At Shepherd and Wedderburn, we understand that in today's economic climate, many businesses are grappling with a myriad of challenges. Directors often find themselves having to make difficult decisions, while at the same time dealing with the emotional pressures of running a business that is facing financial distress.
This Mental Health Awareness Week, we spoke with Andrew Russell. As a director, Andrew has first-hand experience of what it is like to weather the storm of financial distress and successfully steer a business back to calmer shores. Here, he shares his candid insights and lessons learned.
What are the most challenging aspects of managing a business that is in financial distress?
Staying focused. This is easy to say and hard to do. While the leadership team will all be aware of the details, the rest of the organisation will likely just have a sense of what's going on and this is very challenging to navigate.
You must believe there is a way forward even if you don't yet have all the answers. I like to think I was open and honest when we were in distress and, importantly, that the wider business and stakeholders knew we were focused on finding a way forward.
What lessons did you learn?
I learned the importance of identifying and addressing the underlying causes of issues to avoid them in the future. Our business faced two difficult periods in the past, one 15 years ago and another seven years ago, each presenting unique challenges. Be sure of whose opinion you can trust. Is it a professional opinion, one based upon significant experience in that area, a gut feel, or an unqualified view? You will likely be going through tough emotions. Is it clouding your judgement or sharpening it?
I realised that there are good people who genuinely want to see you and your company succeed. When you get stuck in your head, you won't see this. Don't isolate yourself as everyone faces challenges and are often keen to share their experiences.
What was most beneficial about the support you received from advisors?
They provided a calm, unbiased view of the situation. Stress levels can be enormous and impact your health. An advisor can help lay out the options, talk things through, and support you to be more level-headed. Our legal counsel was also able to help protect the company from heavy-handed creditors. This was crucial to enable more time for a better outcome.
What advice would you give other directors facing similar challenges?
Focus on why you are doing all of this in the first place. If you don't have a WHY then you won't have the mental and physical energy to do what you need to do. Improving cashflow is often the fastest way to steady things, so if you can sell assets, do it. Consider carefully whose advice you listen to and act upon. Colleagues, investors and stakeholders are sometimes not aligned, and you need to find the best way forward for the business.
Do your best to have a plan that the key stakeholders can all buy into. Don't neglect yourself or those you love. In 2009, I lost over two stone in two months due to stress. Not a recommended diet strategy. During that time, my kids were young, and even when I was at home, I was there in body only. Looking back, this didn't achieve anything other than a lot of regret. We often take our work home, but if something can wait until the next day (and mostly it can), I try to write it down and focus on my home life until the next morning. This is something I'm still working on 15 years later.
First published in The Herald.
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