The Leader’s Dilemma

By Antonio Aragón

Think you can tell a visionary from a phony? 

The hard truth is visionary and delusional leaders can look alike. The core sets them apart.  

The Founders Forum Group (2025) reports that 42% of investor-funded companies collapsed in 2024 after misreading market demand. Most of them were still raising money just six months before they failed. 

To leaders, that may have looked like the right vision. To investors, it was delusion, the chasm between a unicorn and a write-off.

Sadly, for employees it was the dream job that ended in a layoff. And we’ve seen plenty of those lately.

When charisma is valued over character, and ambition over viability, it’s easy to be seduced by style and miss the lack of substance. 

So why does this matter? 

Because leaders shape lives and delusion has the potential to burn through people, resources, and trust.

I’ve seen it first hand!

A Dangerous Thin Line

NOBL (2021), puts it clearly:

“Visionary leaders see opportunities where others don’t.” Delusional leaders also see opportunities but “they either don’t exist, or the work required is unreasonable.” 

Take WeWork’s Adam Neumann who promised to ‘elevate the world’s consciousness’ through shared workplaces, or Elizabeth Holmes, who vowed to revolutionize healthcare with Theranos, costing investors over $700 million and eroding trust. 

Both raised billions and failed spectacularly.  

Bobby Green, Head of GTM and Strategy at Astrus, says that Holmes wasn’t a fraud for wanting to test blood from a single drop, it was the path she took: shortcuts, deceptions, hiding facts.

“Every company building anything new and important will have several ‘near death experiences,’ he says. It’s how they handle them, with integrity or illusion, what distinguishes vision from delusion.

Slack’s Stewart Butterfield experience offers a juicier contrast.

A failed game pivoted into a communications platform. That’s because he listened and adapted in order to build one of the world’s most successful SaaS tools.

But there is one challenging reality…

Delusion Sells

Y Combinator‘s Paul Graham notes that early-stage investors often bet on ‘founder vision’ over product traction. The dangerous thing is that faking does work to some extent.

“If you’re really good at knowing what you’re talking about, you can fool investors for maybe 1 or 2 rounds of funding.”

In that regard, Dr. Tomas Chamorro-Premuzic of Harvard Business Review (2020) adds that all the traits that charm at first, like “charisma, confidence, even narcissism,” can also drive poor performance when unchecked.

The Hype Ecosystem

Delusional leaders don’t thrive in isolation. 

Truth be told, many of these leaders and founders are being rewarded for telling seductive stories instead of solving a problem. 

They drive a wave fueled by investors chasing unicorns, yes-boards, media craving heroes, and employees torn between loyalty and logic. 

Matthew Lee of Silver Oak Ventures says he weeds out ‘fake-it-till-you-make-it’ founders by scrutinizing their track record, not their hype. Ultimately he needs to believe, “they can actually execute and not intentionally hurt people along the way.”

I asked Rita McGrath, Academic Director of Executive Education, how we can differentiate between a compelling leader with true vision and one whose charisma masks a lack of substance.

“I think Brian Chesky of Airbnb put it best,” she says, “in the early stages, you want 100 customers who absolutely love your offering (product or service) not a quest for thousands who maybe kinda could see how they might use it.”

She’s seen a ‘grow big at all costs’ approach in companies like WebVan or Pets.com, where rapid expansion outpaced stability.

“Nothing like having customers as raving fans to demonstrate that the need is real and that someone will pay for it,” she adds.

The Red Flags We Ignore

For Chamorro-Premuzic , “the moment a founder can no longer tell the difference between the story they’re selling and the reality they’re building, they’re no longer leading. They’re hallucinating.”

So how can you tell a visionary from a phony?

A worthwhile founder pivots with the facts,” says Joseph Wibe, Founder and Award-Winning Storyteller, “a delusional one takes shortcuts toward financial stepping stones, often fueled by falsified velocity.”

CBC’s Senior Correspondent Saša Petricic frames it simply: “Whether interviewing a world leader, soldier or salesperson, I always look for conviction and passion.” But this must come packaged with realistic evidence and a roadmap.  

“A promise isn’t a plan,” he says, “there has to be logic and alternatives, and ultimately proof that the solution can work.”

