An Update from our Chairman: Navigating the Storm

Anthony Long
January 14, 2021

We live in very challenging times and in a world that is changing at a faster pace than at any time in modern history. This pace of change is exciting for some and daunting for others. In business, however, it is a reality that cannot be ignored, and businesses that chose to resist this change are quickly being left behind as new incumbents aggressively disrupt the status quo and take over.

On top of all this, over the last year, the global pandemic has added multiple new layers of uncertainty and disruption, and in the UK, Brexit has meant that most organisations have been unable to plan with any degree of confidence. Collectively, this has resulted in a highly unsettling environment for business leaders everywhere and in 2020 being one of the most challenging years in a generation.

So how does one navigate through these stormy seas and steer a path towards future prosperity? Well, for me, clarity over long-term core strategy is key, as is developing a business culture that embraces change and is nimble, flexible and open-minded to new ideas.

Core strategy provides a clear guiding light for business decision making. Each decision taken needs to fit and align with the organisation’s core strategy. If it doesn’t, the business needs to be disciplined in asking ‘why are we doing this?’. Having a well-defined core strategy also allows business leaders to make short-term tactical decisions with greater confidence, which in turn enables companies to adapt quickly to the rapidly changing environment.

So it is important to confidently know what your core strategy really is. Achieving this clarity is often harder than it sounds, and business leaders need to invest considerable time and effort into defining their core strategy and working though the key objectives towards achieving it. They also need to clearly communicate these outputs to their employees and constantly remind the business of not only where it is going, but also why it is moving in that direction.

Before considering core strategy, business leaders first need to answer the ‘Why’ question. Why do we do what we do? The ‘Why’ is the purpose, cause or belief that drives every organisation. Every business has one, but very often employees do not know ‘Why’ they do what they do. Our ‘Why’ has always been simple; we exist to give our clients a better experience and a more personalised service through the combination of our people, our technology and our values of innovation, integrity and excellence.

Core strategy is then usually broken down into three clear statements of intent. Firstly, there is the ‘What’, then the ‘How’ followed closely by the ‘When’. Usually, the ‘What’ is pretty straightforward. Most businesses know what they are doing and understand their general direction of travel. But being honest and critically assessing whether ‘What’ you are doing is fit for purpose in the next decade and beyond is more difficult and is crucial to successfully concluding this stage.

Some of the world’s most successful businesses started out doing one thing really, really well but over time realised that that one thing was not going to stand the test of time. They then redefined themselves and became something completely different. IBM and Apple are two corporate giants that immediately spring to mind in this regard.

Having defined ‘What’, the next two stages of ‘How’ and ‘When’ are often the hardest steps to complete. Both need to be challenging yet achievable. They also need to be simple and easy to communicate to employees. It is people that will be delivering the ‘How’ and the ‘When’, so clarity on both counts is mission critical to successfully executing core strategy.

When all three elements are aligned and clearly communicated, a business can navigate stormy seas with purpose and confidence. It is able to make short-term tactical decisions to avoid the worst ravages of the storm, whilst at the same time knowing exactly where it is on the map and what needs to be done to get back onto the long term course.

2020 has been a year like no other. We are living through some of the most rapidly changing short-term circumstances in modern history. Pretty much everything that was certain yesterday has become uncertain today, and the pandemic has dominated short-term tactical and economic decision-making right around the globe.

But more challenging still has been the less visible, but equally dramatic shift in long-term working practices and lifestyle changes. Lockdowns, travel restrictions, video conferencing, working from home, online purchasing, paperless office environments and home schooling are all dramatically affecting the way that we live and work. They are also having significant knock-on consequences to the way our towns and cities operate, and are threatening the very survival of our retail, aviation and transportation industries, along with damaging mental well-being and disrupting school children everywhere.

Many of the short-term tactical decisions needed to adapt to the changing environment have been executed relatively easily. Most of the working population was either furloughed or has quickly moved to home working. The use of video conferencing has surged and whilst international travel has diminished significantly, a switch to local staycations and community support has benefited local retail and hospitality businesses greatly. In short, most have survived the turbulence so far, but the full long-term impact of these changes is going to be profound for many and has not yet become fully clear for most.

It is becoming clearer by the day that for most businesses, digital service solutions are now much more important than before the pandemic and will become more and more important to successful and scalable service delivery in the future. Businesses that do not embrace digital solutions will inevitably fall behind and many will fail. Indeed, we are already seeing a clear pattern of winners and losers in the retail sector, with digital and online delivery far outstripping bricks and mortar retail in most cases.

So what next? As I write, the UK has just announced a new six-week lockdown, with dire warnings of NHS overload and a public health emergency. The Isle of Man has closed its borders and introduced a 21 day ‘Circuit Break’. Most of Western Europe is either in the same position or not far behind the UK, as is South Africa, the US and many other parts of the world. In short, the pandemic remains in full swing, and things are likely to get worse before they get better. But vaccination programs are now rolling out rapidly; in the UK, the most vulnerable and elderly people will be vaccinated by the end of February. It is estimated that 90% of COVID related deaths have occurred in these high risk groups and whilst the virus is still going to be out there, the health emergency will improve rapidly as the vaccination program progresses.

For the UK, there is also now a trade deal with the EU, and whatever your political views on the matter, there is now certainty on the way forward in the UK’s trading relationship for goods with Europe. We await more clarity on services, but on the whole this is good news for business, as it will bring increasing clarity where uncertainty reigned before, and this will be reflected in stronger economic activity this year.

Personally, despite these dark days, I am extremely upbeat about the future prospects for our business and the wider Isle of Man community. We are a few weeks away from launching the Island’s first truly digital corporate bank and we have a very well defined core strategy to roll out further digital integration across all parts of our business in the year ahead. There will without doubt be more change and more uncertainty to come. We will however continue to make short-term tactical decisions to avoid the worst ravages of the storm, in the confidence that we know exactly where we are on the map and what needs to be done to stay on the long-term course.