"CEOs should be honest. That seems obvious enough, but it turns out “be honest” is easy to say, but amazingly hard to do. Let’s look at some scenarios to understand why."
I don't really see a paradox/conflict here. All the scenarios are basically, the company isn't doing well, but saying so shows weakness. But in that case the bigger possible truth is that maybe the company is doomed and should be shut down. So it seems less a matter of telling the truth to others, and more of admitting it to yourself. If the company isn't doomed, if despite doing badly it has a path out, then that path is part of the truth you should tell employees, and if your assessment is correct they'll stay.