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Delivering Difficult Decisions
Business Journal

Delivering Difficult Decisions

Sometimes, being a leader requires being the bearer of bad news

by Denise McLain and Jennifer Robison

When leaders must deliver bad news -- whether they're announcing layoffs, across-the-board salary cuts, or unpopular changes to corporate policy or strategy -- employees' first response usually isn't calm and rational; it's emotional. Those most affected by the bad news want more from their leaders than the cold hard facts. They want their leaders to communicate that they care about the employees who are affected by their decisions.

Employees expect their leaders to lead and to be accountable for their actions; they don't want them to equivocate or evade responsibility.

That's why leaders should think carefully about the emotional response of the audience when crafting their communication strategy. It's possible to deliver bad news without disengaging employees. But that, of course, requires knowing the difference between the right way and the wrong way to communicate difficult news.

The wrong way

One of the worst ways to deliver bad news to people, whether individually or in groups, is impersonally. Disseminating news by blasting out an e-mail announcing that headcount needs to be reduced, for example, can leave frontline managers and employees feeling angry, scared, resentful, and confused.

Another poor tactic is to be evasive. Employees expect their leaders to lead and to be accountable for their actions; they don't want them to equivocate or evade responsibility. The difference can be as simple as clearly stating a decision ("The executive committee has decided"; "We've lost a major client") versus hiding behind the passive voice ("A decision has been made"; "A major account was lost"). Ambiguous communications can send inconsistent messages about priorities, strategies, or standards. They can also cause the rumor mill to spin into high gear, which can compound the confusion.

The result of either approach will be loss of trust in management. And distrust can erode productivity and sap energy just when the company needs everyone to do more with less.

The right way

A better way to break unpleasant news is more difficult because it requires emotional involvement and honesty. When you must announce a tough decision, such as an unwelcome change in corporate strategy, first make sure it's actually the right decision. Take your time. And if possible, get input from the people who will be affected the most. When you're sure that you're doing the right thing, announce it in advance. Then implement your decision quickly.

When you communicate the decision, be sure to acknowledge its emotional impact. Change is hard. But leaders can support help to understand the change -- and handle its emotional fallout -- through their communication.

What you say . . .

On the opening night of a companywide conference, the CEO of a global manufacturing company in a constricting industry told his people, "Our [shareholders] are growing more and more frustrated with us. . . . [They] have made it pretty clear to us that they expect a dramatic improvement in performance. We've got one more chance."

A lot of top executives would shy away from such a straightforward statement, afraid that it would make them appear weak or frighten employees. But the truth was that shareholders were frustrated, and they were making noises about taking their money elsewhere. The CEO knew a few things that everyone else didn't know but that they needed to know. And the bottom line was that if the company was to survive, it had to change.

So the CEO told them the truth -- and instead of scaring people into paralysis, his message galvanized them. The following year, the company's earnings per share improved. The year after that, as the worldwide economy worsened and the company's earnings dipped, the company posted its highest employee engagement scores.

That's why senior executives should always be honest with employees; honesty promotes trust. If workers think their leaders are being dishonest, disingenuous, or condescending, employees' confidence in management will dissipate. Keeping promises is also crucial to maintaining trust; executives who can't keep their word won't keep workers' confidence either. It's OK for leaders to change their minds -- in fact, it's often necessary. But leaders should communicate clearly about those changes.

When communicating changes, what leaders say should be comprehensive and transparent. Transparency can throw a wrench in the rumor mill, help promote trust, and keep workers focused on a common strategy or goal. Transparent communications reinforce the feeling that "We're all in this together."

What leaders say should be hopeful. It should offer a clear vision of the future and show how leaders' decisions will create a competitive advantage. Executives should connect employees to the new business strategy; employees need reassurance that what they are enduring will eventually make them more secure and make the company healthier. And executives should never forget that when there's good news, workers need to hear it. People need a reason to hope, and they need it more than ever in troubled times. (See "Why Hope Matters Now" in the "See Also" area on this page.)

Workers can gain a psychological boost from being trusted to do their jobs, especially in difficult times.

What leaders say should be fair. Workers need to know that top management is taking actions that are in the company's best interests. Senior executives should acknowledge that painful measures present a burden, but they should also demonstrate how that burden is spread equitably across the company.

Further, leaders should know that employees are likely to have strong feelings about corporate fairness and equality. A recent Gallup Poll showed that most Americans (59%) endorse government action to limit executive pay. And earlier polling showed that three in four Americans (76%) wanted the government to take action to block or recover the bonuses paid to AIG executives after the company had received federal bailout funds. A likely reason for these reactions is frustration that some executives whose companies were near collapse were rewarded with bonuses while employees -- and taxpayers -- suffered the consequences of those leaders' poor decisions.

. . . and how you say it

If a company's recent economic news has included reports of job losses, pay cuts, and reduced market share, it's likely that employees are responding emotionally to those reports. Leaders who respond in turn with a message of trust, stability, and hope can help remaining employees manage the resulting emotional turbulence.

With that in mind, leaders should ask themselves whether their communications will meet the emotional needs of the audience. They should monitor the number of positive and negative messages they are sending to employees, and if that kind of analysis isn't their strength, they should ask colleagues for an honest assessment of their communications.

Senior executives also should remember that trust works best when it goes both ways -- and that employees are more likely to have confidence in leaders who trust them in return. Workers can gain a psychological boost from being trusted to do their jobs, especially in difficult times. Leaders who attempt to micromanage or control employees can make them feel like victims, whereas those who foster feelings of autonomy can turn workers into activators. And activators will seek ways to improve their conditions while victims just suffer them.

Leaders can also promote confidence and trust by being visible -- for example, by walking the floor and talking to people. "There's not much I can do right now," says a European division head. "But I can make sure my people know how much I appreciate what they're doing for the company."

Finally, great leaders send notes of encouragement to employees who need an assist; they send thank you notes to workers who deserve recognition. They are present for feedback sessions when their company does employee engagement surveys, and they personally respond to what they hear.

So hold the hands that need to be held, and pat the backs that need to be patted. Meanwhile, keep the faith. The world economy is cyclical -- it's been down before, and it will be up again. In the meantime, companies must keep moving forward. That's news too. And the bearers of bad news need to remember that although some grim messages are urgent, perhaps the most important news to share is that the organization cares about its people now and will continue to care well into the future.


Denise McLain is a Senior Practice Consultant at Gallup.

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