Battling the Bad-News Blues

You can’t pick up a newspaper these days without reading bad news about some company’s business. Whether it’s layoffs, poor earnings, a downturn in sales, or a deal gone sour, bad news is inevitable, especially in this economy. It’s not about if but, rather, when bad news will strike you and your company.

Believe it or not, you can prepare for the worst-case scenario, even without knowing what it will be. Dealing with an outgoing business tide is more of a management philosophy than a deliberate, reactive plan to a specific, potentially negative event.

The first inclination for many is to play things close to the vest and take a “head in the sand” approach (i.e., if we don’t talk about it, maybe it will go away).

Unfortunately, history has proven that the more a company ignores its own bad news, the harder that bad news bites the company in the rear. In turn, the company becomes more defensive and combative until the problem is compounded unnecessarily. For example, I only have to say one name to clarify my point — Bill Clinton. (OK, so he’s not a company, but the principle is the same.)

So, just in case, here are some helpful tips to cope with any rainy days in your company’s future forecast:

Control the message. Nowhere does the clichi “the best defense is a good offense” pertain more than here. The biggest problem most companies have when bad news hits is that rumors and inaccuracies dominate any discussion. The best way to keep the rumor mill at bay is to deflate rumors before they start by clearly defining the news and the parameters of the discussion surrounding it. How the news is delivered depends on what the news is.

Certainly, if it affects your customers, it’s better to advise them first before you tell anyone else. Nothing’s worse for your customers than finding out bad news from a competitor or, for that matter, from anyone other than you. That said, personal letters, phone calls, news releases, and prepared statements are all viable tools. Each case can require any combination of these techniques to appropriately communicate the message.

Tell the whole story. The natural tendency for most companies is to hold back and not give all the pertinent facts. While you don’t have to open the proverbial kimono on all of your company’s problems and secrets, you should answer all relevant questions relating to the bad news. Inquiring minds will want to know the impact of the news on your business and if whatever it is is apt to happen again.

Certainly, they will want to know if other skeletons are hanging around in your corporate closet. Tell the whole story honestly, and get it over with. Those who don’t will see the remaining tidbits dragged out one by one in what will seem like an endless parade of bad news.

Watch for mistakes. First, make sure you return calls and answer those who have inquiries. Not following up or answering with “No comment” is sure to come back to haunt you, sooner than later. It is completely appropriate to take media calls or other types of inquiries and promise to get back to those people within a reasonable period of time. Just make sure you do get back to them.

Second, don’t be defensive. It’s important to put the news in the proper context, tell your story, and move on. People will take potshots at you. But if you tell your story well and stay the course, that will pass. Don’t leave the lingering memory of a company with a thin skin.

Next, don’t try to overspin your message. People know when it’s a stretch, so don’t try too hard.

Finally, don’t talk in finalities. For example, if you just laid off employees and know there won’t be new layoffs, you should still leave yourself some room to move. Say something like, “We have no other layoffs planned at this time.” While plans at the time may be final, executives sometimes switch courses, so don’t paint yourself into a corner.

While I hope there’s nothing but good news and sunshine on your horizon, keeping these tips close by might not hurt.

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