There's a saying used in business which is very appropriate now as the deadline for finally leaving the EU behind, December 2020, approaches fast. It is "Confront the brutal facts". It's now too late to turn back.

We are over the edge and wondering how far away the bottom is - and we won't really find out for a year. Brexit is happening. It's time for everyone, remainers and leavers alike, to face the brutal facts. Remainers are in a far better position to do this than leavers.

The saying comes from Jim Collins's book "Good to Great", which is about what differentiates the great companies from others. The saying has been a very useful tool for me as a business strategist. It forces us to take off the blinkers and look at the reality of our situation.

This is particularly true when facing factors far outside our control. It helps us to take actions that, while unpalatable, are essential for survival - or for facing the fact that there is no way to survive and salvaging what we can. In business, this is contingency planning.

I am, among other skills, a contingency planner. I decided to look at businesses that I could see would be affected by the loss of EU treaty rights from a contingency planning perspective. What measures can these businesses take to protect themselves from adverse impacts?

A contingency is normally a single event that, with planning, can be recovered from, like a fire, power failure or cyberattack. Brexit is an event that is long-term. Any mitigation must take into account that these changes are in place for the foreseeable future.

In contingency planning the effort we put into a scenario depends on the impact and the probability of occurrence. We don't plan for an asteroid strike, but for a cyberattack we prepare for the attacker having encrypted all of the files, stolen all of the data and broken stuff.

We are back to pen and paper. Where's the print-out of the contingency plan? Does it have the contact details of all key staff in it? What can we do to stop any further damage? What do we say to the press, the police, the regulator, and when? The wrong actions can cost millions.

Contingency planning for brexit is different, but similar. There remains a reasonable possibility of a no-deal Brexit, so businesses have to have a plan for this. That plan depends on the impacts, and while every business is different, the impacts for an industry are predictable.

Just as with cybersecurity, the wrong approach can cost you your business. Many people are optimistically assuming that somehow the politicians will sort it out and things will carry on as normal. Unfortunately the changes are legal, and political flim-flam will not help.

Many larger businesses are already implementing contingency plans prepared much earlier. Some of these involve closing down factories, moving assets to the EU and restructuring supply chains. If these businesses, with all of their resources, are doing this - don't ignore it.

The background to this saying is known as the Stockdale Paradox. Stockdale is a former vice-presidential candidate, who, during the Vietnam War, was held captive as a prisoner of war for over seven years. He was one of the highest-ranking naval officers at the time.

He was repeatedly tortured and had no reason to believe he would survive. He survived nonetheless. https://bigthink.com/personal-growth/stockdale-paradox-confronting-reality-vital-success

Stockdale and Viktor Frankl, psychotherapy and holocaust survivor,  have observed that those who are optimistic in the face of evidence to the contrary are likely to end up dying in despair. Frankl called this "tragic optimism".

The Nietzschean view is "what doesn't kill you makes you stronger".

Stockdale himself said "You must never confuse faith that you will prevail in the end — which you can never afford to lose — with the discipline to confront the most brutal facts of your current reality, whatever they might be."

Leavers are optimists who believe that Brexit will somehow change their life for the better despite the mountain of expert evidence that it won't. Even the 'leavers economist', Patrick Minford, says that Brexit will end manufacturing in the UK. https://www.chroniclelive.co.uk/news/north-east-news/mps-react-after-vote-leave-11269819

The median forecast for Johnson's planned Brexit, agreed with the EU in the WA, is a loss of 6% of GDP. The 2008 financial crisis was in the end just a 2% loss of GDP, but still led to a decade of austerity.

The UK's businesses, perhaps more than other EU countries, took advantage of EU membership and rely on free movement, no customs checks and the EU's huge number of trade relationships with the rest of the world. Many quite possibly without realising how much they rely on the EU.

Which businesses are immune to Brexit? Knowledge-based businesses, like software developers, design businesses and electronics businesses (electronics are the only hard goods zero-tariffed under the WTO).

The closest parallel to the position the UK will be in is Israel, surrounded by neighbours it trades little with. Israel is a knowledge economy, with thousands of startups in IT, cybersecurity, AI, robotics and much more.
https://en.m.wikipedia.org/wiki/Economy_of_Israel

From Wikipedia: "Israel's quality university education and the establishment of a highly motivated and educated populace is largely responsible for ushering in the country's high technology boom and rapid economic development."

Unfortunately for the UK, 25% of the population is functionally illiterate in English and Maths. Despite leaver beliefs that the EU sent us low-wage low skilled workers, we imported a lot of our highly-paid knowledge workers from the EU.

It's too late for Project Fear, we can't change anything now. What we desperately need is Project Reality to ensure that the UK is in the best position, with the right policy decisions, to handle the coming changes. I don't see that currently from our government.

We have a lot of work and education to do to create an economy that can survive without close ties to its neighbours just like Israel, and leavers are in the worst position to be part of this. I fear their optimism is going to be a massive problem for them as the promises fail.