How to Know When Your Business Needs Outside Help with Milly Camley

In this episode of The Value Agenda, Oliver Colling sits down with Milly Camley, Chief Executive of the Institute for Turnaround, to explore what the turnaround profession really looks like today  and why so many businesses wait far too long to ask for help. 

Drawing on 25 years of IFT history, a membership of the UK's most experienced turnaround practitioners, and a front-row seat to rising distress across every sector, Milly brings an authoritative and energising perspective on early intervention, the end of cheap money, and what modern turnaround actually demands.

Highlights

• What the Institute for Turnaround is and how its accreditation process works
• Why IFT members have been busier in the last 18 months than at any point in the organisation's history
• The single biggest barrier to turnaround engagement  and why it has nothing to do with cost
• How to read your cash position and competitive environment before you need external help
• Why the modern turnaround professional needs EQ as much as IQ
• The crossover between turnaround skills and growth business skills
• What risk registers miss — and what everyday risk awareness actually looks like
• Why the era of cheap money is over and what that means for mid-market businesses right now

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Transcript

SPEAKER_00 0:00

Welcome back to the Value Agenda. I'm Oliver Colling, Managing Director at Kingsgate, and today I'm joined by Millie Kendig, Chief Executive of the Institute for Turnaround. The IFT is the only body that accredits turnaround professionals in the UK. 25 years old this year, and in Millie's seven years of leading it, she's profession changed significantly. In this conversation, we talk about what accreditation actually means and why it matters. Why UK businesses wait too long, why that resistance is costing them more than they realise. And now that the era of cheap money is over, what do you do next? This is the value agenda. Let's get into it. Millie, lovely of you to join us.

SPEAKER_01 0:47

Thank you for having me.

SPEAKER_00 0:48

Absolute pleasure. Now, for those who don't know much about the Institute for Turnaround, could you explain what the IFT is?

SPEAKER_01 0:57

Sure. We are a membership organization for turnaround professionals. We were set up 25 years ago this year, in fact, we've reached our silver anniversary. We were set up by a group of company doctors, corporate restructuring officers, turnaround experts who were working further up the decline curve than had previously been the case. And they wanted to have their own accrediting process. And because there are lots of people who work in turnaround or say they work in turnaround who aren't necessarily proven experts, and it's not a regulated profession. So they wanted to have their own accreditation process. And in 25 years, we haven't moved far from that accreditation process, but the market has changed somewhat and we have expanded what we do. So we still provide accreditation, but we also provide a very focused network for turnaround professionals, and we also do a lot of work on professional development as well as advocating for turnaround excellence, which basically means explaining to companies, businesses, and government what turnaround is and the value of turnaround to the economy and to people.

SPEAKER_00 2:02

That's a really great position to have a really valuable service. You mentioned that there's no form of accreditation other than the IFT for turnaround professionals. What does the accreditation process look like?

SPEAKER_01 2:15

This is interesting because I always say that we're a deliberately small organization. So it is a rigorous process. So that makes my life interesting from that angle. To become a member of the IFT, you have to show us three case studies where you've taken a leading role in a turnaround. They have to be referenced. We need two sponsors who can talk about how you approach turnaround activities, your skill set, and how they have worked with you previously. We need you to fill in a core competency self-assessment that talks about some of the key skills that we would expect to see in a turnaround situation. We need your CV. And then we ask you to take part in an accreditation you do with experienced accreditors. So it really is a very serious process which all of our members, accredited members, have gone through.

SPEAKER_00 3:00

No, that's great. Having been through the process myself, I know it is quite rigorous. And but it's very useful because it's so important when you're offering up yourself as a turnaround expert or a turnaround practitioner. That, as you say, it's something that people can just call themselves a turnaround practitioner, but having that evidence to back that up gives real credibility to that description. And we find that with Kingsgate that it's really good. We're associated with the IFT, we have several accredited members who we work with. And it's really helpful for us as well just to establish that badge of credibility.

