The Brexit Effect

The countdown has begun: On 29 March 2017, the U.K. government triggered the formal process to leave the European Union (EU) within two years. Negotiations began in June, just weeks after an election wiped out Prime Minister Theresa May’s Conservative Party parliamentary majority—adding new uncertainty to the Brexit process and its impact on Britain’s projects, programs and portfolios.

“Brexit brings uncertainty to organizations across multiple industries—here and across Europe,” says Jonathan Clay, PMP, project manager, Close Brothers Motor Finance, Doncaster, England. “There’s a general expectation that in affected industries it will impact many project plans and portfolios. The question is: when? And how?”

Many U.K. organizations are grappling with “a delay in some decision making” around IT spending, for instance, Gartner research vice president John-David Lovelock told ET Now in April. In the IT arena, portfolio managers are wondering how Brexit will reshape things like data protection regulation, labor markets and currency rates. Such uncertainty is causing organizations to pump the brakes on projects as varied as data center construction and product development. “We see a lot of organizations that are still stalled and not making decisions moving forward,” he said.

Mind the Gaps

Following Brexit, the movement of EU workers into the U.K. could be blocked or significantly slowed, which could lead to project delays or rising labor costs, particularly for big-budget infrastructure projects. For example, the new Heathrow Airport runway, the HS2 high-speed rail project and the Hinkley Point C nuclear power plant project could all be disrupted, according to a National Audit Office report released in March.

The report argues that, for civil projects at least, prioritization at the portfolio level—and halting projects that face serious execution challenges—is what’s required in the face of Brexit. “Government projects too often go ahead without government knowing whether departments have the skills to deliver them,” the report noted.

However, project leaders are trying to mitigate the risk of a talent shortage with other creative solutions. Heathrow Chief Executive John Holland-Kaye has suggested that project leaders from Heathrow, HS2 and Hinkley Point work together to coordinate phases of their respective projects to ease the talent pinch. “The last thing we want to have is for all of us needing exactly the same mechanical skills at the same time,” he told Sky News in March.

On the other hand, Crossrail, the landmark 26-mile (42-kilometer) tunnel project slated to be completed in London next year, shouldn’t be impacted by Brexit. Its sponsor says that project managers worried about Brexit can borrow a page from Crossrail’s playbook: Cultivate homegrown talent. “People said we wouldn’t find the skills we needed, but we’ve trained 650 apprentices on this project,” Crossrail’s chairman, Sir Terry Morgan, told Sky News. “You have to have tenacity, and we as a country can develop skills through these big infrastructure projects.”

Opportunity Ahead

But where there’s a talent shortage, there’s also opportunity. “I actually think demand for highly qualified project and program managers will increase dramatically,” Mr. Clay says. “Because what Brexit brings is uncertainty and complexity—and that’s exactly what the project manager is there to deal with.”

Transformation specialists and compliance specialists will likely be hot commodities, he says, as multinational organizations have to implement significant change initiatives and stay abreast of changing EU and U.K. legislation and requirements. “For people interested in project management, this is an exciting time to get involved and grab ahold of the opportunity,” he says.

The looming project management skills gap—and possible career hotbed—extends to Ireland. Nearly
 70 percent of respondents to a recent PMI Ireland Chapter survey expect Brexit to increase the complexity of their projects—and 60 percent said there aren’t enough experienced Irish project and program managers to fulfill the country’s project management needs.

“Project management will be instrumental in navigating this uncharted territory that is Brexit, from managing a company’s future trading relationships with the British market to working with major financial institutions who are expected to relocate here,” PMI Ireland Chapter president Niall Murphy, PMP, told The Irish Independent. “ This shortage needs to be tackled.” —Kate Rockwood

A Project Unto Itself

Lack of buy-in from key stakeholders. Muddled scope. Brexit might be one of the most highprofile projects in U.K. history, but that doesn’t mean there’s been smooth execution so far.

Now the country’s National Audit Office is warning of government capability gaps in the areas of project planning and benefits realization. Plus, the government has been slow to fill many Brexit-related positions in the new Department for Exiting the European Union and Department for International Trade. “One of the key components of being able to execute any project is not only having the money but actually having the people or the staff resources to execute,” says Lou Pack, PMP, senior vice president, ICF International, Washington, D.C., USA. The organization assists public-and private-sector clients around the world with program management. Still, he applauds the creation of the two departments in July 2016 right after the Brexit vote. Creating a Cabinet-level position specifically for Brexit is “akin to appointing a PMO for the project. It sends a signal to stakeholders that there is a single point of accountability.”

But with nearly half
 of U.K. voters opposed to Brexit, stakeholder resistance isn’t likely to disappear anytime soon. Whether project hurdles can be defeated—and Brexit can be deemed a success—won’t be clear for years. Meanwhile, the whole world is watching.

Source: PM Network 08/2017 - BRAND NEW

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