Why Smart Leaders Still Let Good Companies Die.
The hidden psychology behind business failure — and how to avoid it.
Welcome to Issue #1 of The Recovery Odds Index Newsletter, where I unpack the real reasons companies fail — and what boards, founders, and investors can do before it's too late.
After 25 years as an entrepreneur, CEO, and investor across Europe, Asia, and the U.S, I have dedicated myself to helping save failing businesses with real potential.
I've seen one painful truth repeat itself: They fail because people refuse to see the truth — until it's too late.
A Brutal Year for Danish Businesses
In 2023, 6,948 companies went bankrupt in Denmark. That's nearly 20 every day.
According to national data, over 3,000 of these were active businesses with real staff, customers, and obligations.
Based on analyses from EY, PwC, and crisis management studies, 40–60% of these failures are preventable — not with more capital, but with earlier and better decisions. That's between 480 and 900 companies that could still be alive.
Most failures aren't sudden. They are ignored.
Why "Good Leadership" Still Fails
Here's the uncomfortable part: Many of those failed companies were led by competent and experienced individuals.
So what went wrong?
Three patterns show up again and again:
Overconfidence Bias: 73% of drivers think they're above average. Leaders think the same way — especially when under pressure. They believe their experience, intuition, or leadership will carry them through. Until it doesn't.
Illusion of Control: When things go wrong, we mistake activity for progress. If we're moving fast, we must be fixing the problem, even if we haven't properly diagnosed it.
Survivorship Bias: We hear endless stories about successful turnarounds. We rarely study the failed ones, especially those that were almost saved. That creates a dangerous blind spot: "We'll be fine. Other companies came back from worse."
The Evidence Is Clear — And Still Ignored
According to McKinsey:
Companies that use structured diagnostics in turnaround situations succeed 60% of the time.
Those that don't? Just 34% succeed.
That's a 76% increase in odds — yet only 22% of companies use these tools when it matters. Why? In a crisis, diagnosis feels like a delay.
And delay feels fatal. So they act fast — and wrong.
Six Failure Points I See Again and Again
Across my work, these six blind spots kill more companies than bad markets:
Priorities: Leaders fix what's loud, not what's lethal.
P&L Performance: Numbers are bent to support narratives — not decisions.
Market Position: Leaders cling to past relevance. Customers have already moved on.
Pipeline Health: Revenue forecasts are built on hope, not evidence.
People Capability: The team that built the company isn't always the team to save it.
Power Structure: Decision-making breaks down under pressure. No one wants to admit it.
A Personal Mistake That Still Haunts Me
Early in my career, I led a company that looked healthy on paper — but revenue was stagnating.
So we went harder on marketing. Tried to cut costs. Optimized operations. None of it worked. We weren't solving the right problem — because we never diagnosed it.
The real issue? Our core value proposition had quietly become obsolete. By the time we saw it, we'd burned time and cash we couldn't recover.
That mistake still informs how I work with companies today.
The Danish SME Opportunity
Denmark has over 280,000 SMEs, making up 99.7% of all businesses.
Among these, 1,200–1,500 companies with 10 or more employees face serious challenges every year. These aren't startups. They're real companies — often profitable on paper — that quietly drift into failure.
When they collapse, the value destruction is massive. Worse, according to research, roughly half of them were salvageable.
That's where diagnostic tools matter most.
The Path Forward
Whether you're on the board, at the table, or providing funding from the side, you will face crises.
The question is whether you'll see them clearly — or react to them.
If you're curious about whether your company (or portfolio) is at risk, I've developed a structured Recovery Odds Assessment based on the six areas outlined above. It's sharp, fast, and brutal — and it comes with a full money-back guarantee.
Preventing failure is always cheaper than fixing it. You can check it out at www.turnaroundreadiness.com — or reach out directly if you'd like to test it on your company or portfolio.
Your Turn
Have you seen overconfidence or false urgency lead a company astray?
What helped — or what came too late?