It is a sunny Friday afternoon. We are sitting in an elegant conference room in an Aarhus penthouse overlooking the iconic city hall tower. Had it been any other Friday we would have been out soaking up the sun, looking forward to the weekend. But this is not an ordinary day.

The attourney pours the coffee and starts outlining the case. The atmosphere is charged. The ownership agreement signed between the company’s two owners is flawed, leaving only two options: 1) agree or 2) file for bankruptcy. And the two are in no way agreeing. The trust is gone and communication filters exclusively through their legal representation and well… me. My job as a volunteer adviser in Early Warning is to try and support the owners in reaching common ground, so the company and its 16 jobs are saved. Today’s meeting is between the founder of the company and his attourney.

Two hours later the meeting is over, and we walk slowly towards the parking lot by the concert hall, contemplating. We talk quietly. Analyse and go over the details of the meeting and halt a couple of times as to stress a point. It is summer in Aarhus, and the girls are dressing lighty. But we don’t notice a thing. It is clear, that he is realising how it might be all over soon. The company he spent 35 years building, where his wife works, might very well shut down. What is to become of his employees? What is to become of him? What will the newspapers say when they find out he is a failure?  Apologetically he clears his throat as his eyes are tearing up – not the kind of man who complains or feels sorry for himself.  The kind of man who fights, comes up with solutions, deliver results. Or is it ’was’? Right now his life feels like it could cave in any minute. Everything he believed in seems unsure, and he has no idea what to do.

He is a man in a free fall.
He is also one of the 5.000 company owners who by way of Early Warning Denmark regained his footing.

My life as a volunteer advisor in Early Warning
By Johnny Heinmann
Over the past five years as a volunteer in Early Warning I have worked with more than 25 companies in distress. A rewarding and educational time with great experiences and people – both in the crisis-stricken companies and the network surrounding Early Warning.

The company described above is one of the 25, and how that story ends, I will come back to.

When I tell people I am a volunteer advisor in Early Warning Denmark, working pro bono, the question almost always comes up: why do you do it? At first the question surprised me, seen as Denmark is the country of associations, where it is common for volunteer coaches to teach our kids soccer or swimming, be visitors for lonely elderly people and knock on doors for charities.

Helping each other out feels natural, and it is a humane quality, I cherish - even if I think both I and the kids are better off with me opting out of volunteering as soccer coach – that would have been a disaster! Luckily we are all different, and we have to find out for ourselves what is meaningful to get involved in.

Early Warning is about saving companies and saving jobs, but for me it is first and foremost about people who deserve a chance to succeed. Oftentimes they are people who run great personal risk in an attempt to create growth and jobs, on which we all rely. Oftentimes it is not only hands and feet on the boilerplate, but families and children.
The capital pension is withdrawn, the house is mortgaged, the overdraft is overdraft and behind that stands a family in distress, deeply moved by the situation, trying to keep a normal life together. It is about real people and their survival. And of course they should have a helping hand when they need it the most.

That said, the job as a volunteer advisor is deeply rewarding on a personal level, and it is a gift to be part of the 100 persons strong corps of experienced business people and coordinators who are passionate about our mission.

Companies are all different – also when in distress
In my experience, Early Warning processes differ a lot in both scope and complexity and with that also in terms of effort and time consumption. An Early Warning process is not a fixed entity, but malleable.

Some processes comprise relatively simple moves whiches easily amend an unwanted state, reorganise activities and see the company off on a new sustainable path. Other processes are heavy and complex with layers to peel back one by one like an onion, each layer revealing a new set of challenges to assess and handle.

Companies also represent a great diversity in wealth and potential, so from a societal standpoint as a volunteer it matters where you spend your time. In the end it is not all company owners who are fit to run a business, just as there are businesses that are redundant.

What matters in an Early Warning process?
Impartial research proves that Early Warning not just saves companies and jobs, but also saves society  many millions in reduced tax losses. Simply because companies being led through the process either 1) survive and pay their taxes or 2) dismantle sooner and more leaniently with smaller losses.
But what decides whether an Early Warning process is a success? From where I stand several conditions are at play.

  1. We look out for the owner-manager’s interests 100%
    The volunteer is there exclusively to work in the interest of the owner-manager, impartially and confidentially – a strong foundation for the collaboration where decisive critical and often swift decisions must be made.

    Good chemistry and a common understanding between company owner and volunteer of the task at hand is a premis, but good chemistry is not enough. The volunteer also needs to possess the right competencies for the job.
    It can be a lonely journey to be the owner of a company in distress. It is difficult to make rational decisions, when you lost the overview in a daily fight for survival. The volunteer offers a valuable sober new look at the challenges the company has - without emotional charge and reproach. The cards have been dealt when the volunteer enters the case - cards that must be played to the best possible advantage for the company owner.
  2. Early intervention increases survival chances
    As a rule the later the company raises the flag the more limited the options for rescue. And sometimes unfortunately help comes too late. This stresses the importance of encouraging companies in distress to come forward as early as possible in a crisis situation.
  3. Concise analysis of (actual) problems and possible solutions
    It is critical that the volunteer early on gets a clear picture of threats and options. What have been attempted and with which results? Which resources are available and to what extent are they mapped out? Which scenarios are realistic and which consequences do they entail?
    Oftentimes it is a race against time. Solutions must be identified and decisions made, but they have to be right and adequate. If there is one thing there is no time or money for, it is new mistakes.
  4. Where is the company on its life cycle?
    Challenges that are a natural part of the early stage of a company’s life cycle such as illiquidity, inefficiency, poor organisation and rookie mistakes, are no longer natural when the company reaches a certain age and maturity. It does make a difference whether a crises arise while a company is on its way up, or while it is in decline. Bureaucratic, outdated companies in the last life stage are also illiquid, inefficient, poorly managed and make stupid mistakes.
  5. Prepare the company owner for a reorganisation once the crisis is averted
    Once a crisis is averted, the company owner must take precautions not to repeat the same mistakes. If this step is left out, the company will relapse. To put it differently: if poor lifestyle choices has left you with heart decease, you can get a transplant. But if you subsequently relapse to your old ways, you live on borrowed time anyway.

