Delivering bad news is an inevitable part of being a CFO. Budget cuts, layoffs, frozen salaries, or difficult conversations with the CEO about missed targets, are objectively tough.
The bad news about bad news is that it's part of the job.
Knowing that no matter how carefully you deliver the message that it's still going to hurt is one of the tougher parts of being the CFO. But there are ways to make delivering bad news easier
The worst thing you can do is dance around the issue, leaving people guessing at what you really mean.
Start with the core message, then provide context.
Instead of:
"Given current market conditions and our revised projections, we are exploring strategic options that will allow us to maintain operational efficiency."
Say:
"We are implementing a hiring freeze to manage cash flow."
See the difference? The first version buries the message in jargon and ambiguity. The second version is clear, direct, and leaves no room for misinterpretation.
2. Compassionate: Acknowledge the Impact
Bad news stings. And when people are impacted, they don't want to hear a corporate spin on it. They want to know that you see them. That you understand this is hard. That their experience matters.
This is where empathy comes in. And a big part of empathy is learning to sit with discomfort.
A phrase I often share with CFOs is: "I know this is not what you wanted to hear."
Then stop. Do not follow with 'but'. Let that sentence stand. Let people absorb it. Too often, we rush to justify or explain, but what people need in that moment isn't logic; it's acknowledgment.
You might feel uncomfortable pausing there. That's okay. Discomfort is part of leadership.
3. Credible: The Truth, The Whole Truth & Nothing But The Truth
People need to understand why a decision was made, but they don't need every single detail. Your job is to give them enough information to understand that the decision was made with logic and with integrity - without drowning them in data.
● Why avoiding or sugar-coating bad news erodes trust.
● Stick to facts: What happened? Why was this decision necessary?
●Be transparent, but not dramatic. Over-explaining can make people feel like they're being manipulated.
● Accept that no amount of rationale will make some news easier to hear. That's not the goal. The goal is to maintain connection.
Mastering the 3 Cs won't make delivering bad news easy. But it will make you a leader people trust in a crisis.
And if you need proof of how powerful this approach can be, let me share a story.
A few months ago, I received one of the scariest phone calls of my life.
My daughter Mila was on a school excursion in Canberra when a large brand fell from a gum tree outside Government House, seriously injuring one of her classmates. The girl was rushed to the hospital in critical condition, and suddenly, every parent in that school community was gripped with fear. Was our child okay? What did they witness? How did this happen? What was being done?
The school was in an impossible position. They had to deliver news that they knew would shock and terrify every parent who read it. They also knew this information would raise countless questions and concerns. But in that moment, their duty of care was first and foremost to the family of the child that was directly impacted.
The way they handled the communication was a masterclass in the 3 Cs.
Clarity: No Room for Confusion
Their written communication was crystal clear. They stated what had happened, what actions had been taken, and what would happen next. No vague wording. No unnecessary delays. They played with a straight bat.
Compassion: Speaking to the Emotion of the Moment
This was an emotional time for everyone; students, parents, teachers. The school acknowledged the distress we were all feeling. They didn't try to brush over it.
When the headmaster spoke to parents the next day, you could hear the weight of it in his voice. This was a man who wasn't reading a script. He really cared. That mattered. Because when people know you care, they're far more willing to listen.
Credibility: Leadership That Instills Trust
The communication came directly from the headmaster, not a faceless admin team. Every parent in the year received a personal phone call. He acknowledged that some parents felt there wasn't enough communication, but explained that his primary responsibility was to the young girl and her family, who deserved privacy.
The school didn't speculate. They only shared what was appropriate and accurate, and they committed to keeping us informed as things evolved.
Their approach reassured us that the school was in control, that they were prioritising the right people, and that they weren't going to spin the situation.
Bad news is bad news. But how you deliver it defines what happens next.
And in your role as CFO, the same principles apply. Whether you're announcing layoffs, cutting budgets, or telling the Board that targets won't be met, clarity, compassion, and credibility must guide your communication.
Because the moment you get this wrong, it evolves from one difficult conversation to a situation that tests your leadership.
I'd love to hear your thoughts.
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