Sales leaders, here’s how to deliver bad news to your team (a no B.S. 5-step guide)

Another Monday morning: The sun’s shining, the investors are happy, and the entire office seems to be in an exceptionally good mood. You can just tell it’s gonna be a great week. Or so you thought, until you got that call.

You know, the one from your most profitable customer saying, “Yeah, we’re not gonna be renewing our contract at the end of the month. Thanks for the last five years, though. Peace.”

The news hits like a bombshell, and your head’s still reeling when you come to a terrible realization: As a leader, you actually have to do something about this. Moreover, you have to be the one that breaks the bad news to your team.

There’s nothing worse than having to drop bad news on the people you’re responsible for. But here’s a wake-up call: As a leader, navigating bad news is your job, your responsibility, and your privilege.

Your team chose you as much as you chose them, and this is your opportunity to prove to them they made a good decision. If you don’t mess it up.

Seriously, don’t mess it up

There’s only one thing worse than bad news: Bad news, delivered badly.

I see it all the time in inexperienced leaders: They get the news and immediately think, “Okay, how can I make sure nobody knows about this?”

It’s a symptom of imposter syndrome. Suddenly, all of your time and energy goes into hiding the problem rather than solving it, but guess what? Your team always finds out sooner or later, and in the worst possible way: By uncovering something you were trying to hide.

And just like that, your credibility as a leader is compromised. Now not only do you have a crisis to navigate, you have to navigate it without the trust and faith of your team. And spoiler alert: It’s probably not gonna work. Your team’s too divided to survive.

How to break bad news to your team

Alright, that’s the wrong way to break bad news. Thankfully there’s a better way. It just takes a bit of finesse and patience. I recommend breaking the process down into three days:

  • On the first day, keep the news to yourself and focus on managing your emotional response.
  • On the second day, do research around the problem, gather data, and ask for help from advisors.
  • On the third day, call a meeting and break the news to your team.

Let’s take a closer look at each of the three days.

Day I: Getting perspective

First things first: When you get bad news, it’s probably gonna sound like the end of the world. It’s not, unless you treat it that way.

Because here’s the thing: If you, as your team’s fearless leader, claim the sky is falling, people are gonna believe you. They’re gonna buy into your fear and helplessness, and that doesn’t help anyone.

So pause, take a minute, and breathe. Don’t jump to conclusions, solutions, or decisions; not yet. Your number one priority after getting bad news must be managing your own emotional household before you worry about anyone or anything else.

Before taking any further action, I recommend completing two exercises: The Worst Case Scenario Planner and The Five Why’s. Let’s take a quick look at each.

The Worst Case Scenario Planner

If the present crisis feels like the end of the world, you lack perspective. The truth is, even the worst case scenario probably isn’t really all that bad.

You can prove this theory by mentally playing out the crisis until it’s final consequence. For example:

  • The bad news: Our biggest customer just canceled.
  • Okay, I acknowledge and accept that. What happens next?
  • Well, we’re really going to struggle financially this year.
  • Okay, I acknowledge and accept that. What happens next?
  • We’re going to have to report this to the board. We’ll probably be criticized and have a lot more pressure on us in the coming quarter.
  • Okay, I acknowledge and accept that. What happens next?
  • We’re going to have to come together as a team or we’re going to get into trouble raising the next round of funding.
  • Okay, I acknowledge and accept that. What happens next?

You get the idea: Keep playing this out until you reach whatever that final consequence is. Do this long enough and you’ll usually come to one conclusion: It isn’t final, it isn’t consequential, and it certainly isn’t the end of the world.

Even if the final consequence is, “And then the company dies,” that’s still not the end of the road. You’ve already got a great team, so use it to build something new. Play any crisis out over a long enough period of time and the answer is always the same: Everything is going to be fine.

The Five Why’s

We’ve talked about The Five Why’s before so I’m not going to spend too much time on them here. Instead, let me give you a quick overview: The Five Why’s help you understand the root cause of a problem, and the process is pretty self-explanatory: Ask “Why?” until you uncover what truly caused the crisis. For example:

Again, you get the idea: Keep asking “Why?” until you can’t dig any deeper and you’ve found the cause of the crisis. Only once you truly understand the problem can you start developing a solution.

Speaking of which …

Day II: Finding answers

Alright, you’ve spent the last 24 hours processing the news and should be in a more stable emotional state. Even so, you’re still not ready to break the news to your team.

Before you call a meeting, spend a day gathering data, getting advice, and identifying potential solutions to the problem. Depending on the severity of the crisis, you can find help from a number of sources. For example:

  • Your co-founders
  • Your peers
  • Your advisory board
  • Your legal counsel
  • Your mentors

Someone, somewhere, has experience with whatever problem you’re facing. Find them, talk to them, and develop an action plan.

You don’t need all the answers but, by the end of the second day, you should at least have a few proposed solutions. Then get some rest. You’re gonna need it for tomorrow.

Day III: Breaking the news

On the third day, after you’ve had a chance to process the information, find help, and identify potential solutions, it’s time to let the cat out of the bag. You’re no longer doing anyone any service keeping the news to yourself.

Here’s the five-step process I use to turn an undeniably unpleasant situation into a smooth and productive experience as possible.

But first, one quick side tip: Never break bad news on a Friday. It doesn’t give your team enough time to process or make progress. Don’t ruin their weekend. Save the news for Monday morning.

Step I: Drop the bomb

Successfully delivering bad news to your team is an art. Luckily it’s an art that can be easily replicated with the right formula. Here are a few tips to start your meeting off right.

