Tell Me the Bad News, Please
It’s the bad news that moves a company forward.
You’ve read, “Good is the enemy of great.” But did you know that success is its own enemy? Great leaders celebrate achievements with their staff, but success is history. What is celebrated has already happened. Success does not move a company forward, but bad news can.
When bad news is good
Bad news is good when it prevents the bad from becoming an emergency! Bad news is good when it exposes problems that, when fixed, make life better for employees and clients and contribute to the company’s profitability.
“When everything seems to be going against you, remember that the airplane takes off against the wind, not with it.” - Henry Ford (Founder, Ford Motor Company)
Obsolete inventory is not good news. It’s not something we’re going to celebrate. Still, now that I know about this problem, I can assemble a team to assess the situation and provide recommendations for recovering some lost revenue and recovering space for marketable inventory. That wouldn’t happen if employees were afraid to bring me bad news.
I am thankful, and a few times joyful, for the bad news employees told me.
Bad news doesn’t equate to bad employees.
Regardless of where an employee fits in an organizational chart, that person is human; they will make mistakes. Everyone makes mistakes; even I’ve been known to make a mistake or two. 😉 Employees need their organization to be a safe harbor, a work environment where bad news does not equate to bad employees.
When I was an executive at a multinational corporation, we made a small mistake that resulted in a substantial financial loss. We didn’t discover our error; our customer told us about it (ouch).
A team dug into the issue and found that a senior developer had made a small mistake, but the ramifications were enormous. This developer came to my office. He started by saying, “I’ll resign.” My first words were, “Thanks, but no thanks. Now tell me what happened.” He knew my office was a safe harbor.
Others were not as understanding, but companies run on bad news. We used this costly mistake as an opportunity. We zoomed out from this isolated issue and found opportunities to make significant improvements that reduced our risk and made us more competitive. That’s the gold hidden in bad news.
Bad news should come with a recommendation.
If my company is functioning as it should, then bad news travels up the org chart. As it progresses, each Team Lead, supervisor, and manager should investigate the problem and add their recommended remediation. Bad news without a remediation plan is just bad news. I don’t have time to research each issue.
Nearly all company owners and executives have a disease called “Iknowbest-itis.” It’s a chronic disease that can prove fatal to careers and companies.
“The task of the leader is to get their people from where they are to where they have not been.” — Henry Kissinger
Having the people closest to the mistake or problem think through and document their recommendation is a twofer. Not only do I receive a potentially useful remediation plan, but the employees with the closest affinity to the issue have thought through the problem and learned from the pain. There is great value in each of these.
Like most owners and executives, I have succeeded by repeatedly delivering valuable solutions for difficult problems. Nevertheless, a company’s capacity for growth is fundamentally constrained by its unwillingness to mentor, empower, and include. Bad news won’t have feasible remediation plans if I don’t control my “Iknowbest-itis.”
Bad news shouldn’t linger.
I have never ceased to be amazed at organizations that don’t have time to do their work correctly but find time for rework. Time is always money, either gained or lost. So, bad news is expensive; it shouldn’t linger.
There are at least three negative impacts of bad news: mood, rhythm, and expense.
Mood
Bad news ripples through the organization. People like good news; they like success; they like the taste of victory. Because bad news always equates to unplanned work, it’s crucial to get the root cause corrected quickly. The smaller the interval between bad news and successful remediation, the better it is for my company’s morale.
Rhythm
Since bad news is previously unknown information, it often shifts the workflow rhythm throughout my company. It’s like a person harmonizing with a lead singer but singing off-key. The whole song feels off. Bad news causes extra meetings, shifting timelines, and reassigning work. It’s a reflected signal.
Expense
I am a firm believer in keeping an up-to-date sensitivity spreadsheet. The formal terminology is sensitivity analysis. I can’t tell you how often sensitivity analysis has proved to be a crucial tool for me when I’m confronted with bad news because bad news always has some kind of price tag.
Why success is its own enemy
At the opening of this article, I said that success is its own enemy. Allow me to linger on this statement for a moment.
Success is, by its very nature, trailing information. Sometimes, by the time we know of a victory, its shelf life has expired. I am a proponent of celebrating notable successes, but not necessarily periodic successes. For a startup, celebrating its first profitable quarter is a must, but celebrating every profitable quarter dilutes its impact.
True story: I remember sitting in an executive meeting and discussing how to reward our employees for hitting all of their target metrics for the last quarter — this was nearly always food 😀. And during this same meeting, we all stared at a spreadsheet that told us our current quarter would be a train wreck.
Conclusion
Of course, there are exceptions to nearly everything I’ve stated. Still, most of the time, bad news contains opportunities. As leaders, our attitude towards bad news gets replicated throughout our organization. If we don’t have time to sniff out bad news continuously, we must remove the stigma attached to it.