"Bad News is Good News"

Here’s a valuable lesson I learned when I failed to communicate some bad news about a startup at which I was CEO.

I made a bad executive hire for a company I was leading and decided, after speaking with some advisors, to terminate the relationship with the executive.

source: Hine, Lewis Wickes, 1874-1940, photographer

While the decision was sound, I failed to communicate this news (which some might perceive as “bad news”) in a timely basis to one key person (an investor) who instead heard about it from one of my advisors within 24 hours.

That investor was so upset with me keeping this “bad news” from him that he called me into his office, threatened to take his investment money back and lectured me for two hours on how important it is to communicate bad news in the same way you communicate good news (quickly!).

Perception Outweighs Reality

The problem with what I had done: while my decision to dismiss the executive was sound, it was initially perceived as unsound by the investor due solely to the fact that I withheld the information from him.

Perception in this case outweighed reality.

The investor said something that afternoon: “Bad News is Good News” — it’s a weird phrase but it has stuck with me ever since.

A related excerpt from Jack Welch’s book called Winning.

Information you try to shut down will eventually get out and as it travels it will certainly morph, twist and darken. He compares it to a really bad version of the children’s game of “telephone.”

Bad news is good news (when communicated effectively)!