after what we've seen over the past few months I think we finally need to admit
once and for all that these people are [ __ ] idiots I screwed up like
I'm a CEO I had a responsibility that means that I was responsible ultimately we did not
catch and fix these issues faster are you sincerely trying to save the world wow well
I'm trying to do good things yeah definitely not worried about getting sued but I'm worried
about doing something for my own benefits like I've read one but I know you can't talk about it
signed up swear to tell the truth the whole truth and nothing but the truth
the FTX bankruptcy has shed light on a lot of bad business and investing practices both within the
company and outside of it one of the biggest issues that now seems funny in hindsight was
the undue attention placed on the businesses founder and CEO Sam bankman freed or SPF as he
is better known amongst recently bankrupt crypto Bros in the lead-up to its eventual collapse SBF
arguably got more attention than the multi-billion Dollar business he ran unsophisticated Financial
commentators all the way up to the world's largest Venture Capital firms were captivated by
the fact that he wore the same sneakers as their grandparents and drove a Toyota Corolla as the
FTX story unfolds allegations are now coming into light that this geeky Persona was little more than
a carefully curated image and that Bateman freed would go as far as to intentionally act erratic
with outside investors because it furthered his image as some kind of misunderstood Visionary
genius but what was for some reason a big selling point for SPF and his doomed companies
should really be a cautionary tale for all of us Visionaries do not make good CEOs and to take it a
step further good CEOs should not be Visionaries it's easy to throw stones at the rubble of a
bankrupt company like FTX but celebrity CEOs have become a genuine problem that might be costing
us all a lot of money even if we don't directly invest into their companies so it's time to learn
how many Works to find out why knowing who the CEO of a company is could really be a bad sign
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when we were talking about Visionary CEOs whose Personal Image is inseparably linked with their
companies it's hard to look much further than Elon Musk musk is obviously a talented guy and
his mere mention of a company or a cryptocurrency can send valuation skyrocketing but that's not
a power you want your CEO to have investors in musk's Ventures have mostly done well for
themselves up until this point but that trend is starting to reverse Tesla's stock price is
down over 50 from its peak which means a lot of investors in the company are now holding on
to positions where they have lost money his drawn out acquisition of Twitter has not been going well
to say the least by almost every educated estimate he significantly overpaid for the platform because
the alternative was going to prison for stock manipulation musk use his significant stake
in Tesla as collateral for the loans he needed to take out to close the 44 billion deal which
has now put downward pressure on the electric car company that had no direct involvement in
Twitter outside of sharing the same Visionary CEO people find it much easier to get behind the idea
of a charismatic person than they do to get behind the ideas of a big Corporation and this can be
great for building hype around a company but then For Better or Worse that company becomes linked
to that person's decisions individuals who have only been told how smart they are for decades on
end are prone to making more erratic decisions than boring structured corporate management the
problem for investors is that by the time a CEO like musk has crafted themselves a Public Image as
a Visionary the stocks they represent are already overvalued and any dumb decisions they make going
forward will represent outside's downside risk to that position if a business sells itself on having
a Visionary CEO any investor in that business is putting their money behind a person as much
as they are a business and people are much less predictable than well-regulated companies musk's
ongoing Twitter Saga and some bad PR moves in the past have hurt investors in his companies but he
is a saint compared to a lot of other talented Visionary CEOs outright fraudulent companies
like FTX theranos and companies really cutting close to the line like we work would not have
been possible without charismatic figureheads distracting investors from the fact that their
business makes no sense startup Founders do need to occasionally be their own hypeman to attract
early investors and customers but there is a big difference between talking about what a business
can bring to a market and talking about a personal vision for changing the world even if businesses
do not start off with fraudulent intentions admitting failure early on is going to be
much easier for a manager to do if they have not aligned their personal identity with the success
of their business there is no way of knowing for sure but Elizabeth Holmes probably didn't
set out to start a vehicle for investment fraud she started out to build a medical technology
company when her technology didn't work the right thing to do would have been to admit the failing
and either shut down the company or try to raise more money to continue research and development
but failures and setbacks are not what you would expect of a Visionary CEO like Holmes so she took
a different route that destroyed billions of dollars and landed her in prison for 11 years
sentencing Elizabeth Holmes of theranos she more than a decade in prison member of course Holmes
was convicted about some business dealings related to this failed blood testing startup an exciting
company with boring management is going to do much better long term than a boring company with