Not all processes develop as expected or as one could wish
Sometimes you get off on the wrong foot, and sometimes physical or mental blocks get in the way of a fruitful collaboration. Here some examples from my experience:

  1. Following a match meeting, which both I and the coordinator felt went well, the company owner disappeared. She vanished and did not answer phone calls or emails.
  2. A small company owned by to men faced challenges with the order intake. Together we created a structure around booking sales meetings with potential clients. The day before the launch however, I received a short email stating that they did not wish to continue the collaboration. It had nothing to do with me (they agreed with my suggestions), but one of them developed anxiety at the mere thought of having to sell.
  3. The company owner turned out to be a pathological gambler. He gambled and lost – money he earned and money he borrowed – as soon as they hit his account. He claimed the bank was to blame for his problems and stopped answering his phone, not even when clients called.
  4. In the midst of a complicated turnaround of a company with 45 employees, the company owner had a cardiac arrest, 40 years old and the father of 2 small children. (Today he is doing well and his company thrives).

What happens when the process is over?

I am still in regular contact with some of the company owners I have worked with – such as the company owner who suffered a heart attack. It seems like most natural thing in the world to keep examining challenges with a person you have been close with, and who helped you through rough times. But in the long run it is not viable, in part because contact might be too sporadic, in part because Early Warning is meant for companies in distress.

Ideally companies that have been through a turnaround and reorganisation should replace or establish a board or an advisory board able to support the company owner to further develop and grow the business.

Concluding remarks on crisis
Crisis is an integral part of life – for companies and for people. It will hurt, change the state of things, introduce new rules of the game that you might not appreciate. They will come at an inconvenient time and might feel incredibly unfair. We might be able to take some precautions, but one takeaway from a crisis should hopefully be to develop our capacity to tolerate and handle the changes and make something of them, when we regained our footing.

Crisis is an opportunity to review activities and strategies and decide whether time and effort is spent wisely: Are we still doing the right thing, and are we doing it right? What worked yesterday, will it work tomorrow, or do we need to rework it? A platform on fire is a welcome opportunity to see through change that will leave the business more agile and strengthen its competitive edge.

People who have suffered a personal crisis will often tell you how the experience has made them stronger, better at prioritising and making sound choices. Life’s challenges have come into perspective, revealing some issues that might have seemed daunting before, which now seem insignificant. Another frequent observation is how connections with loved ones flourish and are more appreciated, indicating that crisis push us to seek out what matters to us in life. Crisis move people, and time and time again it turns out to be a good thing – for the individual and the surrounding community.

Getting back to the story I started off with:
With the help of the bank interveening – at the very last minute – an agreement was reached between the two owners, which meant that the founder could reclaim 100% ownership of the company. Price and terms came in at the approximate result negotiated in place with the help of Early Warning four months before. The latest result for 2016 shows a profit before tax of 400.000 DKK and a positive net capital of 1.5 million DKK. There are still 16 employees.

CV for Johnny Heinmann (please connect):

Recommended litterature
As a volunteer adviser, these three books about company management and psychology have in each their own way been great sources of inspiration.

Ichak Adizes ”Virksomhedens kredsløb – diagnose og terapi” (Børsens forlag)
How To Solve The Mismanagement Crisis: Diagnosis and Treatment Of Management Problems

Daniel Kahneman, Thinking Fast and Slow (2011)
Drawing on decades of research in psychology that resulted in a Nobel Prize in Economic Sciences, Daniel Kahneman takes readers on an exploration of what influences thought example by example, sometimes with unlikely word pairs like "vomit and banana." System 1 and System 2, the fast and slow types of thinking, become characters that illustrate the psychology behind things we think we understand but really don't, such as intuition. Kahneman's transparent and careful treatment of his subject has the potential to change how we think, not just about thinking, but about how we live our lives.

Thinking, Fast and Slow gives deep--and sometimes frightening--insight about what goes on inside our heads: the psychological basis for reactions, judgments, recognition, choices, conclusions, and much more.

Charlotte Langkilde: Bedraget – sagen om Nordisk Fjer
A unique and insightful story about a phychopath’s rise to the pinnacle of Danish business life

Søren Kierkegaard:
If One Is Truly to Succeed in Leading a Person to a Specific Place, One Must First and Foremost Take Care to Find Him Where He is and Begin There.
This is the secret in the entire art of helping.
Anyone who cannot do this is himself under a delusion if he thinks he is able to help someone else. In order truly to help someone else, I must understand more than he–but certainly first and foremost understand what he understands.
If I do not do that, then my greater understanding does not help him at all. If I nevertheless want to assert my greater understanding, then it is because I am vain or proud, then basically instead of benefiting him I really want to be admired by him.
But all true helping begins with a humbling.
The helper must first humble himself under the person he wants to help and thereby understand that to help is not to dominate but to serve, that to help is a not to be the most dominating but the most patient, that to help is a willingness for the time being to put up with being in the wrong and not understanding what the other understands.

CV Jørgensen:

Henry Ford:
If I had asked people what they wanted, they would have said faster horses