SPEAKER_01 3:33

Yeah, absolutely. And it's something that's recognised by, for example, lenders, private equity, other stakeholders in the market. And of course, it comes with a code of ethics as well, which is provides reassurance to business owners and sponsors.

SPEAKER_00 3:47

No, that's excellent. And how did you get involved with the IFT personally? How did you become chief executive?

SPEAKER_01 3:53

Oh, it's a little bit of a winding road, but I will try to summarise it. My professional background, I started out in politics and public affairs, and I ended up running quite big services in local government. And I am quite an unusual person from that background, in that I engaged with a turnaround professional who was IFT accredited, continued to work with that person, and he recommended me getting involved in the IFT, which is how I came across the role of chief executive of the IFT. And I guess my view was I don't come from this background, I'm not necessarily qualified, but actually, as it turned out, they wanted to have somebody who understood wider parts of business, different public sectors, different career backgrounds, and the ability to engage with members. For me, I wanted to join the IFT because I had a really positive experience of turnaround. So I had found it very energizing. It turned the organisation I was working in into an organization that was delivering much better services for its customers and was more resilient. And I found that there was a great knowledge transfer. So from that perspective, I was able to advocate really well for the benefits of turnaround. So seven years later, I'm still here. It's a great place to work because you meet amazing, very intelligent, committed people, and I get to see what goes on across a variety of different sectors.

SPEAKER_00 5:15

No, that's really great to hear. And your dedication just shines through from the way you describe it with such pride. You mentioned that some of the work of the IFT is with government. How do you engage with government and what sort of lobbying do you do?

SPEAKER_01 5:31

I wouldn't say we do lobbying per se. What we try to do a lot of is there's two things we do. We try to explain the benefits of turnaround, so explain actually what turnaround is, because not many people understand it, particularly in government. We provide regular reports demonstrating the value of turnaround to UK PLC and to people. For example, our members last year saved nearly 60,000 jobs and added £2.8 billion to shareholder value. So that is not insignificant in terms of the government's productivity agenda. So we do a lot of work around that, but then we will also work with different government stakeholders in different sectors. So for example, if we can see that there is a sector that's struggling, we will work with regulators in that particular sector to share knowledge, to share understanding, and to provide advice on how you can bring in accredited turnaround professionals.

SPEAKER_00 6:26

Great to raise that profile nationally. And then looking at the membership, what sort of individuals and companies are members of the IFT?

SPEAKER_01 6:35

So we have about 320 individual members. All of those are accredited members. About half of them are what we would call independent members. So what you might call company doctors, corporate restructuring officers, CFOs, FDs, CEOs who are specializing in working with stressed and distressed businesses and on the transformation side. The other half are from corporates, so they might be lawyers, they might be lenders, they might be from private equity backgrounds, and what we would call advisors, so people who are working with large advisory firms. So even if you come from a large firm, as you've noted, you still have to go through an accreditation process. And then we have 29 corporate partners. So those are the mainstream lenders, the advisory firms, the law firms who want to be engaging in the turnaround market, who want to be working with their customers to give them the best chance of success and increasing profitability.

SPEAKER_00 7:31

No, it's great. There's a huge variety of people with lots of different interests in turnaround. What sort of things does the IFT do for its members and its corporate partners?

SPEAKER_01 7:42

So mentioned earlier on what we do in terms of advocacy, sharing the story of what Turnaround is doing. We do regular reports and then we also do special information. So we've recently worked on a report describing what operational turnaround and transformation activity happens in the UK. And then we provide lots of networking and knowledge. So we have regional member events, we have lots of conferences that's about sharing knowledge with our community and further afield. We run regular webinars, so that might be providing information on technical matters such as changes to solvency legislation, it might be about changes to the director's duties, or it might be looking at a particular sector, so retail, automotive, etc. We also have the most successful next generation network in the UK. So we have over a thousand people involved in that network. And that's for individuals who are, they're not recent graduates, they're people who've decided to pursue a career in turnaround, and that provides them with great networking and knowledge opportunities. We run a women in turnaround network because traditionally turnaround has been somewhat dominated by men, which is true for many of the financial services professions, but that's a very vibrant network. And then we also run a quasi-MBA style program called the IFT Academy, which is a modular program focused on turnaround leadership and technical skills, really looking at active learning, learning from experienced CROs. That's very popular.

