Bringing bad news to the boss

How can you deliver bad news to your boss to ensure not only that you don’t lose your job but also that you remain on top of the situation?

Unfortunate things happen even to the most competent or persevering.

Despite efforts at mentoring his team, Ron (not his real name), the sales head of a retail family business, lost his most productive salesperson Tomas to a rival enterprise.

I told Ron not to make excuses, but instead follow Harvard Business Review editor Amy Gallo’s five steps:

Describe the problem

Give an initial overview of the problem and describe the impact on the business.

“Boss, Tomas has been with us for 10 years, but he lives far from his customers. It also takes him two hours one way to come to our office. I offered him a raise, but he was getting tired and sick. Tomas lives just half an hour from Company X, which gave him a new car and an instant promotion when he took their offer.”

“Tomas accounts for one-tenth of our total sales, his resignation will hurt us. I have ideas to prevent future defections, and I’d like to discuss them with you.”

Lay out the solution

Recommend alternatives, with advantages and drawbacks. Provide your boss with well-thought out options.

“We have an empty lot near our office that’s idle. I know we want to expand our office, but the need for employee housing is more urgent now. Tomas is not the only one to complain about traffic, and I don’t want to lose anyone else.

“This project requires some capital, but business has been doing well for the past five years, so I think it’s worth it.

“Or plan B: we can fast-track promotions for our sales stars, which might be enough for some of them to stay. But big differences in pay might injure the morale of other employees and harm us later on.”

Discuss implications

Describe the impact the solution will have on you, your boss, and the business as a whole.

“I have talked to Lyn of HR, who agrees that renting out a nearby space at reasonable prices will entice our people, who are mainly single 20-somethings, to stay.

“I know that the board wants us to keep an eye on costs, but I can do a feasibility study. Under your guidance, Lyn and I can weigh the short-term and long-term pros and cons of this.”

Convey benefits

Give details of benefits, including any small-scale trial run.

“I have talked to Gary, a sales director at another company, not our competitor. They’ve faced a similar problem before. Gary did a tie-up with a nearby condo for their employees, and turnover decreased from 15 to 5 percent in a year. Our plan—since we own the condo—would be even more cost-effective in the long run, since we are not at the mercy of any landlord.”

Shoulder responsibility

Accept responsibility for your own plan. It allays your boss’ fears, and shows that you are serious about making things right.

“Boss, this plan rests squarely on me. I think the board will agree to this, but if they have reservations, I will try my best to respond to them. Worst case, I will go to plan B and discuss with Lyn ways to improve employee evaluation with the aim of encouraging our top people to stay with us.

“But right now I’d like to focus on the feasibility study, and I need your support. What do you think?”

Ron’s boss was indeed upset about Tomas’ leaving, but he supported the plan. So did the board, and the family firm has diversified into real estate, starting with a low-cost condotel for its people.