An agreement has now been reached between Teresa May’s government and the EU, but polls suggest that it satisfies neither side. It’s interesting to review some of the early Brexit predictions and then consider how things have developed over the last two years. Before and immediately after the June 23rd referendum the pro-Brexiters were very clear about what was going to happen:
“There will be no downside to Brexit, only a considerable upside” – David Davis
“The day after we vote to leave we hold all the cards and we can choose the path we want” – Michael Gove
“There will continue to be free trade, and access to the single market” – Boris Johnson
“Getting out of the EU can be quick and easy – the UK holds most of the cards in any negotiation” – John Redwood
“The free trade agreement that we will have to do with the European Union should be one of the easiest in human history” – Liam Fox
And, of course:
“Take back control of huge sums of money, 350 million pounds a week, and spend it on our priorities such as the NHS.” – Boris Johnson
After almost two years of torturous negotiations, it’s clear that none of those statements was even remotely true. Now that the negotiations are nearing completion Brexiters are claiming that Theresa May should have been stronger with the EU. She shouldn’t have given in to their demands. However, David Davis – an ardent Brexiteer – was the chief negotiator for the UK until he resigned in July 2018 and he failed to gain any major concessions.
The Brexiters have explained that once they’re free of the EU they’ll be able to negotiate very lucrative trade deals with other countries like the US, China and India. There are many reasons to suspect that this won’t happen. After all, they’re struggling to agree a workable deal with the EU – which, they always claimed, would be an easy win. It’s obvious that they never understood the real complexities of the situation, nor did they appreciate that they have a very weak position. Despite their rhetoric, a no-deal would be catastrophic for the country. Unfortunately, they’ll be in an even weaker position when dealing with other countries, particularly powerful ones like the US and China. There may be trade deals, but they’ll only be achieved at a significant cost.
The people’s voice
There are many inconsistencies in the UK’s approach to Brexit. It was triggered by a small majority voting leave in a “non-binding” referendum. It’s clear that not everyone knew what they were voting for, and many people were misled by a host of untrue statements. The Brexiteers claim they’re enacting the will of the people but are adamantly against a second referendum – even though the electorate can now see exactly what they’re voting for, and the real implications are clear. Despite all this, some remainders still seem reluctant to press for a second referendum and many people are still willing to vote leave!
Let’s leave Brexit for a moment and consider Founders – those people with the courage and vision to set-up their own business. These people have total confidence in their new idea and in their own ability to bring it to fruition. They’ll explain that it’s a world-beater, there’s nothing else like it in the market. They’ll outline each stage in their plan, leading to the inevitable buyout. Clearly, everything is under control.
Of course, they know that five out of ten start-ups fail within 5 years, but they’ll argue that’s because many start-ups are set up by inexperienced first-time owners and are undercapitalised. It’s not surprising that another restaurant, fashion boutique or dry-cleaning store is likely to fail. They’re in a different world. They’ve already gone through a rigorous vetting process, including a thorough grilling of the management team. They already have seed and Series A funding, so they know what they’re doing – they can’t go wrong.
So we have highly confident founders, each with a fantastic idea, backed by millions of dollars. Are the results as good as you’d expect? Unfortunately, no. About one-third of VC funded start-ups are total failures. Another third break even, but don’t actually make any money. Only a third generate some profits and only 1% become Unicorns (start-ups with a valuation of a $Billion or more).
You can begin to see similarities between the Brexiters and Founders who fail. There’s that same confidence – everything is simple, nothing can go wrong, we’ll take care of everything and the results will be marvellous. It’s a confidence born out of lack of knowledge and oversimplification. They don’t understand the real complexity of the situation and they’ll instantly dismiss anything that doesn’t fit with their world view.
Confidence can be inspiring. The Brexiters convinced half of the voting public to back their vision and many founders have convinced investors to sink millions of dollars into risky ventures. Unfortunately, it’s far easier to convince people with a simple story rather than a complicated one, but the world is rarely that simple. Reality eventually catches up and the results can be devastating. If Brexit goes ahead it could result in:
- Increased taxes
- Lower wages
- Increased bureaucracy
- Reduced consumer protection
- Reduced health care protection
When a venture fails it results in lost investments, lost jobs and lost opportunities. And once disaster strikes people want to allocate blame. The Brexiters are blaming Theresa May for not getting what they want. When Founders are asked to explain their failures the most common responses are: no market need, ran out of cash and didn’t have the right team. But those are just excuses.
The Brexit Syndrome
The real reason why people don’t succeed is because they don’t understand what they’re getting into. They think it’s going to be much simpler than it is. They aren’t critical enough. Instead, they allow themselves to believe their own hype and become fixated on something that’s unachievable. They also prefer to go for the big gamble and risk everything rather than manage the situation systematically and patiently. And they lose. That’s the Brexit Syndrome!
Patrick Hough is an Irish management consultant and author. His latest book: “How to be a World Class Leader” teaches CEOs and managers to make better decisions.
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