In the SME world, adversity brings opportunity

Amongst the many learning experiences I’ve had in business, three stand out for the sheer richness of learning they gave me.

Maybe it seems counter-intuitive on the surface, but each of these were around business failures. Not my businesses, but ones I was deeply engaged with.

I’m not going to mention the companies. It isn’t fair and it would add nothing but titillation and wouldn’t add anything valuable.

The first of these was 25 years ago and involved a nationwide business that was a beloved brand with an elegant business model that almost guaranteed success. I started in the business just at the time the iconic owner sold it to a bunch of over-leveraged corporate raiders who seemed to have little idea of what they had bought.

What had made the business special was that even though there were hundreds of staff all around the country, it was like a family. People truly appreciated each other and felt they were part of something bigger than themselves and the loyalty to the company, the owner and each other was a beautiful thing to behold.

Intangibles like this are inaccessible to corporates no matter how hard they try to synthesise humanity. The truth is, a corporate exists only to enrich the shareholders so in the end it all feels like a zero-sum game. Someone winning means someone else losing.

It took all of 18 months for this gem of a business to fail and I recall the day the receivers arrived and the pain and devastation it caused.

The second of these was maybe 15 years ago. A small franchise business dotted around New Zealand. Early on in my time there, I did a tour of the franchisees and to my great sorrow, found that three of the group were trading insolvent.

The franchisees were good, decent people out of their depth with the complexities of financial management and had been operating on the basis of hope, which I hardly need remind you, is not a strategy. Liquidation was the only answer for these unfortunate folk.

The third of these was more recent. A very well known international New Zealand business that got chopped off at the knees by our old mate COVID. Absolutely floored as though it had been sucker-punched outside a nightclub late at night.

So, through these three experiences, hundreds of people lost their livelihood, many suppliers never got paid what they were owed, and many customers never received what they had legitimately paid for.

What possible good could there be out of all this? To my dying day I will relive the moments of humanity. Too many to recall individually, but when there is pain and crisis all around, there are some things that make a real difference.

When it feels like all is lost, it really isn’t. In the first case, I was privileged enough to be in a position to try and help suppliers minimise their exposure and losses and make a terrible situation a little better.

In the second case I was able to work with the franchisees to ease them through the pain and shock of discovering that the situation was real and non-repairable and then on into finding that there is life after everything you’ve believed in is gone.

In the third case, I was able to bring my experience in the first two cases to the table and support a great many shell-shocked people in denial and fear with a bit of humanity and good humour.

I was also in the “lucky” position to be in my home office during lockdown talking on a daily basis with creditors worried about their money.

Here’s the bottom line to all this. Humanity transcends everything in the end. Money comes and sometimes it goes. Material possessions are there and then they’re gone. It’s both sad, mad and a terrible truth that often we don’t learn to be decent, kind, compassionate and reflective souls until everything else has been taken from us.

I’ve probably lost a few years off the clock through the stresses and pressure of searingly painful experiences in business, but I wouldn’t trade any of them for the clarity it is has given me about the importance of being a good human being. I am very far from having mastered this, but I am compelled to try and it informs every decision I make for myself and the people I serve and support.

I hope this means something to you too and I would be honoured if you had any stories yourself about adversity and what can come from it.

John. Interested in looking at a SME Exit Preparation Programme I've written specifically for NZ business owners even beginning to contemplate exiting? Have a look here.