I had a major learning experience this week.

And I want to share it with you so you can learn, and avoid making the same mistake.

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Now back to my story -

I'm going to be a bit cryptic here because I want to protect identities. But I'm going to give you enough information to capture the learning.

Last week we learned that a meaningful recurring expense was not being captured in the P&L of one of our businesses.

As soon as my accountant caught the mistake I asked one of our finance people to walk the GM (General Manager) of the business through this change.

It was going to be a tough hit to that business.

A week later I checked with the same finance person about the task I had assigned

me: "did you tell the GM about this expense?"

finance person: "no I didn't. I don't think their business can handle the expense".

...

Here's what I did next..

I asked the finance person to call the GM and bring them in the room with us so I could give the news immediately.

The GM came in the room and I said:

"I have some bad news to share. There is a large expense missing in your P&L, and here is your updated P&L. It's not a pretty picture"

What happened next?

The GM immediately had good ideas on how to improve the margin and make this issue "OK".

I understand why the finance person did not tell the GM this bad news.

I have a lot of practice giving bad news.

Most people are scared of giving bad news. I know many of you reading this are sitting on bad news that you're hiding from a partner, your parents, or a co-worker.

So here's my secret to you. Bad news will set you free.

You have to go through life assuming you're working with capable adults.

Capable adults can work together to solve any problem.

But they need all the facts.

By hiding information from someone you think you are protecting them. But you're not.

You are setting yourself for much more pain later on.

Bad news always comes out. It's just a matter of when.

Imagine your friend is riding a bicycle.

They're having so much fun. You've never seen them laughing so much. But there's a cliff up ahead.

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Do you yell? spoil their fun and ruin their day? Or do you let them keep cycling and hope they don't fall off the cliff?

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How to tell people bad news

1 - immediately, as soon as you have the facts. Don't wait until the next meeting or next week. Notice how I asked the finance person to call the GM into the room immediately.

2- don't soften the news. don't start with comments like "things are going well but..." or "I'm sure we can pull out of this but...". Start the meeting with "I have some bad news to share, and I wanted to share it with you immediately"

3- set clear next steps. You want the bad news to kick off a chain reaction. Don't just let it sit with the person. Suggest a next step for example: "I want us both to think about places we can increase margin, and show up Monday at 2pm with options to discuss.

As you saw above the GM did not panic with the news. They immediately started to suggest collaborative solutions.

If they panicked and reacted negatively that is a good indicator for you that they are not the right leader for your company.

If you're sitting on some bad news, pick up the phone and talk about it. It will make you feel lighter. And it's the first step towards healing.

Hope this helps.

Have a great week,

Sieva

ps: what do Galapagos flightless Cormorants have to do with a great business? You can read about it here.