Breaking bad news gently

It’s well known that stock markets hate a shock. Take the recent global
fallout when the Chinese government threatened to raise taxes on the Shanghai
Exchange. A classic example of a nasty bolt from the blue, which left equity
markets reeling.

But it’s not just markets that react badly to unforeseen events. Company
bosses find it equally difficult to absorb unanticipated bad news. Yet, it
remains a fact that reversals of fortune are common even in the best run
businesses. And at some point in any career it will fall to a manager to break
bad news to the boss.

It’s never going to be easy to tell a managing director that a crucial client
contract has been lost, or that a sales target has been seriously undershot.

Earning a living as a corporate insolvency practitioner, it has frequently
fallen to me to break bad news. Although I can’t say that I ever look forward to
it, I have learnt that there are ways to lessen the blow.

It won’t come as much of a surprise to learn that most people don’t like
delivering bad news. A recent Begbies Traynor survey found that almost all
managers prefer to shield their bosses from the unpleasant. Around 85% of
managers admitted that they had hidden a problem from their boss rather than
risk damaging their career. Interestingly, poor staff morale and negative
customer relations were the areas in which managers were most likely to keep the
MD in the dark.

There are definitely ways of handling sensitive issues, and learning how to
deliver bad news is integral to any successful corporate career. It may be a bit
of a cliché but the key is to manage expectations.

If you have a good relationship with your boss it’s much less difficult to
break bad news. You can gauge their mood and pick the right moment. This may
prove harder in large organisations where you may have had little chance to
build up a strong relationship.

Rules of thumb

But let’s start with the basics: rule number one is don’t let yourself be the
cause of bad news because you over promised and raised your boss’s expectations.
You may have thought you were on the brink of landing a major new piece of
business, and had let this become part of the boss’s financial projections.

Your actions may be quite understandable, given your would-be client was
sending all the right signals. But even so, without seeing a signed contract you
made the mistake of inferring it was in the bag.

It’s always better to play down the chances of success than to start
uncorking the champagne, or worse still, incurring new costs for work that
hasn’t been confirmed. Gearing up prematurely has been the death of many a
business over the years.

Of course, if you land the new contract, your boss will be pleasantly
surprised. But if you don’t, they won’t have budgeted for it and will see your
sensible caution as a sign of consummate professionalism. This is effective
expectations management.

Clear communication

Putting reporting structures in place that keep your boss in the loop are also
part of setting the right expectations. If possible, include regular sit down
meetings. In between these, sustain regular information flow with your boss,
keeping him abreast of progress.

Good communication shouldn’t be confused with over communication. If you
report everything upwards you risk losing your boss’s attention for when you
most need it. Use your discretion, and judge when your boss should be called
upon to lend strategic guidance. Most good bosses want to know that someone they
trust is dealing with the minutiae.

In a perfect world, through your effective communication the boss should have
the right expectations for all news ­ good or bad. If you have sensed a major
client relationship was slowly breaking down, your boss should have been
forewarned and would have prepared himself for the loss of business.

Even with the best planning and reporting procedures in place, there are
always occasions when a major piece of bad news surfaces from nowhere. Despite
careful risk management, if something goes catastrophically wrong it falls to
you to break this news to your boss.

During these ­ hopefully rare circumstances ­ it is best to break the news
personally. Although it can be tempting, avoid sending an email or leaving a
message with his secretary. Be bold and call a face to face meeting, but come
armed with a positive agenda and possible solutions to the problem. If you act
calmly and without panic, this will create a good impression and allow your boss
the thinking space to decide the best course of action. Avoid at all costs
landing your boss with a thumping great problem. Be part of the solution.

A reasonable boss will recognise that you share his concern for the company
and are taking your fair share of responsibility. Offer your commitment and hard
work, and let them know that you will personally strive to get things back on
track. It’s my experience that being prepared to shoulder responsibility in a
time of crisis can actually enhance a career.

Most frequent lies told to bosses

? Sickness – undoubted king of the porkies is staff pulling a ‘sickie’

? Expenses – employees fiddling the petrol or entertainment budgets or using
company property for personal use

? Personal life – lying at work about drinking, an office romance or gambling

? Shirking responsibility – work not completed on time or to standard but the
blame is directed at someone else

? Fraud – embezzling the company and lying to the boss to hide their tracks

?Morale – line managers not letting bosses know when there are serious staff
morale issues to save their own necks

? Customer relations – managers not reporting poor feedback from customers

? Product development – creating an over-optimistic view of progress to keep
the boss happy, but knowing this is not the reality

Mark Fry is south east managing partner at business
rescue specialists Begbies Traynor