Tuesday, 18 August 2009

Dealing with bad news

Bad news. There's a lot of it about at the moment. Almost every organisation will be faced with some element of bad news - falling profits, falling turnover, redundancy, shrinking markets, more competition...

The important thing is to face the news and to be honest about it - with employees, with partners, with clients and with the press, if necessary. In the last week or so, there have been two case studies in how not to do it.

The first case is that of Cobbetts (see here for "The Lawyer" article). It has decided not to declare its profit for the year, although various articles seem to suggest that they have declared their revenue (£48.5m according, again, to "The Lawyer"). As the article points out, Cobbetts are an LLP and so their result will eventually be published. To refuse to discuss profits suggests, at best, an immaturity of thought and a lack of business leadership.

The second case was highlighted on the "Face the Facts" programmes broadcast on Sunday evening on Radio 4 (see here for iPlayer which will be able to stream the programme for 7 days after broadcast, and here for the "Face the Facts" own site). Part of the programme included an attempt to interview people working at a Job Centre Plus, a government agency aims at helping unemployed white-collar and executive staff. Rather than accept a difficult time - and acknowledge that Job Centres are their to help the many rather than the few - the agency's senior staff sent out a memo reminding staff that getting involved with the BBC could lead to their dismissal and to refusing to let the BBC record at a Job Centre Plus site. Instead they stage-managed a visit to a new, clean, calm JCP site in Ealing - which didn't seem to either please or fool the reporters at all.

In both cases the best course of action was to bite the bullet and to admit to faults. Cobbetts should have admitted a loss, said what they were doing about it and moved on. Instead they now have "The Lawyer" interested and the story is likely to run for a while as a result. JCP should have admitted that their targets and model was designed before the downturn and as a result they were dealing with the many first and were outsourcing executive recruitment (which they are). If your organisation is not doing something well, it is often the best thing to admit it.

By trying to hide from bad new or by trying to hope that it will go away, more news and interest has been generated and both organisations end up looking rather foolish.

I doubt that was the plan.

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