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3 Ways on How to Communicate Negative News

Craig Dunaway

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3 Ways on How to Communicate Negative News

As a leader, it is your job to keep your employees, shareholders and other interested parties in the loop on your business. When you have positive news to share, communication should be easy, but no business has all highs and no lows. When business catastrophes happen, communication should not be the most difficult part of an already bad situation.

Don’t hide bad news.

The Friday afternoon news dump is a well-known political trick to share bad news when people are less likely to pay attention. It’s tempting for weaker leaders to ignore or even hide bad news between other news or wait to share it until you see if you can fix the problem without ever having to notify anyone. Instead of attempting to hide bad news, it’s better to be completely open. Think about it as a leader. I don’t get upset when I find out about bad news, but I do get upset when I find out about bad news that someone did not bring to me right away.

Get feedback.

You may not want to engage your employees or franchisees after bad news because you’re afraid they will have negative questions or comments. Sticking your head in the sand and hoping the problem goes away does not change opinions. It’s better to find out how people are feeling, even if it is bad. Then, you can take the information to heart, learn from it and do better. You can also answer any questions they have instead of letting them assume the worst.

Communicate frequently.

Businesses with longevity will face challenges during their tenure, and they are rarely short. “Less is more” is not a good strategy for communication during a challenge. For example, several years ago Penn Station faced a credit card breach. Over the course of the nine months that we worked on the breach, I sent out more than 50 memorandums to our franchisees explaining exactly what was happening. It’s better to make sure people intimately understand what is impacting them or could impact them—both positively and negatively.

You cannot communicate too much. If you are facing a challenge or dealing with negative news, increase your communication. There is likely more important information that needs to be shared. I have an open door policy at all times, but it’s even more important when we go through problems. During the credit card breach, franchisees may not have gotten the answers they wanted, but they did get straightforward, cogent and well thought out responses. This helped ease their minds and ensure the entire system we are on top of the problem. Had we failed to communicate the situation (as we were advised by more than one party), the rumor mill would have taken over, and franchisees and other business partners may have jumped to erroneous conclusions. By controlling the message and communicating facts frequently, we were able to keep the system’s confidence throughout the entire process.

Being open and honest with bad news helps your employees, shareholders or other interested parties understand what is happening and what you are doing about it. It prevents unnecessary worrying, and more importantly, rumors about the situation. Just because you want to keep information close to the vest doesn’t mean it is being kept there. If you allow others to filter the information and miscommunicate facts, the gossip grape vine will do your work for you and you’ll be worse off. By controlling the flow of information, you can ensure it is accurate, useful, relevant and complete.

Craig Dunaway has been president of Penn Station since 1999. Before joining Penn Station Inc., Dunaway was a partner at the regional accounting firm of McCauley, Nicolas & Company, LLC in Jeffersonville, Indiana, where he had worked since 1982 in various staff and managerial positions. Dunaway has a bachelor’s degree in accounting from Indiana University and is still a licensed CPA. Dunaway formerly had ownership interests in a Papa John’s® franchisee that owned 11 stores, and he served as the secretary/treasurer for that Papa John’s® franchisee. In addition, he had ownership interests in Coastal Cheesesteaks, LLC (headquartered in Raleigh, North Carolina) until June 2011 and in Louisville Cheesesteaks, LLC (headquartered in Louisville, Kentucky) until January 2014, both of which are Penn Station franchisees. While a shareholder in those Penn Station franchisees, Dunaway served as secretary/treasurer. Penn Station was named one of the Best Franchises to Buy by Forbes in 2016 and 2018 and one of the Best Franchise Deals by QSR Magazine in 2016 and 2017.

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