The art of telling bad news well

Posted by Peter Labrow on 25 January 2009

Sometimes, bad news has to be delivered. There’s a temptation to either avoid the issue or dress the bad news up as something else, but it can be more effective to play with a straight bat.

No one likes to deliver bad news – marketing people especially. Whether it’s a price rise, a reduction in features, a change of management or whatever, bad news (or, at least news that’s not positive) can be tricky to handle.

But it doesn’t have to be. The first thing is to assess whether the news needs to be communicated at all. I’m not suggesting that bad news is buried: just questioning whether it is relevant. Many companies feel that their customers have a far better knowledge of them, emotional investment in them and relationship with them than they actually do. As an example, I had one customer that wanted to communicate a change of ownership. My first question was: “are customers even interested in this?” – was it something that, if you didn’t bring it to people’s attention, was significant to them? If I buy a washing machine from Comet, I really don’t care if the management director changed the day before. Will your customers? On reflection, my customer didn’t think so either.

As I said, many companies (especially smaller, service-based companies) feel that customers are so close to them that such a change would unnerve them, but seldom is this really the case. You only make it seem important, and therefore potentially unnerving, because you make such a big deal about it.

If you do need to tell customers, then the next question to ask is how it affects them. Most companies make the classic mistake of communicating how it affects the company itself, even if this seems a customer-centric message – such as “we will be more efficient, deliver better service” and so on – but this is only dressing up your introspective view to look customer focussed. You need to get to the nub of what the customers’ real issues are.

I was reflecting recently on how two highly competitive (and both marketing savvy) companies, Apple and Microsoft, had dealt with a similar situation: the change of the top man.

Now, I am what they call an Apple fan, and I make no bones about it. I use a Mac, I have an iPhone and I vastly prefer the ‘Mac experience’. However, I’m by no means blinkered – I have used PCs for around twenty years, and only moved to Macs a few years ago, so I have a balanced view. (In fact, since I’m often testing websites and applications I continue to have a regular exposure to many versions of Windows and Linux.)

From a marketing perspective, I usually think that Apple is the sharper cookie, with Microsoft maintaining its position as much by virtue of momentum and mass than anything else. But, when it came to Bill Gates stepping down, the communication was more or less excellent.

On the face of it, Gates’ departure was considerably more than a hiccup. For most people, Gates was Microsoft, was Windows – and in many ways, was even the entire PC software industry. How on Earth could Microsoft survive without Gates? You’d think that share prices would plummet, confidence would evaporate and the company lose focus. Far from it.

The departure of Gates was handled very well. Microsoft was open with information, well in advance. The timescales and succession plans were clear. The roles of major players were understood. Gates left; Microsoft carried on. We all knew, but nobody cared – not because we weren’t interested, but because we were well informed.

Contrast that with how Apple is handling Steve Jobs’ departure. Yes, the circumstances are different, since Gates was retiring (in a planned way) to focus on his charity foundation and Jobs is (currently) taking a temporary break due to ill health. But even that news caused a sharp downturn in the Apple share price. Like Gates, Jobs is seen as being the personification of his own company and its products. But, unlike Gates and Microsoft, there’s been very little work put in to change this impression. Apple has been non-communicative, guarded and circumspect with succession information. Yes, Jobs’ health is none of our business: I totally accept that. But the leadership of the company affects customers and shareholders alike, and it’s not good management to deliver uncertainty. At some time, for whatever reason, Jobs will leave. This year, next, in five years, by choice or not – but it will happen. And it needs to be prepared for. This is one area where Apple could learn from Microsoft. For a company whose marketing is often self-important, overly pompous and pretentious, Microsoft got this pretty much spot on. Bad news became no news, compared to Apple’s no news becoming bad news.

I see there being a clear lesson in this. Deliver bad news only if you have to, but if you have to, deliver it. Tell the story straight. Work out what it really means to customers and shareholders and then focus on that – and that alone.

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