Is Vision Essential?

According to behavioural scientist and motivational speaker, Steve Maraboli:

“Visionary is what we call successful people who were wise enough to not listen when we called them delusional.”

From two decades in international education, cultural exchanges and EdTech, I’ve seen that in stable contexts, execution-driven leaders can deliver without grand vision. But in volatile conditions of rapid growth, vision becomes the difference between incremental progress and transformative impact.

“Genuine vision is rooted in obsession with the problem not inflated TAMs,” says Joseph Wibe, “Great founders adapt without ego and focus on the world they’re building, not the funding they think they deserve.”

For Bruce Wilson, President of Bruce Wilson Consulting, it’s about people and trust.

“A leader needs to have a clear set of goals and objectives that provide guidance,” he says “as a manager there was never a time when I did not trust my team.” In turn they trusted him to make decisions they didn’t always like or understand.

In that spirit, the following Vision–Delusion Continuum offers a practical way to frame the debate and spot where leaders might be drifting off course.

The Vision–Delusion Continuum

Stage	Description	Typical Behaviors	Risks	Examples
Pragmatic Vision	Future-focused, grounded in evidence and achievable steps.	Runs experiments, sets realistic milestones, adapts to data.	May be too cautious to disrupt an industry.	Tim Cook, Satya Nadella
Bold Vision	Ambitious and high risk, but supported by clear roadmap and expert input.	Inspires with “stretch” goals, invests heavily in R&D, actively seeks dissent.	Risk of underestimating execution challenges.	Early Steve Jobs (Apple comeback), Patagonia leadership
Visionary Edge	Pushes beyond proven models, often redefining industries.	Creates new markets, ignores naysayers, sets aggressive timelines.	Burnout, credibility strain if deadlines slip.	Elon Musk (Tesla, SpaceX), Steve Jobs (iPhone launch)
Delusional Drift	Vision becomes detached from reality; ignores critical data.	Overpromises without resources, silences dissent, alters facts to fit narrative.	Loss of trust, failed launches, reputational damage.	Elizabeth Holmes (Theranos), Adam Neumann (WeWork)
Destructive Delusion	Belief persists despite repeated, proven failure.	Doubles down after collapse, blames others, avoids accountability.	Collapse of company or mission.	Trevor Milton (Nikola), Certain failed political leaders

Delusion Is Costly

In the short term, delusional leaders raise more capital. In the long run, they destroy more value. 

I’ve been through it.

Leaders who are so obsessed with their own narrative that they twist data, silence dissent, and push teams past their limits. 

The outcome is inevitable even if it not immediate: lost capital, broken trust, and wasted years.

What can we do differently?

Make It Real

If vision can be mistaken with delusion, what sets them apart is how leaders face evidence, feedback, and failure.

For Dr. Gena Gorling (2022) the difference lies in “a person’s relationship with the truth.”

For me, it comes down to something that is hard to fake or hype.

That is integrity!

References:

• Why do so many incompetent men become leaders? (2013)
• How to work for a narcissist boss (2016) Rebecca Knight
• Why Great Leaders Are Delusional! (2017) Dov Baron
• The self-delusion problem of leadership (2017)Ted Bauer
• Why should you stop trying to be more confident (2017) Eric Barker
• Are you a delusional leader? (2018) Karen Clerici
• How to spot an incompetent leader (2020) Tomas Chamorro-Premuzic
• From delusional self-confidence to compassionate leadership (2021) Florencia Rodriguez
• Vision or delusion? (Part 1) Why ambitious builders need self-trust (2022) Dr. Gena Gorlin
• Delusional Leadership and Its Impact on Economic Development (2024) Alazar Kebede
• The Ultimate Startup Guide With Statistics (2025) Founders Forum Group

Disclaimer: The views expressed on this blog are solely those of the author and do not reflect any organization unless noted. This is an independent, unsponsored platform with full editorial freedom. Sources, both published and personal, are cited with respect and responsibility. While full objectivity is elusive, care is taken to present diverse perspectives and involve multiple voices, allowing readers to form their own conclusions. Disagreement is welcome. This space values critical inquiry, nuance, and dialogue over consensus. 

Outright disrespect is not allowed.