Aiken PR

The Briefing

Are we witnessing the UK’s greatest–ever own goal?

by Aiken PR

19/03/2019

It was early September 2018, the prolific Dubs had just raised the Sam Maguire for a fourth time in four years and the stands of Croke Park were awash with jubilant scenes of sky blue and navy.

The Dublin dynasty continues, with high hopes for a fifth successive all Ireland win in 2019, however, things could have been all so different had it not been for a couple of now infamous own goals in the 2016 final against a gallant, but ultimately unfortunate Mayo side.

Own goals are synonymous with sport; however, business hasn’t been averse to own goals itself, with ramifications often leading to crises, which have led to reputational damage, and have, in some cases caused the collapse of a business or product.

There have been many notable examples over the years of scenarios where the trajectory and value of companies have been irrevocably altered by blunders leading to a market nose dive or a failure of public confidence.

The case of Gerald Ratner, of Ratner Jewellers in 1991 lives long in the memory as a seminal case study in this arena. The one–time jewellery mogul stated in a speech ‘how can you sell this for such a low price?’ I say, because it’s total crap’, when describing his company’s famous cut–glass sherry decanters.

This action subsequentlywiped $500 million from the value of Ratner Jewellers and led to his resignation from post the following year. Having devoted 30 years building the business, its reputation was destroyed in one evening, courtesy of a private conference speech.

Similarly, in July 2001, then Topman brand Chief David Shepherd created pandemonium through committing the fundamental error of insulting the businesses’ target market and core customer base.

In an off–the–cuff interview to a trade press magazine, Shepherd described Topman customers as “hooligans or whatever” and went on to state that “very few of our customers have to wear suits for work. They’ll be for his first interview or first court case.” 

Like the case of Ratner’s, Topman’s company shares fell by 4.5% after the comments. This episode once again demonstrated the dangers of ill–prepared and careless rhetoric which, when taken in the context chosen by reporters and readers can lead to dire consequences.

In terms of political own goals, we certainly don’t need to delve into the archives to find pertinent and contemporary examples of actions which have damaged the economy and divided people. One word usurps all, Brexit.

If we consider the political disruption, civic division and business uncertainty which has culminated in the exodus of high profile companies exiting the UK and moving to other EU countries or regions, the process could well be described as the greatest ever own goal.  And that’s even before Brexit has actually happened.

When David Cameron called a referendum in February 2016, few could have envisaged such a fraught, drawn out and unpredictable period ahead.

Whilst in constitutional and legal terms, little has changed, the business community has paid and continues to pay a significant price in relation to both current operating conditions and the future working environment.

The well–publicised exits of household names like Nissan and Dyson from the UK have generated a feeling of frustration and uncertainty for the public at large.

Consumer goods company Unilever also transferred their European headquarters to Rotterdam, with financial giants like Goldman Sachs, Barclays and HSBC all moving substantial operations away from the UK.

Despite some reasoning to the contrary, Brexit is undoubtedly playing a central role in such decisions.

What started out as means through which to banish UKIP and appease the far right of the Tories has escalated into a crisis of confidence for the public and business community.

The government’s no deal tariff proposals (as published last week) were met with derision by our local business organisations and in a no deal scenario, economic prosperity on the island of Ireland, and indeed within GB, will be collateral damage.

As a business that operates across the island of Ireland with offices in Belfast and Dublin, we advise clients in both the UK and Irish markets.  Over the last 18 months we have been working with and supporting many of our clients, on the implications of the Brexit process and, the scenario planning requirements it has placed upon them. 

It is of course smaller businesses that are left most exposed within this process.  The Department for Exiting the EU said last month that 200k out of 240k UK companies have not made any preparations for Brexit, the majority being small businesses.  The reason, of course, in many cases is that they cannot afford the investment of planning for scenarios that may not happen.

While the Irish government has been more proactive, the UK government has been slow out of the blocks to support business especially when you consider the bureaucratic impediments it will be placing on companies and organisations when Brexit is implemented.

With government found wanting it has been up to representative business groups and the businesses themselves to plan, where they can, with the likes of the pharma and the agri–sector quick off the mark due to their integrated EU supply chains.

Movement of goods, customs, VAT and product compliance, supply chain mapping, contractual agreements, employee immigration status and of course financial planning are just some of the areas that business need to consider.

The burden of all these challenges can ease significantly, if the government does what is right for the whole of the UK.  It knows what it must do, which is cut loose those that are prepared to play hard and fast with jobs, lives and prosperity and deliver the deal which works for business, supports employment and economic investment. 

Already we’ve seen significant changes take place with jobs being cut and lives being damaged and confidence in political structures being shattered.

To bring it back to a sporting analogy, we are at this point undoubtedly, in injury time.  Leadership is something we often see in the sporting arena, particularly in the final throes of a sporting contest. This process has been completely bereft of leadership but maybe, just maybe, at this final political hour we will see the courage and conviction required to pull back from the brink to secure a deal which will mitigate against some of the damage of the UK’s greatest ever own goal.