HOW A CEO SHOULD RESPOND IN AN INTERVIEW
By Johan Ishak
21 May 2024
CEO is a title that carries a lot of weight. It represents the organisation that the CEO is representing as well as the industry that the organisation is operating in. It also represents the alumni from which the CEO graduated from as well as the ethnic group or state from where the CEO hailed. The CEO also represents the more personalised groups such as his or her family, or the family surname itself. In a more general sense, he or she also represents the gender that the CEO belongs to. Therefore, if you appear to be like a bloody idiot, then unfortunately, it reflects badly on those various groups you are associated with in life.
One morning, while driving to work, I listened to the radio station BFM89.9. It was the Breakfast Grill session. I shall not name the CEO who was being grilled out of respect to fellow CEOs out there. However, I will share what went wrong in his replies to the questions asked by the radio DJ. So, readers, please do what is the opposite of what went wrong. Here goes.....
Q1. Why acquire assets and not lease them?
A1. Well, why do you need to lease them when you can buy?
Comments: Whaddahell? The assets in question were not any specialised assets. They were generic equipment that you can lease like computers. In addition, he even said that he still buys even when the leasing supplier provide warranty and replacement with new models when the current ones reach the end of their commercial or technical useful lives. What annoys me is that he answered the question with a question that makes him sound stupid. The Company is listed on the 2nd board of Bursa. So, what he is doing is worsening his Return on Asset (ROA) ratio.
Q2. Why not utilise assets fully?
A2. Because we want to make sure that when there are new clients, we are ready to serve.
Comments: My understanding of his business is that it requires careful planning of capital expenditure to ensure that the expansion of production is done timely in tandem with the demand growth. Simply wasting valuable funds that end up to be idle asset is just stupid. Why bother? Apart from your ROA getting worse, you'll incur unnecessary finance costs, be it debt costs or equity costs. That cash could have been used for working capital purposes. He should have tackled the question from demand-pull perspective. That would have made it intelligent.
Q3. Why do you limit your number of staff?
A3. We try to avoid the formation of unions.
Comments: Oh! My God. Whilst I do agree with his statement, you DO NOT say that in public. I hope his legal counsel tells him that that is a big No No for a listed company to say. Here we are moving towards bloody ESG and shit, this CEO goes the opposite direction.
Q4. How do you ensure that you are able to secure Government subsidy?
A4. We are lucky that we turned into profits because of the huge Government subsidy. For the next coming year, we got some hearsay that we will be getting the subsidy again.
Comments: First of all, the Company is a listed company. They are expected to strive for profits from operation, and not from Government subsidies. What is even worse is that, he uses words such as "Hearsay" of Government approval of subsidies. Furthermore, the word "Hearsay" can also lead to wrong understanding that the Company is confident to get the subsidies as they have paid certain corruption money to certain people in the Government. Not a good perception to be stamped with, I must say.
Q5. Why did you increase your CEO's salary when you are cutting other costs?
A5. I have worked so hard for the past years. Therefore, I deserve that salary.
Comments: Sounds very selfish when he had just explained earlier how he avoided unions and that no salary increment was awarded to his staff. I think he should have said something along the lines of adjustment to reflect the work description for the enhanced profile of the Company. That would have sounded better.
Q6. What is the prospect of your revenue vis-a-vis the recent financial reports?
A6. As you can see, our revenues have declined against last year. That is normal for any business. You get this ups and downs all the time.
Comments: That is not how you answer a revenue question. A CEO must always deflect the negative attack of a decline revenue by highlighting factors that can contribute to the revenue growth in the future. Even if he or she is pushed to a corner for the matter, he or she should associate the decline in revenue to uncontrollable factors (such as exchange rate, Government recent changes in tariffs, etc) as much as possible and not give room for people to form negative opinions on the sales activities that are based on controllable factors.
Q7. How do you plan to achieve a PE ratio of 19?
A7. This is a family run business. We have friends and family who will help to buy our shares when the share price goes down. That will significantly help us to maintain price, relative to the Company's earnings.
Comments: Whaddafak! It is a godamn listed Company. You should never ever make references to activities akin to non-listed companies. He had just fundamentally destroyed the credibility of the business itself in everyone's valuation of the business.
Q8. { No particular question. However, I noticed that he kept on using the word "Honestly" when ever he answers }
Comments: That seems to suggest that prior to the particular interview, he has been answering dishonestly? Or is he indicating that he has a compulsion for lying?
End of "bitchin".
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