Layoffs, failed projects, and staff relocation are just a few of the issues that can kill team morale in a hurry. CIOs need to know how to handle such situations quickly and effectively before the damage becomes permanent.
Bad news is inevitable in any organization, but trust between leaders and their teams can save the day, said Amit Basu, vice president and CIO at International Seaways, which owns and operates a fleet of crude tankers. “CIOs can protect morale by being direct and timely, and by clearly separating business decisions from individual performance.”
It’s important for CIOs to explain how business priorities have changed and what drove those changes or, when performance falls short, to address it constructively and outline how improvement is possible, Basu said. “Acknowledging the real impact on people, owning decisions without blame, and focusing teams on what remains within their control builds credibility.” Basu believes that when leaders reinforce confidence, provide concrete support, and communicate next steps transparently, difficult messages are received with respect. “Leadership endures not by avoiding hard news, but by delivering it honestly, fairly and humanely.”
A tough challenge for CIOs
Delivering bad news to the IT team is one of the toughest challenges to face as a leader, said Leo Baker, CIO of Vendorland, a firm that helps businesses find the most appropriate vendor for a specific need. “I strongly believe that honesty and transparency are essential to build a team that can navigate through difficult moments together.”
For Baker, a pivotal moment was when the firm’s board of directors decided to change a critical project’s scope early in the development phase. “This change required us to reassess our strategy and adopt new technologies,” he recalled. The move also posed additional risks for some team members, since they were unfamiliar with the new technologies. There was concern about job security due to the pending skills gap.
To address the situation, Baker called an all-hands meeting in which he took full responsibility for the changes. “I explained why the scope had shifted, why we needed to adopt new technologies, and what we were going to do differently moving forward.” He also emphasized the importance of transparency throughout the decision-making process and discussed how the changes would affect team members. “I reassured everyone that we would support those who needed to adapt to the new technologies, and we would work together to adjust our efforts.”
At first, the team’s reaction was mixed, Baker said. “Some were frustrated by the scope of the change, while others were anxious about how the delays would impact their tasks.” He noted that there were also concerns about job security due to the new technology requirements. “However, by being open, answering their questions, and acknowledging their concerns, I was able to create an environment in which the team felt included and supported through this period of uncertainty.” Baker also encouraged team members to propose solutions and brainstorm ways to move forward, which ultimately helped the team shift their focus from frustration to proactive problem-solving.
Lessons from a failed product launch
Roman Rylko, CTO at Python development company Pynest, recalled his firm’s failed attempt at marketing its own human resource management system (HRMS). Costs skyrocketed, both for development and marketing. Company leaders ultimately realized that investing even more money into launching a commercial HRMS would have a devastating impact on the entire company.
“The owners decided to keep the system as an internal tool only and not bring it to market,” he said. Rylko had to lay off about 80% of the product team, but offered some employees the opportunity to work on client projects.
It was a complete shock for the HRMS team, Rylko recalled. “People had been dreaming of releasing their product for months and then, suddenly, like a bolt from the blue, the news came that the project would be staying entirely within the company.”
Rylko opted not to hold a general online meeting but to meet with the entire team, one-on-one and in person. The employees’ reactions varied and weren’t always predictable.
“Some were openly angry, some silently resented me, but about half of the remaining team quickly adjusted to their new roles, Rylko said”
What Rylko now regrets not sharing the warning signs sooner. “People are more receptive to bad news when you don’t play the ‘everything will be fine’ game and talk to them like adults.”
Final thoughts
Deliver bad news as quickly as possible, before the grapevine goes to work, said Ronald Placone, professor emeritus at Carnegie Mellon University’s Tepper School of Business.
“Don’t sugarcoat and don’t wallow in doom and gloom,” he advised. “Make yourself available for follow-up questions or another meeting.”
Most importantly, never use a sandwich technique — good news, bad news, good news — in an attempt to soften the blow, Placone suggested, since it just increases cynicism and distrust.
“When other options have been considered, share them and help teams understand why this new course of action makes the most sense for all involved,” he said.
