It pays to communicate bad news

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In an age of increasing information transparency, building a culture of trust in your organisation is more important than ever. Keeping employees in the loop can increase employee dedication, retention, and productivity.

In an interview with the Kellogg School of Business Trust Project, Andrew Swinand, CEO of Leo Burnett North America, suggests that even communicating “bad news” swiftly and openly is important. In this day of social media and digital access, employees and customers are likely to find out soon enough, so it is vital that a business communicates with them openly to maintain trust.

Swinand suggests that today people expect to be informed and included. To help organisations attract and retain the best talent, their employees need to understand the reasons for decisions. He believes that businesses need to embrace a greater level of transparency in terms of sharing information with their employees. In his view, companies that share information are going to have employees who exhibit greater loyalty and work harder.

The benefits of openness also apply to bad news. Swinand says that “if you’re not, as a leader, communicating, telling the story, managing information, people are going to make up stories on their own”.

Listening to employees and acting on their feedback is also an important part of an open communication strategy. Employees will feel more valued if they know someone is listening to their issues and concerns.

While there are challenges in communicating openly and investment is needed to build trust, Swinand believes “the commitments in brand loyalty and employee loyalty…… far outweigh all the investment that’s required”.

The bottom line for managers is that you shouldn’t hesitate to communicate openly, even when it is bad news that you need to communicate.

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