When is the Right Time to Come Clean?

Posted on October 7, 2007

All businesses encounter problems from time to time. But when really bad news is staring you in the face, how much should you share and when?

How deep into the doghouse do you want to go? Oftentimes, when faced with a problem, you can choose to take the hit up front and tackle it honestly, or you can cover it up, ignore it, dodge it, or hide from it in some way. For me the litmus test is whether avoidance will put you deeper into the doghouse, even if the trip to the doghouse is later than it might be.

Don’t make it worse

The legal term is mitigating damage. That means that you do whatever you can, as soon as you can, to reduce the damage to all parties from growing further. For example, you realize that your outbound shipment just missed the ocean freighter. You know now that the machine you promised seven weeks from now will be late. If you tell the customer now, he can reduce his losses by taking other actions. You will mitigate his risks. On the other hand, if you don’t tell him, what if he decommissions his old equipment in anticipation of a timely arrival? Then he discovers it’s not on board when the ship arrives. Your late shipment hurt him, but your lack of honesty has cost him much more. Look out!

For me, the most important factor in deciding how much bad news to divulge is the issue of mitigating damages. It’s just wrong and bad business to not be candid, and thus increase someone’s pain and losses. But what if there is no mitigating that can be done?

Your partners

The next biggest factor for me is the nature of the relationship between the parties. The closer it is, the higher the obligation for complete openness and honesty. Anyone you regard as a business partner (and that could be a legal partner, or a trusted vendor, key employee, spouse, etc.) should be entitled to know the straight skinny. Keeping things secret from them when you know they’ll care is detrimental to the relationship in the long term.

Now, maybe when you get bad news just before a weekend, you could wait until Monday to share it. Or if they just had a death in the family, you could wait a week to let them prepare for the next blow. Being kind is certainly acceptable. But holding out because you’re afraid of their reaction, or because it may cost you, is not good practice.

Time is pressing

Sometimes the passage of time makes the decision for us. If a decision needs to be made with someone, it’s paramount that you share the situation with them soon enough to allow them to fully participate in the decision.

Getting credit for recovery

One of the best ways to build client and customer relationships is to recover from a blunder in fantastic fashion, exceeding expectations. I can’t tell you how many times this has been the key factor in solidifying a relationship for me or my company. Not that I ever purposefully messed up to have this opportunity, but when it happened, I dove right into the fire and kept at it until all was fixed. This usually costs money, but it’s better than advertising!

If you and your company follow a policy of forthrightness, a reputation will develop along those lines. Over time (a few years), you’ll find that people trust you more and more quickly. It’s a big advantage.

Gentleness

Sometimes bad news isn’t about what you did wrong, but about what they did wrong. Problem employees pop to mind. While being blunt, direct and self-critical are great techniques when you’re admitting to your own company’s failings, being gentle, tactful and caring are the way to go when someone else blew it. Just be sure they get the message, so that the problem doesn’t continue.

All at once?

Sometimes you can’t rip away too many old beliefs and expectations too soon. You have to do it one piece at a time, giving the other party time to absorb and acknowledge the issues one at a time. Sometimes that means not admitting quite all that you know right away. Just make sure you’re not doing it to save yourself a headache, or that the delay isn’t causing increasing damages for anyone.

When is telling a lie OK?

In my book, it’s rare if ever that it’s the right thing to do to lie. This article is really about what to do when you’re already headed toward the “doghouse” and is in the context of business—what we do to make money. So lying to save a life (which is certainly understandable) isn’t part of what we’re talking about.

Lying when it’s easy to detect and you’ll likely get caught is clearly a bad idea and is the fastest way to destroy your credibility. The other nasty problem with lying is that you often have to keep lying to maintain the story, which means you’re being bad over and over again. Pretty soon you can be faced with just a few options, none of which is easy.

Even when lying is of little consequence to you down the road, patterns of dishonesty develop into a bad reputation and over time, you’ll pay for it.

The chess game

Whenever I’m faced with situations that look like they require uncomfortable disclosures, I look at it like a chess game. If I take one action, what will they do, then what would I do, and how does that path play out. Then, I repeat the process with all of my alternatives. It certainly helps clarify what to do.

Takeaways:

• When facing the doghouse, think of your customers first and concentrate on mitigating damages.
• Always be candid about your mistakes to give your business partners time to avoid further pain and losses.
• In order to give your partners time to absorb the damage, you could wait to tell the entire ugly truth—but only if withholding the facts doesn’t cause further pain.