As some readers of this blog will already know, I recently returned to the office after a 2 month lay up following an injury to a major artery in my neck and am still having to take things easy as I will not be back to full fitness for a few months yet. I am writing about this not as an excuse for not blogging over the summer mind you, nor even to gain sympathy (how sad), but rather to share an insight which this experience has lent me which I think is eminently transferable to business life, particularly where you have a business partner which is, or may soon be, insolvent.
It has reinforced a message I first heard some years ago during the Irish property boom at a conference in Dublin. A construction tycoon (let us call him Mr Murphy for the sake of stereotype) stood up before hundreds of delegates and gave a very frank explanation as to why, despite making hundreds of millions of euros, he nevertheless chose to place his substantial legal spend with a relatively small firm of solicitors rather than moving his business to the ‘top flight’ of legal service providers. His explanation was simple. It was not that they were necessarily the most cost effective (although their rates were competitive), nor even that they had excellent partner-led service in his sector (although they did). Indeed, it was a far more human than business-related reason: those solicitors had stuck with him through his lean years, and quite simply he was grateful and trusted them to protect his interests because of that. The fact that they may not have had all the leading specialists on their payroll was a matter of indifference to him. Trust was far more valuable.
Now it may be that Mr Murphy, if he did not get out at the top, has fallen on hard times once again, I do not know. It may even be (heaven forbid) that he is at this moment seeking a bankruptcy order in the English courts having moved his centre of main interests here. I hope not, for his sake. What I do know is that until you experience proper adversity, whether personal or financial, a message like that probably doesn’t resonate terribly well with you. It sounds right in principle, and you may log it for a future date, but does it inspire you to follow it in your daily life? Perhaps not. When adversity hits, however, is when you learn who your true friends are. I am not talking about your direct colleagues as such (if you are anything like me you keep an excellent and willing team around you who can take up the reins for a bit). I am talking about your wider business relationships, your suppliers, your customers, your referral network.
If they send you a (real or figurative) fruit basket and/or messages of support (as many of my contacts did when they learned I was unwell) to keep your spirits up, or better yet help you keep a few wolves from the door to take some of the stress away, you feel disproportionately warm to them when you are getting back in the saddle, and much more inclined to want to push business their way. One hopes this was not the reason your contacts may go to such lengths for you, but the power of basic human emotion in business is not to be underestimated.
Like most of the qualified insolvency practitioner accountants I interact with regularly as a consequence of my job and holding the position of Vice-Chairman of R3 Southern Region, I have now been assisting clients – both private individuals and companies – with various forms of adversity for over 15 years. Sometimes the insolvency issue they are facing has been their own, other times it has been a debtor or other business partner of theirs. I have always tried to deal with these issues sensitively and with as much empathy as is consistent with the result they intend to achieve, and I would hope I have most often succeeded in this regard, in particular trying to be as transparent as possible as to the cost of legal intervention and staging that cost to fit in with the overall position. For this reason I rarely if ever have to deal with outstanding invoices for my own firm’s fees, and on the occasions where my clients have needed repeat services they have had no hesitation in coming back to me.
After my recent experience, however I intend to redouble my efforts not only to be supportive of clients and contacts in adversity, but also to take a renewed personal interest in the business (and where appropriate personal) lives of those with whom I have enjoyed a business relationship for many years. I would endorse this approach for both creditors and debtors alike. Scratching (appropriately!) beneath the surface to gain a better understanding of your business partners will more often than not increase your business with them, but it will also give you early warning of any issues with which you might be able to assist, not just to minimise your own exposure but also to ensure they are getting the right (where appropriate professional) assistance before they suffer any lasting damage.