“Delivering Bad News Positively”

1. “Delivering Bad News Positively” Lawrence Oliva, MBA, PMP Project Director, Army Programs Group Computer Sciences Corp. PMI Washington DC Chapter Tools Meeting Tysons Corner, VA June 21, 2005 (c) 2005 Lawrence Oliva larryoliva@aol.com

2. Introduction Good news travels fast… but bad news travels faster… • Delivering bad (unpleasant or negative) news is part of every PM’s job • Managing project perceptions is a part of a PM’s job • More and more of a project team’s activities are impacted by external and uncontrollable events • Communicating bad news in a positive manner reduces emotional and personal suffering for the Project Manager and project team (c) 2005 Lawrence Oliva larryoliva@aol.com

3. Definition of “Bad News” • Unexpected, adverse changes from expected results or routine activities • Negative outcomes from corrective action activities • Unpleasant or disagreeable news that indicates personal penalty (money, vacation time, public recognition, promotion) • Loss of a customer or revenue source that provided large revenues and profits (c) 2005 Lawrence Oliva larryoliva@aol.com

4. Current Examples of Bad News • First Airbus A380 deliveries delayed six months • Public Support for Social Security changes lower than expected • Defeat of European Union Constitution in France/Holland in early June • High levels of lead in Washington DC drinking water for many years • Federal Government budget for IT equipment and services flat in GY2006 (c) 2005 Lawrence Oliva larryoliva@aol.com

5. Potential Audiences • Project Team Members • Your Manager • Executive Management • Customers • Suppliers • Investors • Stakeholders • News Media (c) 2005 Lawrence Oliva larryoliva@aol.com

6. Preparing the “Message” For Semi-Bad News Key Points: • Could be worse • Not as bad as it looks • Recoverable problem, not fatal to business • We did not cause problem • Competitors equally affected by problem • Demand not impacted, just production or delivery (c) 2005 Lawrence Oliva larryoliva@aol.com

7. Preparing the “Message” For Bad News Key Points: • Could be worse • No one was killed or injured • Can recover from impact in two or three months • No one blames the company (external factors) • Employees still retain spirit of optimism • Competitors not using problem against us in advertising or marketing (c) 2005 Lawrence Oliva larryoliva@aol.com

8. Preparing the “Message” For Really Bad News Key Points: • Let’s be blunt: it’s bad • It will require 110% dedication from everyone to recover from the problem • We need to understand this is a critical threat to the business and treat it with respect • Let’s be direct about the scope of the problem with our customers, workers and suppliers • If we can’t recover, let’s do the right thing for customers, workers and investors (c) 2005 Lawrence Oliva larryoliva@aol.com

9. Delivering the “Message” (1) • Be businesslike and professional • Present the facts as known • Present consequences of the problem • Present possible solutions that may mitigate major negative impacts • Make your recommendation for the “best” solution • Accept direction from exec management or Board of Directors • Be prepared for emotion, passion and distrust (c) 2005 Lawrence Oliva larryoliva@aol.com

10. Delivering the “Message” (2) As the messenger / sacrificial lamb / project leader you are in a difficult position: • Executives don’t like bad news • You become the single point of focus for the problem • Your recommendations could cost the company a lot of shareholder or investor money • Your recommended solutions could expose the company to a lot of negative media exposure (c) 2005 Lawrence Oliva larryoliva@aol.com

11. Delivering the “Message” (3) Structure Your Presentation: • Current Status • Root Cause • Customer Impact • Company Impact • Short Term Solutions / Actions • Long Term Solutions / Actions • Costs (c) 2005 Lawrence Oliva larryoliva@aol.com

12. Delivering the “Message” (4) Documents To Prepare And Bring: • Source documents about the bad news • Financial analysis of extra costs and lost profits • Potential technical and management solutions • Project plans to implement solution (Gantt, PERT) • Communications plan for clients, employees, stock holders, investors, suppliers, consultants • Approval to proceed document (project charter) (c) 2005 Lawrence Oliva larryoliva@aol.com

13. Example Message: Airbus A380 Delay Current Status:Unexpected production problems will cause a six month delay for first Airbus 380 customer delivery Root Cause: Extra weight caused by standard features such as showers, reclining berth seats, circular stairs, etc. Customer Impact:High, may cause revenue loss and increased costs Company Impact:High, huge loss of credibility after successful first flight Short Term Solution:Work 24x7 to compute heaviest items and replace asap – communicate and work with customers on delay Long Term Solution: Need to improve computer weight calculation capabilities for all items – assign engineers asap Costs: Oooh La La! Hold on to your wallet: €500 million+ Next Steps: Communicate status accurately, be flexible with customers and media attention – highlight complexity of plane (c) 2005 Lawrence Oliva larryoliva@aol.com

14. Presenting Bad News – When It Is Your Fault • Mea Culpa! Oops! Take the blame • Don’t be a weasel and blame others • Do try to explain what you were thinking • Do throw yourself on the mercy of the court, if the problem was an innocent mistake • Do offer to assist in the project recover effort • Do consider updating your resume ☺☹ (c) 2005 Lawrence Oliva larryoliva@aol.com

15. Eight Steps To Preparing & Presenting Bad News… • Know the facts – have accurate info • Use charts & graphs to explain the problem • Develop alternatives and solutions • Involve workers in solution development process • Provide an accurate context of the situation • Be brief, but be complete in briefings • Accept criticism and direction, if appropriate • Be part of the solution, not more “bad news” (c) 2005 Lawrence Oliva larryoliva@aol.com

16. Keep in Mind… • Separate people from problems • Time is money (fix sooner than later) • Experience on difficult projects is valuable for obtaining your next job • “Overkill” communication with stakeholders is good • Every day is a new day • Things can’t get much busier • You can earn PDU’s explaining how you got yourself out of this situation (c) 2005 Lawrence Oliva larryoliva@aol.com

17. Summary: Delivering Bad News Positively • Be honest but positive • Be brief and complete • Make sure the news has accurate context • Provide positive options, alternatives and recommendations • Don’t take adverse reactions personally • Tomorrow is a new day • In the old days they used to shoot the messenger…today you get the assignment to solve the problem (c) 2005 Lawrence Oliva larryoliva@aol.com

18. “Delivering Bad News Positively” Questions and Comments (c) 2005 Lawrence Oliva larryoliva@aol.com