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In May 2017, I sat as a co-facilitator in a bank strategy review workshop – the bank’s third such workshop since April 2016. The bank was going through hard times after suffering panic withdrawals the previous year upon the collapse of Chase Bank. The Chief Executive was vocal and sounded very clear about the way the bank should go – mobilizing wholesale and short-term fixed deposits to fund long-term lending. I was not convinced but as a consultant, I had to express your reservations wisely. During the tea break, I side chatted the lead facilitator and expressed my reservations. My main concern was the fact that the CEO was advocating for the same strategy that got them where they were. We agreed to side chat the CEO during one of the breakout sessions.

When we approached the CEO, he was categorical that he had hired us so that we can convince his management team to see sense in his vision, not to bring other ideas. He also politely let us know that everyone else in that room had only 2 options namely run with the CEO’s vision or leave. During the deliberations, we could however clearly see that the majority were also not convinced.

Later that evening, after the CEO had bulldozed his ideas, the lead consultant and myself met the CEO and the Head of Finance who also served as the de facto Deputy CEO. They both explained to us that they were not keen on taking ideas from the rest of the management team since the rest were just employees while the two were indeed shareholders. They stated that the others could leave any time but the two of them would go nowhere. In the words of the Head of Finance, the other managers were like current assets while the two were akin to fixed assets – “we are part of the balance sheet” he stated with a broad smile.

Fast forward to 2023, neither the CEO nor the Head of Finance are with the bank while at least 2 of the other senior managers are still with the bank. Though the story behind the exit of the CEO and his Head of Finance is long, it all revolved around strategy implementation and unethical conduct. While the bank’s financial position continued to deteriorate due to poor strategic choices, cases of insider lending led to the board and the regulator easing out some of the top managers amongst them the CEO and the Head of Finance.

The experience with the bank’s executives reminds me of my own journey in employment though from a different perspective. On 15th July 1998, when I first reported for my first job – secured after the second job interview, – I was elated since I had received the offer of a “permanent and pensionable” job subject to a 3 months’ probationary period. I was worried when I did not receive the confirmation letter on time. The fear of not being confirmed and the fact that I had witnessed 2 colleagues being terminated from employment led me into looking for another “more secure” job, which I got in January 1999. With the second job, I received my confirmation letter within the 7th month. I was happy and did not look for another job within the next 4 years.

During the last 24 plus years, I have interacted with people who pride themselves in holding “permanent and pensionable” jobs as well as those who feel insecure since they are on contract. In addition, I have met business owners who feel that they are 100% secure and in fact look down upon employed persons whom they perceive as having less secure sources of income. In addition, I have also come across numerous people who are depressed since they are nearing the age of retirement from or have prematurely lost their “permanent and pensionable” jobs.

Majority of the said business owners have a false impression that since no one can terminate their self-employment, they are immune from joblessness. On the other hand, persons in employment ignore an important clause in their employment letters namely the one that states that either party can terminate the contract upon giving a number of days or months’ notice or making a payment in lieu of the notice. In addition, they ignore the clause which states that the employee will retire upon attaining a particular age. Lastly, the reality that the organizations can close shop is ignored by both business persons and employees.

The fallacy named permanent has led many into failing to take risk mitigations measure. Employed persons fail to commence preparation for retirement in time while business owners fail to initiate risk mitigation measures. People in both groups also fail to invest with a view to creating passive income. They also do not develop secondary careers or occupations that they can revert to in the event that they lose their primary occupation. Lastly, the fallacy leads to the tragedy of wasted talent especially amongst employed persons – the topic I will discuss next week.

The writer, Dr. Weru Mwangi is the CEO & Lead Consultant at Ultimate Management Solutions, a Training and Consulting firm specializing in Finance, Governance, Strategy, Risk Management and Leadership Development.  He can be contacted on weru@umslgroup.com  

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