The dos and don’ts of sharing bad news

Bad stuff happens.

You have to close a store, you have to downsize, it’s time for a major restructuring. And this is going to be something which shakes the confidence of your employees. So you spend some sleepless nights trying to figure out how to approach the announcement.

I’ve been on both sides of this, and have come to realize that there are some fundamental principles which can help you navigate these treacherous waters.

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First, realize that you’ve had more time to adjust to this than they have. You’ve had weeks, perhaps even months, to adapt to the new reality. Emotional journeys take time, and your employees will just be starting when you make the announcement. Think back to the day when the realization suddenly came to you, what the impact was, and then be patient with peoples’ struggles.

Second, understand that employees’ views of the situation are different than your own. You have visibility of the decline in the market and increasing red ink on the bottom line, while an employee may be more focused on the immediate loss of her job and health insurance. It’s not that they don’t care about the business – they certainly do – but it’s not their job to be constantly monitoring that larger world you live in. That’s what you’re getting paid for.

Third, there’s a different kind of impact on each person. Perhaps you see this event as yet another step in the years-long process of shutting down a business and digging out of debt. You might be tempted to think that the employee is only losing his job, and will hopefully find another soon. Certainly you have a right to be more traumatized, right?

But trauma isn’t measured in dollars. It’s about emotional impact. That’s very individualized. The exact same event can have radically different effects on people, based on things that you don’t even know about. Your challenge, while dealing with your own turmoil, will be to show your employees support, empathy, even forgiveness.

Here are some guidelines for how to make your announcement:

• Spend some time thinking through your core values. I would hope this would include fairness, understanding and being supportive. These will form the foundation for how you come across to your employees.
• Be honest and fair about the basis of your decision. If last year’s legislation made it too expensive for you to continue employing as many people, talk about that. But don’t blame something that’s not really true. This can be difficult when talking about market trends, so if you have supporting objective data, refer to that. It can comfort some people and help them realize that you haven’t suddenly gone crazy.
• Take ownership for the decision. This is especially difficult in a corporate environment, where the temptation is to blame vague groups of management for unwise choices. When you do this, you immediately abdicate your leadership role. You’ll be increasingly viewed as irrelevant and cowardly. Even if you weren’t the primary decision-maker, you are still leading the team’s adjustment to the decision.
• Be clear about what the decision is. If you have to lay off employees, then be specific about how many, and how and when people will be informed. Without clarity, people will always assume something far worse than the reality.
• Demonstrate openness, empathy and support. The moment you announce the decision, people stop hearing the words. Instead, they’re experiencing deep emotional reaction, and want to sense how you’re going to help them. From that point until things settle down again weeks later, your personal understanding and support is what will make the difference. It’s a continuing discussion that needs to take place with each and every individual.
• The “unaffected people” are still affected. Often, there are two camps: those affected, and the others. You’d like to think that focusing 99 percent of your attention on the former is the right thing to do, but in fact there may be deep and lasting wounds for your other employees. This includes survivor’s guilt, worry that they’ll be affected next time, reduction in trust, and changes to jobs. Hard as it is, you need to realize that anybody who has visibility to this event is potentially affected, perhaps much deeper than you’d expect.

Yes, you can survive traumatic events in the business. When you think it through carefully, you’ll help your employees to do the same – and they’ll respect you for doing it.

Carl Dierschow is a Small Fish Business Coach based in Fort Collins. His website is www.smallfish.us.