With UK and Scottish insolvencies continuing to rise the importance of effective communication in resolving ailing business was singled out at the TMA UK Annual Conference.
Speaking at the event, the chairman of UK Business Recovery Services, at Pricewaterhousecoopers, Tony Lomas, said: "You need to get a significant number of people motivated to all move in a common direction to preserve the business.
"It’s a massive issue to get all the people to work with you, in any turnaround situation – the key is the employees."
Lomas, who joined PwC in 1978, cited his administrations of television rental company Boxclever and investment bank Lehman Brothers as examples of clear communication being employed.
After going into administration in 2003, Boxclever was forced to slash staff numbers from 4000 to 3000, close more than 500 shops and move its business to the internet.
It was eventually sold two years later for £171m (€200m) and Lomas explained: "That process could not have been possible if we didn’t have cooperation and a very careful plan – this workforce had not enjoyed a pay rise for three years.
Describing the ongoing Lehman Brothers administration, Lomas added: "Three years on and we still have 500 people - we were very successful in keeping a crucial, high quality core.
"We targeted staff and won their loyalty - it comes back to people at the end of the day. The staff are absolutely crucial to us achieving our goal."
The latest statistics from the Insolvency Service (IS) revealed company liquidations in England and Wales rose by 6.5% for the third quarter of 2011, compared to the same period last year.
What’s more, company liquidations have soared in Scotland – they are now 42.9% higher compared to 2010’s third quarter.
But the national organiser for the Liaison Committee for the Defence of Trade Unions, Barry Camfield insisted trade unions and employees still need to be effectively engaged during administrations.
Camfield, who was also speaking at the conference, said: "Very often in this country trade unions are still regarded as something left over from the soviet block.
"We still have this struggle about the rights of workers to be represented. They should be engaging with trade union managers, if the management team lay out what the problems are it will challenge our representatives to change their thinking."
By Andy Pearce