Top Tips for Tough Times: How to Survive a Company in Administration

Habitat, Oddbins and Focus DIY are just three retailers who appointed administrators in 2011. According to research by Deloitte, the accounting firm, the number of retail companies falling into administration in the second quarter of 2011 increased by 8% to 43 compared with 40 in the same period last year. And so, in these tough economic times, many finance professionals will find themselves unexpectedly working for a company in financial difficulty. 

This is sometimes known as working in a ‘distressed environment’ and with good reason: it can be a challenging platform from which to operate. But there are various ways to ensure you keep smiling and come out on top. 

Accept the things you cannot change

When a company is in administration, business matters are out of the control of the directors and board. The administrators are running the show and will be making day-to-day decisions about creditors, payments, banking, risk and invoicing: all matters traditionally under the control of the finance department. Understandably, this can be disorientating and difficult for anyone whose remit has previously covered any of these areas. Fighting the administrators won’t help; they’re appointed to do a job and they’d like your cooperation but can do what they like without it.

Anyone familiar with Elizabeth Kubler-Ross’s ‘Change Curve’ will know that the reaction to change traditionally starts with denial and is followed by anger, bargaining and depression. The curve ends with acceptance of the change. In an administration situation the earlier the finance department moves to acceptance the easier life becomes for everybody concerned. Once the administrators have been appointed, acceptance and cooperation are your friends. The only things you can change are your reaction to the situation and your own behaviour.

Stay professional 

Once a company is in administration almost anything could happen: the business, or part of it, could be sold (and you with it); you may want a reference from someone you currently work for; the company could close altogether. But if you stay in the same field you will continue to bump into the same people, professionally, for many years to come. So keep your cool and remain professional at all times – it can only enhance your reputation. And in business, matters are never made worse by good manners and a positive attitude but these are often noticed and rewarded. The company shouldn’t expect you to lie to customers or suppliers so maintaining your integrity is important too but any particularly difficult matters can usually be referred to the administrators.
 
Keep your cool

This is similar to staying professional but with a slight difference: it’s about recognising why your co-workers, who have hitherto been cooperative and maybe, even, your mates, have suddenly turned into  psycho colleagues from hell. Life can be difficult working for a company in administration and everyone from the Chief Executive down will be feeling the strain. And stress, uncertainty and extreme anxiety can change people’s behaviour. Not yours, of course, because you will stay professional but if you recognise that your colleagues may not be themselves and make minor allowances accordingly you’ll be making your life (and theirs) a lot easier. That’s not to say that the unacceptable is suddenly to be tolerated, because it isn’t, but if someone is behaving in an uncharacteristically difficult way it might be worth temporarily cutting them some slack. This doesn’t only apply to colleagues – suppliers and customers may also be edgy and uncharacteristically badly behaved as they try to protect their own interests. You don’t have to be a doormat but keeping calm and carrying on is the right thing to do. And the view is better from the moral high ground.

We are where we are

In an administration situation some workers will already have left the company, some will have been made redundant – and given little incentive to hand over  before they leave – and others will still be employed but perhaps without leadership or without the knowledge they need to carry out their roles. This can sometimes mean that nobody understands a process or procedure end to end, due to lost knowledge, poor paperwork or newly-unsupported computer systems. You could spend months trying to track down the original source of knowledge – good luck with that – but sometimes it’s quicker to create a new process than establish how the old one worked. And there could be a silver lining because this can throw up improvement opportunities, which any business should make the most of as they arise. And of course, if everything is documented when you move on or are promoted, the colleagues you leave behind won’t be left in the same situation.

It’s tough working in any position in a company going through administration or in financial difficulty – whether you’re the CFO or the office cleaner, uncertainty is always hard to deal with.

But you can make the best of it by behaving well, giving your best, and remaining calm and professional. Who knows? Once the administrators have moved on there could be a job for you in a restructured company, a recommendation from someone who liked your business-like style or a new opportunity via an ex colleague. And, like a phoenix from the ashes, your career stock could rise too.



Louise Graham spent five years working for The Walt Disney Company before taking a break to have her two children. Since then she has worked on an interim basis for Abbey National, First Choice, The Carphone Warehouse and Fountains, who were previously part of Connaught plc (in administration). Fountains separated from Connaught plc and moved into independent ownership in 2011.

Interim Results

Do you describe yourself as ‘results-orientated’? If so, being an interim could be right for you. Although the word interim means ‘temporary’, interim managers are much more than temps; they’re employed to get fast results and to help organisations effect change, sometimes in turbulent times.

In the finance and accounting world, this could mean project managing a computer system implementation, turning around the performance of an underachieving team or stepping in when a senior person leaves.

The potential rewards are high (with daily rates ranging from £300 to £1,000 for a senior director level interim), but so too are expectations. Interims are expected to hit the ground running and make a difference almost immediately – there is unlikely to be a ‘settling in period’ or any long induction. The expectation is that an interim understands the brief, creates a plan to achieve the desired result and executes it more or less flawlessly before leaving and moving on to the next role. And all this while remaining aloof from the politics and knowing both the end game and date.

This might sound insecure, and it is; interims who don’t get results can be terminated fast. Anyone considering becoming an interim should be confident that they can deliver and be happy to live without the security and benefits that come with a permanent job. Given that even the most seemingly secure permanent jobs aren’t secure in this economy, many finance and accounting professionals won’t see that as a downside. The Chartered Institute of Personnel and Development (CIPD) are predicting that more than 600,000 people will be made redundant in 2009, so a permanent job doesn’t necessarily provide what it says it will: permanence.

I have worked as an Interim Finance Manager on and off since 2003, and for me, the benefits outweigh any downside. My assignments have included improving the customer service provided by the transaction processing department of a large bank, temporarily managing a payments team for a well-known telecoms company and being a safe pair of hands for a forty-strong finance team in the travel industry. My next role is covering a manager’s maternity leave, and I’m looking forward to learning about a new industry and managing a new set of people and challenges.

If you like meeting new people, enjoy change and appreciate the freedom of leaving once a result has been achieved, then being an interim could be for you. Companies are usually looking for people with specialist knowledge or experience (mine is operational management of payables, receivables and payments teams) or experienced senior managers, usually those commanding a permanent salary of more than £50k. Interims are expected to employ an umbrella company such as Parasol, or to take specialist accountancy advice about setting up a limited company before starting a contract to legally maximise tax benefits.

Being an interim works for me. I enjoyed more than ten weeks off in 2008/9 after a year-long assignment (although it was, of course, unpaid), and I am now refreshed, recharged and looking forward to the next challenge. And when the next contract ends in December 2009, I’ll say thanks, well done, Happy Christmas and gladly move on.

Louise Graham spent five years working for The Walt Disney Company before taking a break to have her two children. Since then she has worked on an interim basis for Abbey National, First Choice and The Carphone Warehouse. She is about to start an interim role with a leading property management company.

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