Managing emotions is one of the hardest parts of a BRPs job

I have dealt with business rescues and turnarounds for over 20 years. The emotional damage these processes can cause is one of the biggest challenges many business rescue practitioners face when implementing a business rescue plan.

The reality is that employees and the suppliers that may rely on the company for regular business have only one emotional bucket when dealing with business rescue/turnaround. Unfortunately, this bucket can become easily depleted if management does not manage this process appropriately. An article by the Harvard Business Review (HBR) shows how to achieve this in the best possible way.

Don’t bury the lead

The HBR article points out that some business leaders think that tiptoeing slowly toward the bomb we’re about to drop will make the explosion less upsetting. It won’t. All we do is add anxiety to inevitable shock. If you have something hard to say, just say it. Then go to work on demonstrating understanding and empathy.

The author of the HBR article points out that he began his announcement to a team that was facing financial distress team with, “After months of deliberation about future potential directions for this special group of professionals, the board has come to the difficult decision to discontinue operations effective 90 days from today.”

Pause

The HBR article points out that, depending upon the suddenness and potential consequences of your decision, people may not hear anything you say for a few moments. Don’t just forge ahead. Pause. Let them breathe. Make eye contact with everyone you can. Allow them a moment to digest the headline. Then proceed.

Offer understanding and take responsibility — but don’t expect agreement. After pausing, the author of the HBR article points out that he said: “I know this is a lot to take in. I know this comes as a shock to many. I will take a few minutes to explain how we came to this decision. I don’t expect you to agree with our conclusion. But I owe you an explanation of how we got here.”

Do your best to explain the trade-offs leaders faced and the principles and criteria that guided the ultimate decision. Honour the fact that reasonable people may disagree. Don’t blame others for the decision. As a leader, you are an agent of the organization, and you accepted a responsibility to fill that role when you took your job.

Don’t let your desire to be liked overshadow your integrity. Even if you weren’t involved in the decision, your duty is to faithfully present the logic leadership used to make that decision. If you can’t ethically do that, it’s time to consider whether you can remain in that role.

Show empathy and end with openness

The HBR article points out that leaders of companies that are financially distressed should carefully and patiently do the emotional work. Don’t rush it. Fully acknowledge the impact of the decision and the emotions people might be feeling. Err on the side of validating rather than minimizing potential hurt.

The HBR article points out that the business leader should close with an invitation for both conversation and support. Don’t expect a resolution or applause. People will need time to process the decision. Focus on their needs not yours. Your logic might be irrefutable, but the emotions they aroused will take time to evolve.

Business rescue is a lengthy process

The other unfortunate reality about business rescue is that it is a lengthy process. South African Airways is a case that the public always turns towards when criticizing the length of the process.

While the SAA rescue is an extreme case, business rescue is lengthy. This takes its toll on employees who automatically become wary about their future.

The HBR article points out that there are three behaviours traits that need to be avoided in these situations:

• procrastination. The article points out that by putting off the painful experience, we put our own needs ahead of the team’s. In doing so, we rob them of precious time to process the news and explore how they can and want to respond;
• blame. The article adds that when we share the news in a way that puts the blame entirely on others, claiming disagreement with those who made the decision and loyalty to those negatively affected, we are shirking our leadership responsibility to balance the needs of the organization and our people; and
• detachment. The article points out that we might want to abbreviate our exposure to those whose lives will be affected by the decision. We unsympathetically announce the facts and steel ourselves against the pain they bring up.

If we put the employees and suppliers at the heart of the business rescue process, and appreciate the emotions that are involved in business rescue, BRPs can manage this process in the best possible way.

Phahlani Mkhombo is the MD of Genesis Corporate Solutions and is a Senior Business Rescue Practitioner.