SPEAKER_00 9:14

That's a huge variety of things provided by the IFT. Really interesting to hear about that. And picking up on your point about the women in turnaround, my observation is the profile of those involved in turnaround has shifted quite dramatically in the last five, ten years. And I think the days of, even though I'm a white middle-aged man, the days of having a white middle-aged man going to a business, shouting at everybody and firing a few people, I think are really falling away. And apart from the really distressed situations, that kind of approach doesn't really work now. What do you think the modern turnaround professional looks like?

SPEAKER_01 9:50

So I think you've hit the nail on the head, and in fact, I'm oft quoted that when I started at the IFE, we used to quote we had more members named Steve than female members. We've now got more female members than Steve's, and I will be moving on to tackling the Johns soon too. But actually we are seeing that diversity in the profession, which also really importantly brings diversity of viewpoints and skills. Reflecting on what you were saying, yes, you absolutely need to have the kind of hard skill set, financial understanding, the situational experience. But with that situational experience comes the ability to manage your stakeholders, to create certainty from uncertainty, to take people through a process and have a skills transfer. So that's probably quite different from the way the world used to be 20, 30 years ago. And we're expecting EQ is as important as IQ, and where they meet in the middle, I guess, is that a kind of situational experience to bring on those skills?

SPEAKER_00 10:48

I think that's right, because I think the expectations of everybody involved, whether it's a company, whether it's an investor, even banks, it's different to what it was five, ten years ago. And interestingly, some of the sort of newer entrants into turnaround services or commissioning turnaround services like private equity, they have a different view altogether because I think it's hard for many P houses to admit that they need a turnaround. So it's something different. And hence we talk about the value agenda. The value agenda is much broader. How do you raise turnaround with these new investors like private equity and some of the newer funds providers, like some of the private credit funds, for example?

SPEAKER_01 11:27

So I think focusing on the situation basis, I think is really important. So there are a number of private equity houses that obviously specialise in special situations. But the reality is for any business portfolio, you are going to hit bumps in the road. So it's that kind of recognition. It's having the conversation at the right time, it's being clear about what the skill set is, and it's also demonstrating that skill set. So we do a lot of work on sharing that story. A lot of the work that we do on next generation activity is helpful to that so that you can have that sense of early intervention. And it's remembering all of this is about value creation. You're dealing with the kind of real cash crisis, or all the way up to a business that perhaps has lost its way, is coasting somewhat, but has a bit more of a time span to deal with it. It's providing the reassurance that you can bring in expertise at the right time in exactly the same way as you would if you had an IT problem, bringing the right experts at the right time, having the right conversations and being able to manage stakeholders well internally and externally.

SPEAKER_00 12:31

No, it's really interesting to hear your perspective on that because I've noticed, particularly with UK mid-market private equity, there has been an increasing maturity in the way they look at difficult situations. Certainly five, ten years ago, the initial response would be we'll change the chief executive or change the CFO or both or change the whole C-suite. And then they'll find that doing that again in six months' time. When actually, I think getting to the fundamental root cause of why a business isn't performing as you'd expect it to, that saves a lot of time and expense and allows you to sort out the problem and then have the right management team in place to head towards whatever the future is, whether that's a successful exit or whether it's uh trade sale, whatever that is. That really chimes with me what you're saying about the different views and then the different skills are required of the turnaround profession.

