Delivering Bad News To Your Team

We all know that the global economy is going through one of the worst downturns in history, with dramatic impact on almost every business.  Many companies, including my own, have been significantly affected by this environment and have taken difficult actions to survive.   Frequently, these actions have a human toll, which as leaders, makes them even more challenging to administer and communicate.   While they won’t make it any easier to deliver bad news, the following six tips may help to take some of the emotion out of the communication.

1. Reiterate your business goals and metrics. You note I said “Reiterate”, not “Communicate” your goals.  Hopefully, you have created a rapport with your associates where everyone is already clear what the objectives of your business are, i.e. increasing revenues or EBITDA, growing market share, etc.  Assuming the decisions you have made and the actions you are taking are consistent with these goals, reiterating your goals sets a foundation for the decision.
2. Explain and quantify the environmental factors which led up to the decisions. Usually, most people in the business are aware when conditions are deteriorating from visible indications (fewer trucks going out the door, capacity reductions, inventory building in the warehouse, etc.) but often they might not realize just how bad it has gotten.  Quantify with some simple data and graphics which highlight the compelling magnitude of the situation.
3. Describe the various alternatives you could have selected. In most situations, you have more than one potential course of action, including the “do nothing” alternative.  Lay these out for your people and explain the potential impact each would have had on your business condition.  Make it clear that you have thoughtfully considered multiple alternatives prior to selecting the course of action you have chosen.
   
4. Explain why you selected the route you have chosen. This may entail a comparison of pros and cons of various alternatives and many times, there is no perfect answer.  Avoid the common trap of telling your people: “Due to X and Y, we have been forced to do Z . . .”  No one has forced you to do anything, you are a leader and you have made a conscious decision to take action based on developments in your environment.  Help the people understand your decision process.
5. Translate your decision into the impact on the individuals in the room. Although people are committed to the business goals, inevitably the biggest question in their minds is “What does this mean for me personally?” Frequently, employment levels may be reduced, having a dramatic impact both on those who have left the business and those who remain.  Treat all of your people fairly and with respect, be genuinely empathetic.
6. Demonstrate your commitment and that you are “all in” with making the business successful. This may take the form of taking a significant pay cut, as our entire senior leadership team has done, or giving up some other benefit which has a cost to the business.  The people need to know that you are not observing this situation from an ivory tower but that you are personally committed to helping steer the business through the storm. After the communication, back up your words with committed action.

I recommend delivering these type of communications in an open forum, all-employee meeting.  Make eye-contact, leave plenty of  breathing space in your delivery and give people a chance to ask questions.  It won’t be any easier, and they still are unlikely to like the answer to any greater degree, but hopefully you will emerge from the meeting with their confidence and respect for being a thoughtful and action oriented leader.  You are the one that can steer this boat through the storm.