Is Your CEO Sharing the Realities of the Organization's Journey Towards Its Dream?
Someone recently asked me what I thought about a CEO of a financially struggling organization promoting his unsubstantiated dreams of the organization's great value to all its investors. While at the same time, recent and past terminated employees were made aware on the day they were terminated that their vested interests were deemed worthless.
My quick response was That Sucks! My second response was, 'How long were you aware that the organization was financially struggling?' The follow-up question, did the CEO share the financial realities with all the shareholders, even those with phantom shares, or did the CEO's talk track lead you and the rest of the stakeholders to believe the company was financially solid?
One of the primary reasons I am not a fan of phantom shares or any promises without any accountability to reality is that it can lead to unrealistic expectations, as in many cases phantom shareholders have limited to no access to the financial realities of the organization.
If the CEO is unwilling to share the bad and ugly along with the good. Couldn't that CEO be defined as a perpetrator of false hope?
All investments are a risk! However, when a CEO willingly promotes phantom shares or other potentially valuable promises to the rank and file—especially instead of any type of monetary compensation —while knowing the company is not financially performing, I would classify that as a disingenuous and unrealistic CEO. Another description could be a fraud or charlatan.
I would suggest that no employee should be solicited to give up compensation of any kind in exchange for a promise that is backed by unrealistic, misleading, or even fraudulent information.
If the CEO is telling the truth to employees, backed by audited financials, and the employees are fully aware of all the impacts that could affect the reality of their interests, that's different, as the employees are at least aware of the risk.
The risk of complete loss in investment is obviously much greater if the following things are the organization's reality.
For example, an inability to satisfy loan commitments causing lenders to write off tens of millions in losses, the organization's liabilities being greater than the company's assets, the company's revenues declining along with profits, the company's CEO is eliminating senior executives, and not replacing them or the CEO gaslights all conversations regarding the company's financial realities.
Remember, my friends, everyone has a choice in how they risk their hard-earned income, and sometimes things go wrong. It's usually those who don't accept reality quickly enough that incur the most significant losses.
In closing, Just because your CEO is living in a fantasy doesn't mean you have to. All those true to their dreams are also true to the realities along the dream's journey. I suggest you run from those leaders who live in a perpetual unsubstantiated fantasy. At the very least, don't give up your hard-earned compensation to pay dividends to leaders who hide the realities of the dream's journey.
Ray Stasieczko - Host of The YouTube Series The End Of The Day With Ray!
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