Business consultants, PWC, recently (Jan 2017) released a survey of UK chief executive officers, asking them about their companies’ futures, post-Brexit. The results are worrying: why?
Is it because CEOs foresee a future of doom and gloom? Not exactly. Are they concerned about the freeze on public sector spending? No. Are they gloomy because of the exodus of EU skilled people? No.
The results are worrying because UK CEOs are deluding themselves about their companies’ future growth prospects. Far from being guarded and apprehensive, they are ostriches hiding their corporate heads in the sands of ill-founded corporate optimism. The survey figures speak for themselves.
Although the PWC survey revealed that only 17% of UK CEOs think worldwide business will grow, the CEOs said their own companies would be fine: 89% said they were confident about their businesses. And 95% said their revenues would grow. Yes, ninety-five per cent! And this at a time when sales and marketing organisations are reporting a long-term decline in revenues (IT industry analysts, CSO Insights, claim that only half of sales professionals hit their sales targets in 2016, with worse to come in 2017).
So how will UK CEOs engineer this remarkable growth? Do they have new products in their production pipelines? Or maybe innovative sales strategies? Or perhaps they are already planning campaigns beyond Europe? Or maybe they’re coaching their sale teams in foreign languages and foreign business customs, and setting up satellite offices in South America, Africa, Asia and ‘down under’?
Well, no, they’re not doing these things apparently. Instead, 91% of CEOs stated they are planning to ‘drive internal organic growth’ (whatever that means) and boost headcount. What!? They think they’ll employ more people and magically create growth internally? Are they mad?
Well, let’s assume they’re not mad and, instead, they’re just ‘bigging-up’ their businesses because the time-worn rule of British business behaviour is to bluff, puff and ignore economic reality until the very, very last second.
So, based on this assumption that CEOs are sane but wildly over-optimistic, where will our CEOs dispatch their eager sales forces to seek new business in the post-Brexit world? Brazil, China, India, Indonesia and so on, you might think. No. According to this bizarre survey, the top three overseas markets for UK traders will be… the same as they were pre-Brexit: the USA, Germany and China: that is, a country that has launched the new Trump isolationism; a country that generates 45% of economic activity in the EU (which will no longer include the UK) and a massive country with equally massive economic problems, an erratic currency and a withering economy.
But that's not all. The survey also revealed that the UK is an increasingly popular business target with overseas competitors. Business chiefs from 16 countries see the UK as a more important market than last year, with the US, China, Germany (which UK CEOs rated as their top markets) and Switzerland among those more enthusiastic about doing business in the UK.
So where does this leave us? Well, if we are to believe the box-ticking CEOs, then the future is rosy. Over 90% think everything will be OK: they’ll be employing more people, reporting more revenue and toasting their success in the very same markets that we’ve struggled in for decades.
So, nothing to worry about. And there we all were, thinking that life post-Brexit would be tougher. Thank goodness we've got such confident people at the helm.