The bad news about good news (Editorial)

During his fraud and conspiracy trial, former WorldCom CEO Bernard Ebbers used what is being referred to as the “I know nothing” defence. Among North American executives charged with illegally bilking their firms and shareholders this seems a popular tactic. We’ll see if Ebbers’ conviction in the record-breaking $11-billion (U.S.) fraud trial, which has him facing up to 85 years in prison when sentenced, will throw cold water on the strategy.

But “I know nothing” is hardly new. Back in 2001 when Nortel’s stock price collapsed as revenues unexpectedly dropped, then CEO John Roth was criticized for ignoring the warning signs. He would later say he had stepped back from business as he prepared to hand over the reins. Insiders have said Roth never liked to hear bad news, so people avoided discussing things like unachievable forecasts.

Can CEOs with million-dollar salaries really say they aren’t involved in corporate details at this level?

Well, maybe they can. Throughout history, being the bearer of bad news has never been a sought-after job. And it holds true in today’s organizations where making your department look good is a better career strategy than passing on tales of dysfunction.

Monthly reports are common communication tools in organizations. Take a firm where supervisors report to managers who report to directors who report to assistant vice-presidents who report to senior vice-presidents who are the only people who talk to the CEO. And at each level, the employee details things the department accomplished. This report usually won’t include employees’ workplace complaints because who wants to pass all that griping up every month. So on and on the good news about how departments and teams are clicking and humming gets passed upwards until it reaches the top and the CEO can be assured everyone showed up for work that month.

Add some output and cash flow stats and everyone in accounting is happy that another month-end has closed. But is intelligence from the field making its way to key decision-makers?

Well, human nature is what it is. So executives can’t blame reports for accentuating the positive. Especially when reactions to the negative are unpleasant. When you don’t want bad news, no one wants to give you any.

If leaders want the truth they have to encourage staff to give it.

Instead of a system where monthly reports catalogue success, also ask about challenges. What occupied more of your time than you felt was worth the effort and stress? What did you hope to tackle but couldn’t find time for? Questions like these get to the heart of productivity, workplace stressors and resource allocation.

But bosses have to be supportive when these issues are brought up, rather than disapproving.

HR professionals can help to develop a culture of open corporate communications. Use words like “problem” or “challenge” instead of papering over the truth by referring to bumps on the roads as “opportunities.” Don’t downsize people. Lay them off. Sometimes when there’s bad news, it’s best to get it straight. At least you’ll be able to trust the good news when you hear it.

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