The first of my Top 20 Leadership insights is shown on the list to the right. Bad news isn't like fine wine...it doesn't get better with time. In order for others to to understand this I need to share some fundamental beliefs. One is that bad things happen in even the best organization. People make dumb mistakes, have lapses in judgment, take unnecessary risks, violate established procedures resulting in a bad outcomes...one could make a very long list of the kinds of bad things that can happen. A well led organization isn't defined by whether or not bad things happen, but how leaders handle the bad things that do. The second point is that there is a natural human tendency to not want to reveal bad things that happen in an organization. A leader may hope the problem goes away without anyone discovering it; she may hope it's not as bad as it first looks; she may be worried that it reflects on her leadership; she may be embarrassed that an egregious mistake has happened in her organization. There are a lot of reasons leader may be reluctant to bring forward bad news, and it's always a mistake not to do so. Bad news doesn't go away, and it's it's always at least as bad as it first appears. The effective leader will bring bad news forward with the best information available at the time. commit to further investigate, and identify corrective action to prevent recurrence of the event.
Just as important is the environment the leader establishes to allow her direct reports to bring forward bad news. How the leader reacts to bad news is important to creating trust and transparency. If she encourages bad news to be brought forward and then reacts angrily or questions how the subordinate leader could have let this happen.....well, the chances of a subordinate leader willingly bringing forward bad news just went down considerably....and the chances it will be worse when it does come out just went up. No matter what my emotional reaction to a particular bad news event may have been, I always felt it important to handle it as a learning and development opportunity for the organization.
This can be especially challenging in a global organization where face to face contact is infrequent and cultural mores make it even more difficult to reveal bad news. This makes it imperative to frequently restate this principle and reinforce the learning component of the bad news lesson. An after action review among a leadership team, identifying what should have happened, what actually did happen and why, and what steps can be take to prevent recurrence is a good technique to use to turn the insights into organizational learning.