How to deliver bad news to your team - Part 3

Learn how to apologize

This is the final (and possibly the trickiest) type of bad news you have to deliver to your team. This is when you have to go back on your word. Break a promise. Yes, this is about how to recant gracefully without losing complete trust with your team or with losing minimal trust.

Promises work brilliantly when you can honor them. Unfortunately, breaking a promise drains your team's trust battery more than fulfilling them. This is why managers should be extremely careful in making promises. In general, my advice to managers is to not make promises about outcomes which could have a large impact. Outcomes like compensation, org structures, promotions, etc. I have a pessimistic view about permanence in corporations (especially smaller companies), so I recommend that managers commit to the path but not the outcomes. However, if you are truly committed to the path and put in the work, there is a decent chance that you will achieve the outcome you were gunning towards. The only time a promise is probably appropriate is when your team's trust battery is close to zero, and there is only an upside to promising something to your team.

Any decision-making meeting that more than thirty people attend will eventually become a collection of unreliable narrators unless the decision is written down somewhere. It is no surprise that people managers and senior leaders are expected to have exceptional communication skills. They help reduce the loss in the fidelity of information flow in growing organizations. However, lossy communication can never be completely eradicated, it can only be managed. If humans had perfect recall, we would have invented warp travel by now. There will be instances when unclear communication propagated by unreliable narrators will sometimes require you to recant your promise to your team.

But if you do get to a point when you have to break a promise you made to your team, there are a few things you can do to salvage your reputation. A lot of what I wrote in "How to deliver bad news to customers" also applies here. When you meet with your team, you must focus on three broad things; The Apology, What Happened, and The Follow Up.

When you meet your team (in person, if possible) to deliver the news of the broken promise, start off with an apology. Don't try to deflect blame on the unreliable narrators in the company. Your team must collectively hear you say, "I am sorry, but I can't give you what I promised to ." Not "We are sorry," "The company is sorry," or "The leadership team is sorry ."The only thing that will do is, "I am sorry ."Say it with humility and say it like you mean it. 

Empathy and vulnerability have been recognized as markers for leadership excellence for at least a few decades if not more. However, even in this day and age, leaders struggle to apologize authentically in public. I suspect this is partially due to the rise of the Silicon Valley Tech Bro CEO. Tech Bro CEOs tend to hire Tech Bro Executives. I also think there are a lot of CEOs and executives out there who are in their seats not because they are the most qualified for those jobs, but because they aggressively lobbied for it or just asked for it. Or, it could simply be that the world still leans towards hiring Type A, brash, aggressive extroverts as executives even though research says empathetic leaders perform better. 

Regardless of your personality type, you must learn to apologize authentically in public. There is a lot of literature out there about how to apologize, but I will mention one easy technique you can use to deliver a sincere apology. Leave out the "but" from your apology. "I apologize for this, but…." followed by many sentences that deflect blame from you. E.g, "I apologize for this, but the real issue is with the marketing team ." Replace that with, "I apologize for this. I made a mistake, and I am sorry. I know I have lost trust with you all, so I will work on improving myself and ensuring this communication mishap with the marketing team doesn't happen again". 

Another easy way to get better at expressing authentic contrition is by freely apologizing to people who are lower in the societal or corporate hierarchy than you. I never hesitate to apologize to interns, my team, other teams, customers, and the cleaning crew who would come in at 6 PM to clean the office. Especially if I am holding them up.

I also apologize to my son freely. There is nothing more humbling than looking at a smaller version of you who is looking up at you with disappointment, tear-filled eyes, quivering lips, and saying, 'I am sorry for getting upset at you.' There is also nothing more rewarding than your son hugging you as an acceptance of your apology. I doubt your teams will forgive you that easily, but I digress.

Once you are done with your apology, get into some detail about "What Happened ." Describe the path you went through when the stairs turned Escheresque and the gold turned to coal. It is OK to blame a failed process or poor communication, but it is not OK to blame any individual besides yourself. 

After you have described how the Rube Goldberg machine malfunctioned, talk about how you will fix the process in the future. Lastly, leave plenty of time for questions and bear any additional lashes your team wants to give you. If at least one individual reaches out after the meeting and expresses sympathy for your situation, you might have survived the debacle with at least a tiny bit of trust still in the battery.