SPEAKER_01 13:19

Lots of my members are working in growth businesses because it's that it's the ability to be able to grow a business well. Is there's a lot of crossover with the types of skills around target operating model, how you engage with stakeholders, how you bring people with you. That that's going to be very similar at the growth edge, as alongside the kind of harder turnaround edge of things.

SPEAKER_00 13:43

That's a very good point because the turnaround market for itself is by nature cyclical, as is some of the investment in growth. And I think one of the best advice I give to some growth growing companies rapidly is try not to spend all your cash too quickly. Because so often, get an investment, what do we do? We'll hire lots of people, we'll spend money, we'll get nice new office with a pool table or whatever, and the business itself is neglected. So those same skills I think do come in really useful whether you're in a start-up high growth environment or whether you're actually in a more of a classic turnaround situation.

SPEAKER_01 14:16

I can agree more.

SPEAKER_00 14:18

So going back to what I was saying about it being a cyclical business turnaround, obviously there are the macroeconomic situation, particularly in the UK, has a big influence. With your crystal ball, what would you see the future for UK economy at the moment looking at? Because it's there are a lot of uncertainties. How does do you and the IFT see the future working?

SPEAKER_01 14:40

We're in an interesting time in that yes, we do see particular stress in particular sectors, but actually stress is across all sectors in a way that probably hasn't been true in previous periods. And we are starting to see more engagement with turnaround services as a result of that. Just to give an example, my independent members have probably been the busiest over the last 18 months or two years than they've ever been before. I think the good news is that they have been working for turnaround mandates, but they've also been working further up the decline curve. So you are seeing businesses engaging with that transformational need. I think stress is going to continue for the foreseeable because the circumstances that have led us there will continue. And as we speak, we can see world geopolitical to influence that, whether it's oil supplies, oil prices, or labour supplies that are disrupted by international situations and geopolitics is more of an effect than it's ever had in our industry previously. So we definitely see distress continuing, but we're starting to see an uptick in very positive engagement. I mentioned that most sectors are affected, but when we look at the distress that occurs across sectors, we can see construction, real estate, retail are key sectors that have continued to be affected over the past year, two years, three years. And those are the sectors where our members are particularly active. You can see the reasons why. There are issues around supply chain, availability of materials, issues around labour, issues around energy costs, issues around staffing costs. So we will continue to see that level of distress. I don't think we see immediate economic eclipses. So the positive stories is that there is an opportunity for businesses to engage on an ongoing basis and to come up with those deeper solutions. One thing I think is particularly relevant is the era of cheap money is very definitely over, which most business people I think would recognise. So, you know, we're seeing issues about availability of cash. Financial balance sheet restructuring wouldn't always be important, but actually operational turnaround and transformation becomes ever more important because that's how you fix solutions for the longer term and make sure that you take control of the situation before it takes control of you.

SPEAKER_00 17:06

I think again that chimes in very much with our experience, huh? As you say, the end of cheap money. And whilst money is not we're not back to interest rates of 10-15% as we might have had 20, 25 years ago. But businesses going for refinancing over debt that they took out, say two, three years ago. A lot of them are having a big surprise, and banks are saying, actually, you know, we're not interested in continuing to finance at the same levels we have done before and having to look for alternative lenders. How far do you think that message has got through to you mentioned certain sectors, retail hospitality being some of the obvious ones, construction being some of the obvious ones? Do you think that message is getting through to other sectors as well?

SPEAKER_01 17:46

I think it's a slow process. When we ask our members, the biggest barrier bar none to turnaround activity is the cultural and psychological resistance to turnaround activity. But once people have got over that, obviously the returns are absolutely massive. I think it's a slow process, but part of our job at the IFT is to share that you can take control sooner in a situation and the expertise help is out there.

SPEAKER_00 18:19

No, that's a great point because I'm often asked when's the right time to bring in someone for a turnaround? And often the question is that's too late. Because by the time they've actually taken their heads out of the ground, as you say, and just saying, Yeah, but I do have a problem, often a lot of opportunities have been lost already. How would you encourage business owners, investors, those who are likely to commission turnaround services to recognise the issues earlier? What sort of things should business owners be looking for?

