Adversity proves a manager’s ability to develop a team’s spirit, collaboration, commitment, and skill. It tests the manager’s competence, compassion, and courage.
“We must, indeed, hang together, or we will assuredly hang separately.” – B. Franklin
The catalog of Crises (alpha)
Some problems arrive out of the blue, others build slowly. Either way, good managers know and watch for the signals of big problems. It might take the fun out of management to think about what can go wrong, but these make very bad surprises:
- Acts of God
- Layoffs
- Litigation
- Losing a big customer
- Losing a big vendor
- Product problems
- Sales slump
- Scandal
Managing layoffs is a big topic deserving another post. However, in 2023, Elizabeth Spiers wrote “Layoffs by Email Show What Employers Really Think of Their Workers” for the New York Times to tell managers how not to do it.
Changes are always bad news at first
We all know that even changes for the better—even a great deal better—will feel like bad news to many people, if only for three weeks. But even temporary bad news should be anticipated with facts, honesty, empathy, and a solid plan:
- Reorganization
- Remote work policy changes
- Mergers, acquisitions, and integrations
- New software
When good news is bad news. It’s the nature of the Universe
“The Earth, in its devotion, carries with it good and evil, without exception.” – the I Ching.
As a corollary to “all change is bad news,” profitable growth—in contrast to unprofitable growth—can seem like unmitigated good news. Senior managers have the perspective and information to see into the distance, when growing profits provide opportunity for everyone. But middle managers and front-line staff (particularly if they don’t share the financial rewards) worry about the changes and the risks.
So, don’t assume everyone is happy because Net Margin is going up. Acknowledge the challenges and changes and, better still, share the gain.
Relationships and planning: The first steps are behind you
The best way to deal with bad news is to see it coming—and to be ready for when it arrives. Do you have—and do your managers have—constructive rapport with each employee? Do you have the planning discipline to scan the horizon for risks? And, perhaps most important, do you have the strength of character to respond with honesty, humility, and strength?
Rapport-building
It’s human nature to take bad news personally and to imagine the worst. Most people under-value themselves, so they’ll take bad news as reinforcement of their vulnerability. It’s safer to over-estimate people’s over-reaction to bad news. While your lawyers might caution you against sharing information, remember that the risk to morale—and the opportunity to get stronger through adversity—has a great deal of value.
Even a fifteen-minute one-on-one meeting can make all the difference in sharing bad news. At the least, give special attention and training to your middle managers, the people who will support you and reassure your employees. They should know the facts, know what to say, and know what not to say. The same briefing is critical to your board members.
Communication is as much about listening as telling. Don’t pack your individual or group meetings with what you want to say: have as much time to listen. It’s often best not to respond immediately. You can make things worse by reacting strongly to people who are only venting.
As a general point, you’re in a better position to deal with adversity if you have strong employee engagement. If you’ve been hearing it whispered, “the culture here sucks,” you’d best realize that now it’s you who are vulnerable.
Stamping out gossip and rumor
Gossip and rumors amplify and exaggerate bad news, so they rumor also make you vulnerable when hard times hit. The best and first step is not to engage in it yourself. Call it out. If someone dishes some dirt to you, ask, “What would you like me to do with that information?” If you have good plans and honest reports, the entire management team will be able to quash rumors as soon as they start.
Planning & culture
The primary purpose of a plan is to anticipate events, good and bad. The Center’s Toolkit has a toolset for strategic planning. While the centerpiece of planning in Standards-Based Management is the Goal Tree, one tool is the Trends Outline. The outline helps managers from every discipline look outward for problems and opportunities:
- Customer demographics
- Labor pool changes
- Macroeconomics
- Technology
- Regulations
- Industry concentration
Most employees don’t know how the business is doing, so it’s up to you to let them know. They don’t want to worry, so they’ll assume everything’s OK—until they hear that it’s not OK, so they’re doubly shocked. We are strong proponents for financial literacy and “open-book” management.
Executives who live with the financial data often are surprised to learn how many managers—not to mention employees—don’t really know how the statements are trending.
How to…
Keith Wandell, former CEO of Harley-Davidson, said, “Estimate the time you need to communicate a message. Double that. Then double it again, and you’ll have just gotten started.“
The best practices and efforts of customer marketing apply just as much to communicating with staff and your other audiences. You need time, good copy, a budget, a clear message restated creatively, and a communications calendar for reach and repetition.
The rules for responding to a shock are well known: be prompt, be honest, take responsibility, and take action.
Ego and humility: Display your character
We’ll assume you know how to market something, so we can turn to the biggest hurdle to authentic and effective communication of bad news: executive ego. Are you informed, honest, humble, and courageous?
Yes, your audience will take bad news personally—but so will you. It’s human nature. Even if you have to respond quickly, take time to take a breath and ask yourself honest, “Am I responsible?” Crises are complex with many causes, but if it’s mostly on you, everyone will know, and no one will forget if you try to dodge responsibility.
You can overdo self-blame. Most business owners will kill themselves to protect their employees. One 10,000-person construction firm folded because the owner just couldn’t get himself to look at the facts and complexity, at a huge personal cost. Don’t forget to take care of yourself.
The silver—no, gold—lining
“Fire is the test of gold, adversity that of strong men.” – Cicero
Nothing strengthens an organization more than getting through bad times as a team. Nothing lets you develop as a leader, and to be seen developing as a leader. COVID taught many managers just how resilient, creative, and committed their organizations were. It helped many of them see into themselves and gave them the pride, confidence, and wisdom to believe in themselves for the next bad news.
