There's been a lot of bad news in business lately. And almost all of it is a result of leaders who ignore bad news — until it turns into worse news. It turns out that what you don't know — and don't even want to know — can and will hurt you. Ask the folks who have worked for Enron, Andersen, Global Crossing, Merrill Lynch, Tyco, ImClone, the FBI, the CIA, the Catholic Church . . . you get the idea. What exactly is it about bad news that makes leaders want to ignore it? "There's a bias for optimism in humans and in organizations," says Chip Heath, a professor at Stanford Business School who studies how bad news circulates. "Individuals don't ever go looking for bad news, and we don't like telling it to others. So bad news is unlikely to get to the people who can actually do something about it."
Here are seven tips on getting bad news — and getting it in time to do something about it.
1. Dead people don't walk through open doors. Sure, you've got that oft-cited "open-door policy." It's just that nobody ever dares take you up on it. Want to know why not? "People need to feel that they can challenge you, tell you something you might not like to hear, and that you won't snap at them," says Michael Roberto, a professor at Harvard Business School. "Shoot the messenger one time, and it sends a horrendous message to everyone else."
2. Bad news travels in packs. If any bad news does reach you, assume that it's part of a pattern, not just one data point. There's more, and it's probably worse.
3. You must haf your vays of finding sings out. Some people call it recruiting a network of spies; others just recognize the need for frontline contacts. The simple fact of organizational life is that people who don't report to you directly are less likely to be intimidated about telling you what's really going on. Make your own contacts without going through channels.
4. Join your own organization. You really want to know what's going on out there? Try spending time outside your office, hefting boxes at the loading dock or taking calls in the call center. And once you're there, try asking some tough questions. You want the truth? Show that you can handle the truth.
5. Can the canned presentations. At one of your regular status-report meetings, ask a manager to deliver a presentation without using the prepackaged PowerPoint. "PowerPoint is the most filtered, packaged, and sanitized way to present data that you could imagine," Harvard's Roberto says. To go behind the massaged numbers, ask to see the raw data, or demand an entirely different set of metrics.
6. Make bad news legit. As a part of every analysis, assign a worst-case-scenario team. That way, bringing up bad news is part of the drill. "The Catholic Church used to have a position of devil's advocate. That person would review all of the individuals who were proposed as saints and try to spot flaws in the arguments for sainthood," says Roberto. "They got rid of it in 1983 — and look what happened there."
7. Do something. Okay, you've shown your troops that they can bring you bad news safely. Now what? "People won't come forward if they think that whatever they tell you about will just languish," says Marshall Colt, a psychologist and an executive coach based in Denver. Well, what are you waiting for?
Sidebar: How to Be a Good Bearer of Bad News
Nothing's tougher than confronting your boss with a bombshell: A project is way over cost or off schedule, or a key part of the business seems to be doctoring the data. You want to give the boss the heads up — without getting your head handed to you. Fast Company's panel of experts has this advice.
Make it real. "Assemble real data and evidence as if you were preparing for a court case," says Harvard Business School professor Michael Roberto. "You don't want it to seem like you're spouting personal opinions."
Keep it real. Don't exaggerate the situation just for effect. Hyperbole only gives your boss an excuse to dismiss you as overly dramatic.
Build coalitions. "Your boss will be much more apt to listen if you have a group of colleagues who share your views about what's going wrong," says Roberto. "Even better is if you have suppliers, business partners, or customers who will corroborate the case you're making."
Don't point fingers. "You don't want to say, 'These guys screwed up,' " says Stanford Business School professor Chip Heath. It's better to take the "We have a problem" approach.
Propose a solution. Once your boss has heard the news, it's time to solve the problem. "Be ready to discuss what you're prepared to do to fix the situation, not what you think others ought to do," says Deborah Rossouw, managing partner at the Essential LifeSkills Company. "Suggesting workable solutions builds your reputation as a person of action, not a complainer."
A version of this article appeared in the September 2002 issue of Fast Company magazine.