Lead with the bad news

Bad news is, by nature, bad. Don’t try to disguise it as anything else.

If it’s a big deal, don’t pretend it isn’t. If you’re worried, don’t pretend you’re not. People pick up on incongruencies, and your dishonesty is going to compromise their trust in you as a leader at a time they need it most.

Just be straight with people and kick off the meeting with the unfiltered bad news. Tell ‘em what happened, what it means, and how it’s going to affect them. For example:

“Alright, I’m not gonna sugarcoat this: Our biggest customer just canceled. At best, this means our year’s revenue predictions are down by 30% and, as a result, we’re going to be facing some pretty major consequences.”

Take ownership

As a leader, the buck stops with you. Regardless of who may have been involved in the screw-up, you need to be the one that takes ownership and responsibility. For example:

“I know this is a shock and, trust me, I hate it. But ultimately, this is on me. I messed up and we lost this customer as a result.”

Sure, Bob may have actually been the one that failed to give the customer the support they needed. But you’re the one that put Bob in that position. You’re the one that failed to follow-up and follow through.

Summarize your journey

Finally, give your team a quick summary of the journey you’ve been on so far. Tell them when you learned about this, how you reacted, the research you’ve done, and the lessons you’ve learned.

But keep it short. People aren’t going to be able to take in three day’s worth of research. For example:

“I got the news on Monday and took the day to process what exactly this meant for us. On Tuesday, I reached out to the customer and learned they canceled primarily because they weren’t getting enough value out of our product. If we’d provided more support and training, we might have kept them. Following that, I reached out to a few board members to devise an action plan.”

Step II: Help your team process

At this point, it’s usually really tempting to try and ease the tension and fear by jumping right into your proposed solutions. Don’t.

Just like you needed time to process the news, so does your team; give them the freedom to feel angry, scared, frustrated, or whatever else they need to feel. Let them ask questions, throw blame, and point fingers. It may not be pretty, but it’s necessary.

Before they can think productively about the crisis, they need the opportunity to feel whatever it is they're feeling. If necessary, break people out of shocked silence with specific questions like, “What are you feeling right now?”

Once you’ve got ‘em talking, let ‘em talk. Only step in to answer questions or steer the conversation back on topic.

Step III: Present your solutions

Even after processing, most of your team is probably still going to be reeling from the news. As a result, they’re going to look to you for answers and guidance.

This is when you want to introduce your solutions. Keep in mind: You might have 15 different ideas but you don’t want to overwhelm your team. Instead, focus on the top three, then ask for feedback. For example:

“After talking with the customer and the board, I see three different ways this can play out. I’ve got my preference, but I want to know what you guys think. And please: If you’ve got a different idea, let me know.”

Note: Don’t worry if you don’t have it all figured out yet. Even a rough outline will give your people hope to cling to and a goal to work toward.

Step IV: Take immediate action

Once your team has decided on a plan of attack, identify the first step of that solution. This should be an action item that can be tackled immediately. Not tomorrow, next week, or next month: Today, right now, in the meeting.

Here’s why immediate action is so important: There’s going to be a lot of uncertainty, anxiety, fear, and nervous energy in that room. As a leader, you have the power and obligation to transmute that negative energy into something productive. And once you’ve got your people actively working on something, you’ll notice an immediate shift in their mental and emotional states.

Here’s a short example of what this might look like: “We can’t undo what’s done, but we can make sure it doesn’t happen again. Let’s take a look at all of our current customers with a total value of $10,000 or more. If any of them haven’t been contacted by our success managers in the last 90 days, let’s make sure we check in with them.”

Step V: Remind your team who they are and what they’ve done

Even after all this, your team’s probably still feeling pretty scared and discouraged. Don’t let them leave the room that way: Remind them that this problem isn’t bigger than them by closing with a strong, encouraging, empowering call-to-action. For example:

“Most people don’t get the privilege of facing a crisis of this magnitude. We do because we’ve overcome so much in the past. And we’re gonna do it again. I don’t have all the answers, but I know that if anyone can pull through this, it’s us. Why? Because I believe in each of you individually and I believe in us as a team. So fuck it, let’s beat the odds and make this happen!”

The meeting started with a slap in the face, so end it with a pat on the back.

Lead the charge

As a leader, “Bearer of Bad News” is part of your job description. But don’t forget: Breaking bad news is just the beginning. Now you’ve gotta actually fix things.

And that’s where my final piece of advice comes in: In times of crisis, you don’t get the luxury of leading from an office chair. You need to be on the front lines, with your team, leading the charge and taking the hits.

  • If someone needs to take public responsibility, it should be you.
  • If someone needs to write a painful press release, it should be you.
  • If someone needs to host a Q&A with your customers, it should be you.

Find the most difficult, most painful part of the solution and take full responsibility for it. That’s what it means to lead from the frontlines.

No one said it was going to be easy, but we both know you didn’t get where you are by taking the easy route; so get back out there and crush it.

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Too busy to read? Watch this video to learn how to deliver bad news to your team.

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Numbers down? Missing your quota? 3 steps to deal with stress in sales

No doubt about it: Even if you handle the situation flawlessly, most bad news still causes stress. Learn how to process and channel that stress into action here.

Impostor syndrome: How to stop feeling like a fraud

As a leader, you have to take ultimate responsibility for the company’s failures. If you’re feeling discouraged after a round of bad news, read this to get back on track.

6 signs you’re an awful sales leader

No surprise, your competency as a leader directly affects how often you have to deliver bad news. If it’s becoming a regular occurrence, do a little soul searching with this article.

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