When Jim Cragg’s company experienced a reduction in business because of sequestration, the president and CEO of S.O. Tech (Special Operations Technologies) had to lay off 31 of his 80 employees in one afternoon.
“That was the worst day of my life,” says Cragg, whose company sews, designs and manufactures military, law enforcement and medical system gear and cloth shopping bags. “Some of the people I laid off had worked for me for 10 to 16 years, and some were a part of a charity program I run with the local veteran’s hospital that arranges for the employment of formerly homeless vets.”
Whether you've lost a key client and as a result have to let an employee go or need to stop using a longtime vendor, every small-business owner must deliver bad news at some point. And most dislike the process.
“Many small business owners go to great lengths to avoid giving bad news, but putting the task off only makes the underlying problem worse,” says Geoffrey Tumlin, CEO of Mouthpeace Consulting LLC and author of Stop Talking, Start Communicating: Counterintuitive Secrets to Success in Business and in Life. “It might not win you a popularity contest, but effectively delivering bad news is an essential skill.”
The next time you have to deliver bad news, try these steps.
1. Determine your main objective. No matter what type of bad news you need to share, the welfare of the company must come first, says Cragg, who notes that once you've established the goals of your company, you can figure out what you need to say.
“Your core message is easy to spot,” Tumlin adds. “It’s usually what you don’t want to say, and the message you've been avoiding, such as ‘we have to let you go.’ ”
2. Be swift and kind. Your main objective should be to deliver bad news as quickly and painlessly as possible with the least amount of collateral damage. “You never know when you’ll want to rehire someone or need an advertising company again. The person receiving the bad news shouldn't feel one bit worse than necessary,” Tumlin says.
Tumlin suggests delivering bad news in such a way as to make the experience as face saving as possible. “Point to outside factors for why you’re making changes, such as you need to lay someone off because you lost a contract,” he says. “Blaming something else is much better than dragging the person through the mud while pointing to his or her work.”
3. Don’t negotiate or counsel. Sticking to your guns when delivering bad news is critical. “You’re not sharing negative feedback, and it’s not time to negotiate,” Tumlin says. “Repeat variants of your message to further explain, but don’t add any new information. You risk drifting away from your core message and being talked out of your decision.”
While it’s acceptable and a good idea to answer practical questions, such as how long until the final day of work, avoid responding to emotional questions or allowing yourself to be mined for details.
“Don’t answer questions about how this happened or if it was because of something the person did previously,” Tumlin says. “That only brings up issues you shouldn't be discussing. Stick to your story and don’t get pulled into any drama.”
4. Handle potential outbursts quickly and efficiently. “If someone has been with you a long time, there may be some crying or anger,” Tumlin warns. “Offer a tissue if there’s crying, and if someone gets angry with you, remind him or her that you’ll be the one giving out references, so it would be a good idea to settle down. Self-preservation often kicks in and the person stops.”
5. Offer assistance. Whenever possible, give bad news recipients a ray of hope, Cragg advises, who was so committed to the people he laid off that he created a follow-up program dedicated to finding jobs for his former employees. “I had weekly calls with them until I’d gotten each a job referral,” he says.
Ned Lavelle, co-founder and owner of Pinthouse Pizza, hired a former coworker to run his brewpub when he started out, but had to let him go eight months later. “By explaining that I’d made a tactical error during hiring and that I was committed to doing what I could to help the former employee find a position, I was able to preserve goodwill between us," Lavelle says. "How I treated the situation also sent a positive message to our employees."
6. Get out. Once you've delivered your message and answered questions, make as graceful and quick an exit as possible. “If you've created a clear core message, it speaks for itself,” Tumlin says. “Overstaying a difficult situation is not productive. You might give up ground you hadn't intended to or talk about topics best left unsaid. Your best bet is to be clear, be concise and be gone.”
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