Michael Jones loves helping people. He’s a high-profile insolvency accountant which often means dealing with bad news. Michael’s greatest joy is seeing his once-worried clients walking out the door smiling. Regularly in the media and a sought-after speaker, he is famous for his 10Ps of business success, and he’s a living example of Positivity.

Bankruptcy is a dirty word to a lot of people. For Michael, financial difficulty is the area in which he has been able to make a real difference to the lives of people facing personal bankruptcy or who find their business insolvent. Part counsellor, part stress reducer, this insolvency professional considers he’s done a good day’s work when his clients come in feeling depressed, overwhelmed and not knowing where to put their next foot – lest it take its last slide on the slippery slope beneath them – and leave with big smiles on their faces, ready to redefine the experience of a normal life.

Gambling, credit card debt and bad management are by far the three main pathways to digging oneself into the financial pits, Michael maintains. Of course, the news he delivers to his clients isn’t always good, however he has the attitude and professional tools to help people find a way out of the black hole, staying with them while on their journey back to ‘normality’ under his liquidating administration. The different drummer of insolvency, Michael is intent on being there for the people who need it most, at the time they are most vulnerable…those who are more prone to chaos and dysfunction in a chaotic and dysfunctional world!

From rural acceptance to the big smoke and rule of law, Michael is the man who will assess you, send you to ruin and help you bounce back from the brink, all in a transaction of goodwill and insolvency administration.

Michael felt somehow conflicted about his passion for science at school and his deep desire to be a chartered accountant, even if he wasn’t sure exactly what that was! The image of conservative, well-spoken, respectable men in suits had always appealed to him. Little did he know at the time, accounting often meant just adding up a lot of numbers and filling in forms. Not surprising then that his disappointment, upon entering his chosen field of accounting, was swift and substantial. Michael stumbled into his specialised area – insolvency – in the 1970s and has been at it ever since.

The referral base for Michael’s firm is the business community or, more specifically, their professional advisers. Specialising in small family businesses, the firm’s focus is helping people find an exit strategy out of financial strife. Because there are very complicated legal structures under which people operate their businesses, both in Australia and other western countries, a wholistic approach to the business’ financial situation is key.

The media often covers big, sensational corporate collapses – ABC Learning, Darrell Lea and Reed Constructions to name a few. Public interest is piqued because jobs are lost or misconduct charges are laid against directors. But small business is a significant part of the economy and the reality – and a more chilling statistic – is that 80{56e17aafef6daaed9f084c75df7cbcf80ee48fd729b916e4391cccc9c4753b85} of companies which fail have less than 20 employees and contribute to about 75,000 people being put out of jobs a year. Large companies with over 200 employees, on the other hand, lay off around 6,500. And losing a job, more than any other reason, leads to personal bankruptcy.

This is where Michael’s firm can help. There’s a range of tools to assist people suffering the strains of financial woes but Michael insists it’s really all about attitude. He consequently spends a large amount of time helping people with their emotional state and attitude. Most of his clients are usually completely in the dark and when people don’t know what’s going on everything seems much worse.

Michael brings practical tools to the equation to help clients see the steps they need to take to reduce their stress. This generally includes some negative news such as they’ll lose their house and be put under administration for a couple of years. But once they can see an outcome, it reduces their stress level and banishes upsetting, unsubstantiated scenarios they may be creating in their minds (such as going to jail).

“It’s quite common for clients to present with financial difficulties and significant health and relationship difficulties as well. Across the board, the common denominator is the fact they’re worried about money” says Michael.

Philosopher Alain de Botton wrote a book called Status Anxiety. He talks about the dangers of living in a meritocratic society and being judged by what you achieve, not that into which you are born. Ttherefore if you achieve low things, it’s your fault. This adds to the emotional stress and increase of depression in the community. Michael is there to demonstrate to his clients that there is a solution and there are several steps to getting back to a normal, happy life. Of course, this may mean closing the business but that’s an exit strategy that will relieve the stress.

Michael began in the NSW insolvency area at a time when the industry was dominated by a cartel of six official liquidators who rotated the work of the courts between them. There was pressure to break it up and allow other large firms onto the courts’ lists if their standards were deemed high enough. Michael capitalised on an opportunity to improve his standards to that required by city courts.

He found a practitioner in Wagga Wagga with extraordinarily high standards who was looking to retire, so, against conventional wisdom, Michael left Sydney for country NSW. This was where he not only learned a lot about the business, but about people too. The pace was different as was they way things were done. The people were more open to being helped. He learned a lot about debtor referral as opposed to the city focus on creditor referral – where a creditor wanting payment hires an insolvency practitioner to wind up the client and tries to extract blood from a stone.

“The practice boomed and turnover tripled in 6 months.” Michael opened up branches in other country towns and made his way back to the city after six years using the same concept. He set up shop in Bankstown and Liverpool thinking the people may have a similar outlook to those in the country given they weren’t in the middle of a fast-paced metropolis. He found, though, that information was scarce and the professional advisers didn’t have a good handle on the industry. They didn’t have a clue about guiding their clients safely through turbulent times. Michael convinced them of the value of his concept and once again business boomed.

With a branch office in the North West servicing the Parramatta and Hills area, and another at Narellan, servicing the Liverpool/Campbelltown and South West corridor, Michael still gets a lot of referrals from that part of the world. The people are parochial and want to be looked after by locals. Michael laughs about the cringe factor they feel in coming to the big city (where he now has a CBD office). “The perception is it will be too expensive, highbrow or just too hard to park,” he says.

“Bankruptcy is often shrouded by shame and those facing it tend to guard their privacy at all costs.” Michael compares it with internet porn – people do it in private. They don’t want others knowing they are in difficulty. Difficulties, particularly the personal insolvencies, are caused often by dysfunctional human behaviour. A gambling addiction is a perfect example of dysfunction.

