June 1, 2023
Don’t Make Bad News Worse: How Executives Should Communicate Tough Decisions to Stakeholders
As your professional services firm continues to navigate today’s uncertain economy, it may become necessary to adjust staffing levels and/or cut expenses in other ways. And though these actions are intended to position your firm for long-term success, they can weaken your business if not done thoughtfully and with empathy for your audience.
Take MillerKnoll CEO Andi Owen as a cautionary tale. In April, she urged employees to “leave pity city” in response to complaints that they would not receive bonuses. In her video message, Owen starts off by encouraging employees to “focus on the things we can control.” But as she continues, her thinly veiled frustration starts to seep through. And before long, she raises her voice, wags her finger, and sarcastically scolds her team, saying:
Don’t ask about ‘What are we going to do if we don’t get a bonus?’ Get the damn 26 million dollars! Spend your time and your effort thinking about the $26 million we need and not thinking about what you’re going to do if you don’t get a bonus. Alright? Can I get some commitment for that? I’d appreciate that. I had an old boss who said to me one time, ‘You can visit pity city, but you can’t live there.’ So people? Leave pity city; let’s get it done. Thank you. Have a great day.
She ends the video by making hand motions depicting an explosion, as if she’s just delivered a mind-blowing, enlightening truth bomb. But the biggest hit she delivered was to her own reputation.
Here’s the actual truth bomb: Empathy for your audience is fundamental to effective communication. And as a leader, you can’t afford to alienate your audience by delivering hard truths the wrong way.
The Business Impact of Empathetic Communication
It’s never easy to share difficult news about things like staff reductions, bonus/salary freezes, and budget cuts. However, communicating challenging circumstances skillfully is an excellent way to establish your firm’s authority and build trust with your audience.
- Protect your firm’s reputation with internal stakeholders and the public
- Limit the amount of time bad news spends in the news cycle
- Reassure stakeholders that you know what it takes for your firm to weather the storm and come out on top
- Reinforce your brand and underscore your organizational values
Even if your firm is in good financial shape at the moment, you’ll most likely need to communicate difficult news at some point. It’s just part of running a business. And since the best way to manage a PR crisis is to avoid creating one in the first place, it’s wise to start working on your playbook now.
5 Elements of a “Hard Times” Communications Playbook
Your firm’s financial health must guide your decision-making. But your stakeholders’ needs and expectations should be the compass that directs your communication plan. Incorporating the following five elements into your comms strategy will help you make the best of otherwise undesirable situations.
1. Exhibit Compassion
Every decision you make about your business impacts your people in some way. So when you’re communicating news about layoffs, salary freezes/reductions, and other cost-cutting measures, don’t underestimate the human toll the news will take.
Your employees may ask you difficult questions, put you on the spot, and criticize your leadership in response to hard news. Treat them with dignity anyway. You can’t walk in their shoes, but you can remain empathetic and expressgenuine concern for their welfare.
2. Time the Announcement Carefully
You should always share bad news with employees who are directly impacted before you announce it to everyone else. However, you should also know who your secondary and tertiary audiences are and be ready to cascade your messages to them quickly.
Bear in mind, anything you say internally has the potential to be shared externally. So don’t begin communicating with employees until you’ve put together a plan for responding to questions and concerns from public stakeholders and the media.
3. Use the Right Channels to Communicate to Each Audience
It’s also important to think about how you will communicate difficult messages. Should you send an email? Schedule a video conference? Hold a town hall meeting? Personally speak to employees in small groups or one-on-one?
There’s not necessarily a right or wrong answer here. But in general, you should do what feels most authentic to your firm’s culture and you shouldn’t simply take the easy way out.
Firing 900 employees over Zoom won’t win you any goodwill. Again, keep empathy at the forefront when choosing how you’ll deliver the news.
4. Be Blunt, But Kind
This might seem like counterintuitive advice. But when it comes to delivering hard truths, it’s ok to be blunt as long as the message is anchored in genuine kindness.
In fact, it’s often better to deliver the truth in a straightforward manner rather than try to soften bad news or minimize its impact. After all, economic uncertainty causes nearly everyone to feel higher levels of fear and paranoia. So sometimes the kindest thing you can do is remove all uncertainty from the equation.
Don’t beat around the bush or use vague, confusing language. Instead, be transparent and direct. Let your employees know exactly what’s happening and why. Share the business case for the decisions you’re making. And give as many details as you can about what will happen next.
5. Reassure Your Stakeholders That the Future is Bright
Finally, provide your team with a clear idea of where your firm is headed so you can rally them around a shared set of goals and objectives. This is an opportunity to sharpen your value proposition, streamline operations, and align your people for the path forward.
Your stakeholders need to know that you’re making decisions based on what’s best for the company and, ultimately, what’s best for them, too. To that end, don’t share bad news without also painting a picture of a bright future you can all believe in and work toward.
Communicate Effectively to Guide Your Firm Through Challenging Times
In decades past, CEOs and other executive leaders may have had more freedom to communicate bad news in a top-down, authoritarian way. The rules were different, and previous generations of stakeholders and employees were more willing to accept a “this is the way it is” approach to communication.
Whether you accept it or not, that style simply doesn’t cut it anymore. And if you slip into old-school patterns of communication, you can be sure it will come back to haunt you.
Leading your firm through choppy waters starts by winning the trust of your people. And that, of course, begins with communicating effectively in good times and in bad. So if you need help evolving your executive communications playbook? Let’s talk.