future. Wherein, the leader should honestly admit issues that raise his uncertainty but focus on what can be done. This approach may also contribute to increased productivity since the uncertainty, and lack of purpose usually cause productivity fluctuations. It happens because the human brain is equipped to respond to fears, stresses and difficulties in the first place. Thus, the HR leader’s support helps to overcome productivity fluctuations and provides an integrated approach by solving employees’ psychological problems, which developed as a result of organizational change.
Thus, it was explained, to which extent the “Cornwall Flowers” company should change its ways of doing business, and a plan that will help to reinforce change was discussed. “Cornwall Flowers” decided to face the existing challenges without developing a change strategy. However, its decisions on managing change can be structured better by applying the ‘depth’ approach from the course materials, as well as the Kotters Eight-Step Plan. Also, it was found out that the CEO has to motivate employees to work successfully and help them in developing a sense of purpose and confidence in the future.
Reference List
Brown, R., Linares-Zegarra, J.M. and Wilson, J.O. (2018) ‘What happens if the rules change? The impact of Brexit on the future strategic intentions of UK SMEs’, The Impact of Brexit on the Future Strategic Intentions of UK SMEs, pp. 1–34.
Culkin, N. and Simmons, R. (2019) ‘Shock therapy and entrepreneurial flare #Brexit’, International Journal of Entrepreneurial Behavior & Research, 25(2), pp. 338–352.
Khan, M.A. and Hashim, M. (2014) ‘Organizational change: a case study of General Motors’, in ASEE 2014 Zone I Conference, April, pp. 3–5.
Managing and communicating change (2016) Web.