"Our business is going through a tough time financially. How transparent should we be with the team about the situation?"
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It’s always tricky to decide what information is best kept private and what should be shared with the team, particularly when it comes to financial affairs. When times are tough, you don’t want to ruffle feathers and create too much cause for concern, but you also need to mobilise the company around solving the issues at hand.
The real truth is that, if a problem exists, it’s likely the team already knows. Stress and anxiety are contagious. However well you think you might hide them, more often than not they’re plain for all to see. If you don’t say anything then they soon will, and you’ll run the risk that they imagine the problems are even greater than they actually are!
If you do choose to share information with your team, we would suggest you be mindful of a few things:
Act early and fast
When bad news arrives, the hardest thing to manage is the shock. The earlier you can signal there’s a problem, the easier it will be to stomach, and you can quickly dispel any myths that might have materialised through hearsay.
Be incredibly clear
Remember that some of these concepts - like cash flow, for example - might not be familiar to some on your team. Make sure they really understand what you’re saying and what it means. Any confusion can lead to more worry than is necessary.
Share solutions, not problems
Demonstrate the company is decisive and there is a way out. Move quickly from explaining the issue to addressing it. Temper any concern by clearly outlining next steps and ways to move forward. Perhaps your team even have some good ideas themselves.
Keep people updated
Once you let them know of a problem and how you’re working hard to solve it, keep them abreast of progress. Silence is dangerous and no news is often perceived as bad news.
Many leaders find a huge sense of relief when they share openly with their team. The burden of hiding bad news absorbs energy that could be better invested in solving the challenge at hand.
But transparency, in truth, starts long before any issue materialises. The rumour mill only turns when people feel they’re being hidden from. If the team trust that you’ll be open and frank with them when there are problems then they’ll be more receptive to working hard to resolve them.