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Effective bad news communication

Apr 19. 2017
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WHEN TIMES get tough, many companies may have to endure a drastic drop in operating performance – so much so that it can threaten long-term survival. Management has to try its best to keep the business running through many measures introduced to save the company.

Unarguably some actions may have to affect employees at all levels. Even so, the choices to be made are limited, while companies still need to keep good people and take care of their morale. During critical times, it is not wise to let people leave the company for the sake of headcount reduction without proper planning. 

Some companies may introduce a mutual separation scheme as a way to reduce people cost while others may start from light measures that mainly involve cost-cutting.

To save the company during turbulence, management should come up with a well-thought-out communication plan addressed to all employees to avoid any misunderstanding and also to call for cooperation and continued support. 

Unless this is properly done, the company may have to face unexpected damage resulting from misinterpretation of management’s inevitable actions. 

To effectively communicate the bad news, here are some considerations:

The right person to deliver the message – An important message should normally come from top management. Employees would expect to hear from the leader as the most reliable source without further explanation. This may be followed by the head of certain functions as needed, for example, the head of manufacturing or the human resource department. 

Clear explanation of the rationale behind decisions – The decision must be clearly informed, supported by causes and reasons for doing that. It may be necessary to refer to other companies, but this must be very carefully selected and communicated as necessary. To tell something that everyone is well aware of may not be the right thing to do. Sincere communication – The demonstration of sincerity through communication is extremely important. Employees can accept the bad news as long as they can sense truly good intentions from management. It is important to consider which information can be disclosed without harming the company. Giving as much information as possible can be a good approach to consider.

Clear future direction – Before the end of the communication, it is advisable to give some future direction and give hope to employees so that everyone is clear about expectations and the next moves for the company’s benefit. The extent of the measures and their consequences should be communicated clearly to get rid of concerns and fears. 

Bringing bad news may not be avoidable but it can be done successfully with a well-prepared action plan. The bad news can range from cost-cutting in several forms to redundancy reduction. 

No matter how bad the situation may be, employees still need encouragement and a morale boost from management through real positive thinking. Let’s do the best in giving bad news. 

Yanyong Thammatucharee is senior vice president for finance and accounting at Central Marketing Group. He can be reached at 


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