SPEAKER_01 18:52

One of the things that our members will say is when they quite often go into the businesses that management information isn't great, but understanding what your management information is telling you is absolutely key. Understanding what's going on in your external competitors, our members will say that quite a few of the businesses that they work with haven't recognized that they're in difficulty until it's too late or until they really need external help. So cash is absolutely king. So understanding your cash position business and what your competitive position is will tell you how you are doing and whether you need to get external help. And listen, getting external help is a very, I've discovered this, this is why I came into turnaround. It's a very empowering process because you're creating certainty from uncertainty. You're dealing with somebody who has worked through that kind of situation before, been through it before. So they will say that rocket science is a rocket science to a rocket scientist. The same is true of turnaround professionals. They are used to dealing with these situations, bringing in this level of calmness, dealing with the similar stakeholders. So I would guess that understanding your competitive position, understanding your cash position is a really good way of understanding where you sit and when you need to bring in external help. If you look at the reason why people go into business, they don't go into business to manage the cash. They go into business for the widget that they wanted to make or the service that they wanted to provide. They didn't go in to be financial management professionals. Cash is king, it is a mantra that we are absolutely obsessed with at the IFT. And I it's something that we like to talk about a lot with businesses. Um it's something that's actually probably easiest to understand for most businesses, actually, because it's it's not really about accounting. It's about how much you're bringing in and when it's going out, but it's something that we need to work harder on.

SPEAKER_00 20:49

Yeah, I absolutely agree. And picking up on the point you said about turnaround professionals bringing that calm, measured approach. It's a question I often get asked. They say, Oh, have you ever seen anything as bad as this? And touch wood, I can normally say, Yes, I have, I've seen much worse. Which I suppose gives a certain kind of assurance, even if it's it's not a very positive one. Because I think most turnaround situations come down to a number of reasons, cash being the primary one, a major event has happened. Customer major customers walked away, macroeconomic politics has meant that a key export market is no longer open to you, you have to pay 10% tariffs to sell things for the US, that kind of thing. All these things are uh unexpected. Just think about it. If there's one piece of advice that you would give to any business owner, you mentioned cash, is there anything else that you would tell them to be really switched on to?

SPEAKER_01 21:47

I think it's understanding your external environment. Seeing what your competitors are doing, you mentioned a really big one, which is becoming too dependent on one customer or a group of customers. So looking at where your Risks are, and I don't risk registers are absolutely fantastic because I'm very very strong governance, but actually understanding in an everyday sense what your risks are. Unexpected things do happen, but they happen in areas where you are going to be more vulnerable. So understanding that is going to be a really good starting point.

SPEAKER_00 22:19

Now that's great advice. Great advice. As you say, governance is all well and good, but it shouldn't be at the expense of running your own business and understanding what you're good at.

SPEAKER_01 22:28

Yeah, exactly.

SPEAKER_00 22:30

So, Millie, thanks ever so much for joining us. It's been fascinating to get some insights on the Institute for Turnaround and understand what the IFT does and the sort of people and organizations that are linked to the IFT. I can say from Kingsway's behalf, we find it a very profitable relationship and it gives us all kinds of great experience and lots of learnings, as well as providing that natural forum to network with other turnaround practitioners. Thank you for joining us and look forward to seeing how the IFT progresses in the future.

SPEAKER_01 23:04

Thank you very much. Lovely joining you today.

SPEAKER_00 23:12

That was Willie Camley, Chief Executive of the Institute for Turnaround. Something Millie said that I keep coming back to.org.uk. And to talk to us here at Kingsgate, visit Kingsgate.uk.com. If you found this useful, please subscribe, leave a review, and share it with somebody who needs to hear it. See you next time for more for the value agenda.