managers that are celebrities in their own right the explosion in the number of visionary CEOs
in the past 20 years is no accident today CEOs of large companies will personally hire public
relations Consultants to polish their personal image in the media corporate ladder climbing
CEOs try not to attract too much attention they mostly want to make sure that a cursory Googling
of their name won't say anything that could affect their chances of Landing another eight-figure role
but company Founders will often take this a step further people like Holmes Newman Bateman freed
and musk work carefully to curate an image of themselves as a genius who was simply destined for
Success a fine-tuning of their Public Image goes beyond framing them as misunderstood Geniuses as
well Bezos Holmes Zuckerberg Newman Buffett The Waltons and most recently of course SBF himself
have all had articles written about the cheap cars they use to drive PR Consultants will grant access
to Media Outlets that are willing to report on these cars because it furthers their image as
a Frugal pragmatic business owner who is more interested in changing the world than they are
and surrounding themselves with luxury these same articles conveniently exclude details like the
fact that Bezos has two private jets a dozen homes around the country and a very expensive toy rocket
Hobby and Zuckerberg owns an entire Hawaiian island Buffett the king of the humble Persona also
owns a private jet and mostly gets driven around in a fleet of Suburbans and Bateman freed may
have very well driven a Corolla but he also used hundreds of millions of dollars worth of investors
money to buy Up luxury real estate all over the Bahamas for the enjoyment of himself and his
fellow FTX Executives the problem this creates for businesses is that it becomes very hard to Pivot
away from the ideas that aren't working because it can hurt the personal brand of the Visionary CEO
whereas if the company was being led by a generic corporate suit it is far less damaging for them to
change course or simply be replaced the biggest problem today with so-called Visionary CEOs is
that they normally hurt the everyday functions of the business and can ironically actually reduce
how Innovative the company is talking to me a report by the Harvard Business Review titled why
Visionary leadership fails looked at 136 managers across various levels of the corporate hierarchy
they found that managers that could be identified as Visionaries often micromanage their staff were
prone to being overly fixated on irrelevant details and quashed the free flow of ideas
amongst their peers and subordinates Visionary leadership was also found to create a culture of
despondency in the workplace amongst workers who weren't fully aligned with their Visionary CEO's
Vision if workers can't contribute their own ideas towards a project they are unlikely to put in any
more effort than the bare minimum to qualify for a promotion or to Simply avoid termination Visionary
managers were also shown to create this culture for all levels of management underneath them
if a middle manager has a personal vision for how something should be done and won't accept
anything different than the managers beneath them won't be engaged and neither will the man managers
beneath them and so on down to the bottom of the corporate ladder if that Visionary leader happens
to have the very top job then it can create this culture for the entire company a lot of companies
run by Visionary leaders have been famously terrible places to work Tesla and SpaceX have
very high staff turnover rates compared to their industry average emerging stories from
inside FTX are not painting a good picture and even Apple during its era of Steve Jobs was a
famously unpleasant place to work my camera's not turning on what's that I did slide it and let go
stop turning on here
okay
we'll let an expert seething turn it on a CEO's job is to decide on strategic directions for a
company and put the right process in place to make sure the company stays on track to achieve
those results it sounds like an easy job but it is hard and time consuming and frankly quite boring
it's much more fun to role play Tony Stark and get directly involved in the development of whatever
is going to make the next week's headlines companies grow by attracting and utilizing
Talent even if a Visionary CEO is legitimately brilliant they are never going to be as creative
or solve big problems as effectively as a good team of qualified and motivated staff but if
Visionaries really do make terrible corporate leaders then why are there so many of them
well the Harvard Business Review presents a compelling answer to this question too which is
that most people that see themselves and want themselves to be seen as Visionaries are more
likely to start companies and have the right personality to seek early stage Capital pure
sample bias means if more people in this group of people try to start a business more of them
will be successful enough to become household names even if they have a lower starting chance
of becoming successful as compared to a Founder who just wants to build a solid business in an
area where they see a good opportunity now the final mistake of visionary CEOs is that since
their personal reputation relies so heavily on the success of their company they find it
impossible to scale back operations even if it is in the best interest of their stakeholders go
and watch my video on why good companies should never last forever where I discuss this mistake
in detail a special thanks again to Helix for making it possible for everybody to keep on
learning how money works fire me please give me one good reason why I shouldn't fire you right
here on the spot I like little sales numbers God good enough I'll do anything anything