Michael will tell you individuals aren’t as addicted as the state and federal governments, yet anyone with a gambling addiction probably wants to keep that very private too. He’s handled many high profile cases with people losing vast amounts of money to gambling. Recently a high profile corporate lawyer specialising in bankruptcy administrations lost millions of dollars. Another, a banker dealing with receiverships and corporate insolvencies, lost everything.

Michael has a social goal to make what his business does relevant and has embarked on an in perpetuity study of insolvency: how it fits into the broader community, what puts businesses into financial difficulties and how professional advisers and the business community can try to avoid those difficulties.

In a strictly regulated industry (monitored by ASIC, Institute of Chartered Accountants and other professional bodies), stepping outside strict ethical and legal criteria means registrations could be jeopardised. There have been many practitioners in the market who have done extraordinarily well financially however have been ultimately struck off for illegal or unethical practices. High ethical standards are paramount to the success and reputation of Jones Partners and their standards of compliance and efficiency are the foundations of their reputation.

The job, and indeed the industry, has made great leaps and bounds in the evolutionary stakes since Michael started in the 1970s. Back then rulebooks were wafer-thin and sketchy. The professional association didn’t exist. Today, great slabs of legislation fatten the Bankruptcy Act and Corporations law and the association runs monthly training sessions for its staff.
The early days were in an age where much of the procedural processes in industry were being invented on the hop, and Michael is proud to have been one of the trailblazers in establishing some of the processes that were later mandated. Now, it’s a slick, heavily-regulated industry with very specific procedures to follow, particularly in relation to the law. So, what Michael and his peers had to figure out in earlier times, is now very much prescribed.

From day one Michael saw the value in delegation and in hiring graduates fresh from university. Contrary to the somewhat harsh attitudes of his professional colleagues, who considered raw graduates as “knowing nothing”, Michael took a long-term view by hiring, training and mentoring them.

“Three of the five principals in the firm today are graduates we hired straight out of university,” he says.

Michael gets excited when he talks about risk. A market-based economy, he says, is the most efficient way a society gets its needs met in terms of goods and services. He demonstrates that in the following narrative about what happens in planned economies. “The former Soviet Union, a very wealthy country, very, very resource-rich, basically collapsed under its own weight of bureaucracy. If the US free- enterprise society defeated the Soviet Union in the Cold War it’s because its economy failed, nothing else. China has introduced the Bankruptcy Act to allow its inefficient bureaucracies to be wiped out, leading to China’s success.”

This all leads Michael to a climactic point: economic Darwinism. And in a free-enterprise market society, survival of the fittest is key. He’ll tell you that risk-taking is the domain of small businesses. “Big bureaucracies, big organisations, public companies aren’t good at it. They’re locked into their procedures and rules where small businesses have the freedom to have a go. It’s probably the reason why the vast majority of insolvencies are at the small business end, because that’s where the appetite for risk-taking is. But without risk-taking, without people wanting to have a go our society, our business community, our economy loses its dynamism. It becomes moribund. We don’t advance further. You have to have risk-taking in the community,” he says.

There was an alarming observation made in the Jones Partners report last year that, during the period of low economic output, there was a reduction in corporate insolvencies and a reduction in personal insolvencies. They were perplexed because prior statistics had shown a kind of cyclical pattern; a strong economy equals low insolvencies, a weak economy equals high insolvencies.

But this suddenly changed. A low economy was showing a turn down in insolvency numbers. This translated as an aversion to risk. Banks stopped lending and consumers stopped spending. Why? Because every time they turned on the news they heard about Greece, Ireland, Portugal, Spain, China’s down-turn or unemployment rising in the US. All negative news. So consumers became extremely cautious.

“Our research demonstrated that recessions are not so much caused by consumer ups and downs, but by a downturn in business investment. And this is showing up in current trends. Why? Risk aversion! It’s therefore vitally important that in any dynamic economic environment, there are entrepreneurs – people prepared to take the risk and to come up with new ideas.”

ASIC’s research had shown the reasons for insolvencies as management, cash flow, profitability, and failure to maintain proper books and records and proper accounting. Michael deduced from this that there was really just one reason, and one reason alone for businesses getting into financial difficulties – management. At large corporation level, bad management can suck out the vitality of the company, but in the small family business sector (70{56e17aafef6daaed9f084c75df7cbcf80ee48fd729b916e4391cccc9c4753b85} of the striving economy), it’s hard to separate management from ownership. And that’s critical.

He interpreted the pattern showing up across failing businesses as being pivotal around raw emotional behaviour patterns. People who had started up a business because they thought they’d be able to get in a round of golf on a Wednesday, for example, were failing. Their drivers for success were motivated by losing qualities, so Michael developed his “10 Ps of success” – Positive thinking, Preparation and Presentation are some which are included, but the first and foremost is Priorities! For Michael, that means a disciplined effort to allocate appropriate time to tasks, to break them down into small things, to write “to do lists”, and tick them off. This prevents diving from one crisis to the next.
When asked who he respects in business, Michael reveals he has derived enormous amounts of inspiration from several great entrepreneurs. TV content pioneer Reg Grundy is one of them with his impressive ability to see the future and think things through with raw intelligence and emotional stability.

Ultimately business, according to Michael’s own “Theory of Everything”, is all about time management and positive thinking. He recommends anyone thinking about going into business read the original positive thinking text written in the mid-1950s by Norman Vincent Peale, a book called The Power of Positive Thinking.

American motivators ever since have simply taken that thesis and regurgitated it their own way. “If you go into business you have to understand what positive thinking is all about and if you don’t have that understanding, at the deepest roots”, says Michael, “then you’re not going to be successful”