Can you think a business into insolvency?

Insolvency Service figures show that total company insolvencies registered in England and Wales jumped by 57% year-on-year to 22,109 in 2022.

While there is no denying that conditions for businesses are currently extremely tough is it possible that at least some insolvencies have been the result of the CEOs’ mindset?

According to research published in the Harvard Business Review a CEO needs to have five essential qualities:

Foresight: critical thinking when it comes to future planning

Adaptability: the ability to adapt to changing markets and technology

Reliability: A steady hand on the controls

Teamwork: the ability to engage with the team and show them they are trusted 

Decency: essential quality to show trustworthiness in cementing relationships with shareholders, investors, employees, and the public

But what happens when the CEO is suffering from mental health issues?

According to a study in the Applied Journal of Psychology, mindsets are contagious so if the CEO is suffering from depression or anxiety it will be passed on to the rest of their team and the business will follow their lead.

In other studies this has been emphasised: “no other emotional expression can cripple a venture like depression in a CEO”.

 It affects their decision making, shifting their perspective from a reliance on data, expert input, trends, peer advice, and astute observation to using gut feelings.

A CEO who doesn’t prioritize their mental health may soon notice their company’s financials starting to reflect their mindset.

It is logical, therefore, given the infectious nature of the CEO mood described above, that without expert intervention from a qualified mental health expert it would be perfectly possible to think a business into insolvency.

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