Companies here are likely to face a much tougher competitive landscape post-Brexit.
But irrespective of the sector they operate in, there is a lot that organisations across Northern Ireland can do right now to prepare themselves for life after 29th March 2019. Here's five things to consider:
1.Prioritise productivity
Productivity (or how effectively value is produced) has never been more important. Northern Ireland’s productivity lags 15% behind the UK average which in turn is 16% lower the European average. Positively, companies have much more control over productivity (which resides within their four walls) than they do over business rates, staff, rent, insurance and energy costs. Recently the Office of National Statistics (ONS) and the Economic Statistics Centre of Excellence (ESCoE) published the findings of a survey of 25,000 UK production and service organisations which showed a significant correlation between management practices and labour productivity. In particular the study found that practices related to continuous improvement and employee management (- activities around promotion, performance review, training and managing underperformance -) were most correlated with productivity.
2. Assess your digital effectiveness
Brexit is unfolding against a backdrop of the Fourth Industrial Revolution which is being driven by a range of new digital technologies. These have the potential to dramatically improve the efficiency of organisations. Companies can benefit from planning their digitalisation journey. Backed by Innovate UK, Digital Catapult, Automotive Council UK and the High Speed Sustainable Manufacturing Institute, London (HSSMI) the Digital Readiness Level (DRL) tool helps companies benchmark their readiness to make the most of digital technologies, prioritise the steps along their digitalisation journey and access the support they need. The Centre for Competitiveness is lead partner for Ireland with the DRL, the UK not-for-profit body hosting this system. We will be running a series of workshops this Autumn in partnership offering companies online roapmapping to track their own digital implementation and provide independent advice on selecting the right technologies.
3. Invest in training and skills development
UK productivity is now only 1.5% higher than it was 10 years ago. This ‘lost’ productivity decade coincided with both a significant decline in the portion of employees undergoing training and the duration of those training activities. If companies are going to get the best out of their people, then training and skills development should move up the corporate agenda. Courses and programmes should be selected not on their buzz-worthiness but on their effectiveness. Companies can benefit from both newer digitally focused programmes and "evergreen" courses that address perennially important subjects like decision making and problem-solving. Talent continues to be a key competitive differentiator and talent shortages and the need for new skill sets remain a critical issue. Attracting and retaining top talent and exploring new approaches to accessing talent will become more important than ever.
4.Benchmark your business performance
Benchmarking may not get the attention it used to get but it is no less effective now than when it garnered the press coverage that approaches like design thinking are now enjoying. It is also cost-effective and straightforward and allows companies to clearly see how much improvement they could make, a point that the Bank of England's Chief Economist Andy Haldane was at pains to make last year. Likewise, quality programmes - which in effect are business excellence programmes - enable quality accredited companies to outperform their competitors by a significant margin (as large-scale European and US studies show).
5. Foster a sustainable culture of innovation
Innovation properly understood and applied can help companies grow faster, be more agile and unlock new forms of value. A recent CBI survey found that 90% of respondents felt they had a board that supported innovation yet only 40.2% of Northern Ireland organisations actively innovate compared to a UK average of 50%. Innovation is particularly important when it comes to productivity; The National Endowment for Science, Technology and the Arts (NESTA) found that innovation drove 67% of labour productivity growth in the 2000s. A methodical and pragmatic approach to innovation which fits long term into busy schedules helps to nurture a sustainable culture of innovation. Shifting activities where possible online and making them mobile-friendly can be very beneficial. This also offers the framework to build an in-house innovation community which is key to both the cross-pollination of ideas and the successful execution of the strongest ones. Ensuring that this community has a thorough understanding of how innovation works is also vital as is creating an innovation strategy with tangible objectives. Based on over 15 years’ work in the innovation space the Centre for Competitiveness is launching this Autumn the first-to-market internationally accredited on-line end-to-end innovation programme (powered by Innovate XL). This will enable companies to achieve the first ever internationally recognised standard for innovation and create their own successful in-company innovation eco system with tangible outcomes.
As the economist Paul Krugman famously wrote "productivity isn’t everything but in the long run it is almost everything. A country’s ability to improve its standard of living overtime depends almost entirely on its ability to raise its output per worker." By viewing Brexit through the prism of productivity and with a keen sense of competitiveness honed through an innovative culture and digital effectiveness, businesses throughout Northern Ireland can meet the challenges and avail of the new opportunities that Brexit brings.
Bob Barbour is a Director and CEO of the Centre for Competitiveness.
The Centre for Competitiveness is a private sector, not-for-profit, self-financing membership led business improvement organisation. With over twenty-five years of industry experience, the Centre for Competitiveness supports organisations become more competitive and deliver sustainable growth.
The Centre for Competitiveness, in partnership with Forde Campbell and powered by Bank of Ireland UK is hosting a number of late-afternoon in-company events in September and October throughout Northern Ireland on “Building Business Performance Post-Brexit.” These events are aimed at CEOs, MDs and decision makers in Northern Ireland Industry. Click here to register for the event. Please note that the number of attendees will be limited to 20 per event. Early registration is advised to avoid disappointment.
