Imagine you’re ravenous and someone brings you plates of your two favourite dishes. You like them both equally and they are the same distance away on the table. Which do you choose – or is there a very real risk you’ll starve because you just can’t make up your mind?
This may seem like a bizarre scenario. But there’s a business parallel that I’ll explore in a moment. As for the dilemma itself, it’s one that philosophers have been chewing over since the 14th century. The quandary was dubbed Buridan’s ass which – let me assure you – has more to do with donkeys than derrières.
The scene goes like this… a donkey is equally hungry and thirsty but finds itself precisely midway between a stack of hay and a bucket of water. The paradox suggests the animal will die of hunger and thirst because it cannot make a rational decision to choose one over the other.
What’s the business message?
At this point, we need to think about another animal… the elephant in the room. We’re talking about a recent event, not seen in generations. A head-to-head contest, with a narrow victory. Something that left a country shocked and divided, raising all sorts of questions – like with Buridan’s ass.
As I’m sure you realise, we’re talking about the BBC losing out to Channel 4 over the signing of the Great British Bake-Off…
Seriously though, yes, I mean Brexit. For UK businesses, the country’s decision to leave the EU creates a major dilemma. Put simply, companies face two options post-Brexit:
1) Should we invest, seeing Brexit as an opportunity?
2) Or, should we baton down the hatches, make cutbacks and anticipate a downturn?
In this very real scenario, it’s possible to feel paralysed – not by hunger – but by fear and uncertainty. The danger is, companies end up doing nothing at all, lose direction and waste two years, while competitors drive forwards. To me, that seems the worst decision of all.
I don’t have a crystal ball, but…
Every company’s challenge will be unique, yet there are two guiding principles that will help businesses to chart these uncertain waters. Both of these point towards the growth option.
Firstly, the UK government is taking positive steps to encourage business. It’s backing a fall in Company Tax from today’s 20 per cent to 17 per cent in 2020 — with the suggestion of a further reduction to 15 per cent. Meanwhile, significant support for innovation and entrepreneurship is arriving to drive economic diversification. The UKTI, mayor of London and others are getting involved. If incentives appear, don’t miss out.
Secondly, the unstoppable march towards pay-as-you-go services for everything from staffing, to vehicles, offices and virtually all IT and support, make it easy for companies to grow without risking huge amounts of capital. Switching to these business models will help you to focus on what you’re best at and what’s most profitable.
I’ve got to mention the pound too, although currency markets are always volatile. Any fall in the value of the pound also throws up interesting possibilities. Investment coming into the UK from overseas will stretch further and exports from the UK will be cheaper.
Overall, I’m advising companies to invest carefully rather than cut back. But do it in a flexible, focused way. What’s essential is that enterprises don’t end up like Buridan’s ass and simply perish because minds can’t be made up. During times of dramatic change, doing nothing can have fatal consequences.
Talk to me about your growth ambitions and we’ll explore the best way ahead.
Stefano Maifreni is founder and director of Eggcelerate, the business expansion experts.