The scene was a lavish business function, the type we’re seeing less and less of these days. Asked by an earnest professor at a prestigious business school what sort of unorthodox job skills he would wish on today’s generation of MBAs, the CEO — and the party’s host — thought a moment before flashing a wry grin. “They don’t teach you how to be the bearer of bad tidings in business school,” he said. “And I suppose all of us have learned a bit about that this year.”

The professor looked around him at the spectacle of ice sculptures, flowing champagne, and a jazz band featuring a performance by a singer with a recent hit CD. “Surely there can’t be all that much bad news for your company if you’re capable of throwing a bash like this?”

The CEO nodded, as if in agreement, and slipped away — but not before a parting word. “I’m glad you think so,” he said, “since that is one point of this party.”

Making information your ally

As I write this, CEOs are indeed getting plenty of experience with divulging less-than-wonderful news. The media, as it usually dose, has been scoring executives on their performance — without much consistency.

The lavish company party was applauded in the next day’s society columns, criticized in the business pages the following week (as an example of budget-be-damned hubris), and grudgingly admired by the company’s chief rival a month later. It seems that there was, indeed, some bad news bubbling its way to the surface, but although the competition had heard rumors, they hesitated to act upon them, in part because the company projected such confidence. A chance to take away market share was lost.

Now, there are all sorts of degrees and categories of bad tidings, which makes generalization hazardous. There are distinct differences with what you can and can’t do, legally, depending on whether your company is public or private. No matter what your situation, what we can say is this: You need to make information your ally.

How? You have to see information, even if it’s negative, as possessing energy that can drive behavior and opinion. Often that energy can be diverted or blunted; sometimes it can be harnessed. An example of the former is what the CEO at the party did: Putting on a brave front. An instance of the latter is how William Clay Ford, Jr. is trying to make the best of a bad situation at Ford, despite its very public 40 percent drop in stock price.

There’s no getting around bad news like that, but Ford is using the crisis to increase cost-cutting, streamline production, refocus on the core business, and, not least, tighten bonds within the organization. Ford has reached out to its unions, white collar workforce, and its dealers — offering them more information about turnaround measures than they’d ever received during better days.

There’s no news like bad news

Bad news can drive positive change, as Ford hopes will be the case. It can be to your advantage to disclose bad news so people in your company will tighten their belts. You can stipulate no raises, no hiring of new assistants, no lavish parties — the usual sorts of measures — and they’ll understand.

Unfortunately, it can also be the occasion for making things worse. Watch out that you (or those under you) don’t become a Bad News Butcher, co-opting the cost-cutting process to settle scores, hinder rivals, and hamstring departments. And don’t let all that weed-whacking take your eye off the prize, which is to get back to creating good news as soon as possible.

Using a crisis to drive change has another chief disadvantage — making your competition aware of your weakness. Of course you won’t want your rivals trumpeting your troubles to clients and the media. Ideally, what you want is a process of slow leakage that accustoms everybody to the news without ever making it Page 1-worthy.

This requires a commitment to telling it like it is on a more or less daily basis. Don’t try to prettify everything. Distributing a few sour apples in every bushel of sweet ones, thus lowering expectations a little, never hurts.

Next time you have some weightier negative information to disclose, wait if you can for a spate of general bad news in your industry before releasing it — putting it in context, so to speak. You might also hold off for some counterbalancing good news. For instance, if you lose a bidding war for an account, and you’re involved in a shootout for another account, try to defer disclosing the news of your loss until you can release the news of your win.

The problem here is that if you lose the next account, then the bad news starts to pile up. Now you’ve replaced a trickle with a torrent. Still, don’t give into the impulse to hide your losses, as so many public companies did during the recent boom. If they had announced the less-than-great news bit by bit, perhaps the damage to their stock prices would not have been as catastrophic.

Remember: Bad news can be so bad that it affects your company’s survival, but it also can be merely embarrassing, a hit to your image at most. What’s important is keeping the latter from becoming the former.

In a time of both misinformation and too much information, quality journalism is more crucial than ever.
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