Insolvency statistics for August were recently released and the number of companies entering into formal insolvency processes is the highest it has been for several years.

The economic outlook isn’t great, with the IMF predicting growth in the UK will be lowest of all the G7, off the back of pandemics, wars, energy crises, labour shortages, and borderline hyperinflation. 

So, this environment understandably lends itself to increased company failures. When a company needs to enter a formal restructuring process, it brings with it a lot of emotion for directors and their wider teams, often resulting in one of the most challenging periods of their lives. 

Just a few months ago I found myself speaking to a team of 50 people telling them that incredibly unfortunate news that the company they had worked for over the last 34 years was no longer able to trade. Accepting this fact is extremely challenging for those going through it and also those in charge of steering the ship.

This can often bring a sense of failure, shame, guilt, isolation, depression, fear, anger…the list goes on.

But what often isn’t discussed is the opportunity for change, the opportunity to grow, and the ability to break new ground that otherwise wouldn’t be possible ‘but for’ the perceived failure.

On 5 June 2017 I stumbled out of a taxi, a bottle of vodka in hand, into a rehab facility in Guildford. It was my second time attending the facility to try and get real help with a drinking problem I was wrestling with. This was my last chance to get it right, having been given two years to live, experiencing internal bleeds, liver swelling and alcoholic seizures from withdrawal.

In that moment, the sense of shame and failure I felt was intolerable, it felt like my life was over and I was incredibly scared of what life sober would look like. What would people think of me? How could I be funny, or confident, or happy without alcohol?

I had my last alcoholic drink that day. I am now more than 6 years sober and my life has never been better. Everything about my life has improved, I am more aware of myself, my flaws and my strengths, than ever before. My biggest failure has turned into my greatest asset. 

Just as in life, when faced with extreme adversity, directors, management, and staff have an unknown opportunity to grow, and flourish. But how do you approach the period of difficulty, challenge, and financial failure, with the best fighting chance of coming out of it stronger. Like my time in rehab and recovery – there are several things that can help:

• A willingness to change. Overcoming addiction or a business challenge both require a willingness to admit defeat when it is no longer manageable. This is a surrendering process and the biggest irony about surrender is it is the best way to build strength. Its step one. 

• Get out of your own way. Whilst the ego is helpful in surviving challenge, fundamental change requires setting it aside. 

• Have a plan. This plan should include specific steps and goals, as well as a timeline for achieving them. Most importantly – exercise compassion over things not working out how you want them to, and always have a community of advisers and peers around you. 

• Seek a mentor. Someone else who has walked the path before you, someone who is able to act as a sounding board, and someone to challenge your thinking will steady the ship.

• Learn to let go of what you cannot control. Understand it is life on life’s terms. This will allow you more space to be effective over the things that you can control and not give so much mental real estate to the issues you cannot. 

• Consistency and hard work. To do this, keep it in the day. Anything can be achieved a day at a time. By promising yourself to try and work through the challenge and only have to do it for one day, it removes the sense of impossibility or the magnitude of the larger task.

• Being of service. Taking time to help others in the organisation will bring a sense of purpose and meaning back to the challenge. If you want esteem do esteemable things. 

A big part of our role as restructuring experts is not only having a high level of expertise, experience and an ability to problem solve. It also involves emotional intelligence, balance and an understanding of the challenges companies and people face. Something that FRP prides itself on. 

Much of the these attributes are simply borne out of navigating adversity previously, and the wisdom that comes from it. It’s important to recognise that it is human nature for us to avoid that which is difficult, which in turn only makes the problem worse. We see this frequently with directors in turbulent periods. 

Had I been able to deal with my challenges sooner it might not have gotten to the stage it did – and it’s the same with business. Moving away from anchoring survival on the next big contract or the uncertain, but large debtor that has been promising to pay, which gets the business out of the immediate crisis only buys time until the next crisis point. Deal with the underlying problem straight away to minimise impact and loss. Seeking expert advice as soon as the warning signs appear gives directors and their businesses more options and a stronger chance of a better outcome. 

But the good news is that even in the face of what may feel like defeat, a huge opportunity for growth always exists, and as a result of the challenges that might lay ahead for businesses, the ability to transform waits for anyone willing to engage in the process.

The same can be said for anyone facing financial difficulty and company failures in this challenging time. I am completely convinced of it.  

If you are in need of help with any of the personal issues addressed in this post, support is available by contacting one of the following organisations:

Alcoholics Anonymous Great Britain 

Helpline: 0800 917 7650

Email helpline: help@aamail.org

FRANK

Helpline: 0300 123 6600 (24hrs a day, 7 days a week)

Samaritans

Helpline: 116 123 (24hrs a day, 7 days a week)

Email helpline: jo@samaritans.org