Curb Appeal — why It Doesn’t Say Anything about the Interior

IT Factory was the best performing IT company in Denmark for two years in a row

In September 2008 a company called IT Factory was named “Best IT Company of the Year” by IDG/Computerworld — for the second year in a row.

At a conference in Copenhagen with more than 500 of the top business people in Denmark present, the Award was presented and received by the CFO, as the CEO (Stein Bagger) was abroad on an important business trip.

IT Factory had demonstrated impressive growth rates and was by far the best performing IT company in Denmark. They employed 150 people and the revenue expectation for 2008 was €200M with EBIT of €40M. The company had offices in Copenhagen, Vienna, Auckland and Atlanta.

A week later the company filed for bankruptcy and the CEO, Stein Bagger disappeared. The impressive numbers were generated by fake leasing contracts that Stein Bagger had orchestrated. He later turned himself in and was sentenced to 7 years in prison. The shareholders lost everything and 150 people lost their jobs and left with a funny feeling of having worked for a fake company.

In late spring this year (2015) I had a cup of coffee with the CEO of a mid-sized software company (500 people). The CEO told me about how successful they were and how well things were going. I know that growth creates all kinds of issues, but the CEO wasn’t prepared to share any of them with me and painted a very rosy picture instead. I left the coffee meeting with an uneasy feeling.

A week later I had a cup of coffee with an old acquaintance from Spain. He had just left a position as the VP of EMEA operations with that same company and he painted the picture from his perspective. That was a very different picture showing cracks all over the place. There was nothing criminal going on, but there were certainly plenty of business challenges.

My message is: All companies have issues all the time. There is no “perfectly” running company. If someone pretends that everything is perfect then they are not telling the truth and we should be suspicious.

If something sounds too good to be true, then it probably is.
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