Personal Anecdote

A long time ago, or maybe not so long ago, I was running engineering for an e-commerce company. The company's founder never intended to build a multi-billion dollar company. From the beginning, he only wanted a lifestyle business that would pay the bills for himself and the employees and keep the company's size small. For about ten years, the company was bootstrapped and never took in any internal investment, just so that they could stay in complete control and never worry about valuations or funding rounds or opinionated silicon valley types wearing Patagonia vests in the boardroom. Unlike traditional venture capital-funded companies that lean on equity compensation quite a bit to attract top talent, this company's employees didn't have any ownership in the company. They had a salary and a bonus but no stocks or options. The entirety of the company was owned by the founders. All of this was perfectly normal for a bootstrapped company. And then Covid happened.

During the height of the pandemic, two things happened. One, online commerce exploded in unimaginable ways. People now suddenly stuck inside their houses just spent all of their money online. My company benefited from the sudden spike in online e-commerce activity tremendously. The year-over-year growth of customers and revenue was breathtaking. The founder decided to capitalize on that moment and put the company on a more traditional high-growth late-stage company.

The company raised external capital (very easily) and also decided to hire a lot more people to expand the business. In high-tech companies you can't hire top talent if you are unwilling to give them an equity stake in the business. Additionally, the existing employees were also getting increasingly disgruntled about not having an equity stake in the company. There was also growing concern around the company's best employees being poached by competitors and other software companies who were willing to offer stocks or options. After some pushing by me and my executive peers, the company collectively agreed to give out equity to all full time employees. Everybody was excited, but they also wanted to know when the actual rollout would occur and how much will their equity take be, so that they could compare it to other offers they were getting in the market and decide the next steps. 

The actual rollout was dependent on the corporate structure of the company changing, so I couldn't commit to any timelines to my team. However, I got (or atleast I thought) a commitment from the executive team about sharing the approximate equity dollar amounts (and future growth projections) with the employees, giving them a reference point to compare against the rest of the industry. I expected everyone in my team to act like owners and never say, 'It's not my job' and now that every employee was actually becoming an owner (however small it might be), it made my job as a leader dramatically easier. All of this was received with a lot of enthusiasm and fanfare by my team. I just had one tiny problem. Remember how I mentioned I had a commitment from the executive team about sharing rough numbers? Well, it turned out, I didn't.

Only half the executive team thought they would share some numbers with employees, and the other half, which included the CEO, didn't think we committed to anything. We were all unreliable narrators, because there was no written evidence of what we actually agreed to. More importantly, our general counsel basically said we couldn't make any half-baked promises like that, and in hindsight, sharing approximate numbers was exactly that. A half-baked half-measure. So now, I had to go tell my team that I won't be able to give them what they had been waiting for more than a year. I had to go back on my word.

I jumped on a zoom call with all the engineering leaders and decided to break the news to them. I apologized to them directly and took responsibility for my failure. With a quavering voice, I said something along the lines of, "I know I promised you this, and I know how long you all have been waiting for this, but unfortunately, I can't give you what you want. I am extremely sorry for going back on my word". Note that I used "I" in the apology. I never said "We" or "The Company", or "The Executive team" etc. I didn't blame any other unreliable narrator. 

The arrows and pitchforks came fast and furious. The consistent arrow thrown at me was, "This will further erode our trust in you ."My consistent answer to that was, "Yes, I understand it. I hope I can earn some of that back when equity does officially get rolled out, which I am still committed to doing next year. I want to be transparent with all of you about what is going on, even if being transparent means you will lose some trust in me".

Towards the final minutes of that meeting, the arrows finally died out. Everybody's arms were tired of holding the pitchforks up. The group had moved on to acceptance. After the call, a few people reached out to me, empathized with my predicament, and expressed some support. Surprisingly (or maybe unsurprisingly), everybody who reached out to me thanked me for my transparency. Small wins...I will take it.

Equity got rolled out the following year and everybody lived happily ever after. I think… 

A quick recap of takeaways from this chapter

• Don't make promises to your team unless you really need to

• Commit to the path versus outcomes

• Companies are filled with unreliable narrators. Expect miscommunications to occur

• If you have to go back on your promise, take personal responsibility, and apologize authentically

• Practice apologizing to your child