Pilita Clark: Who is going to tell the boss the bad news?

If you spot a problem at work, are you more likely to tell someone in charge or keep quiet?

I thought about that question last week as WeWork's Adam Neumann was pushed out as chief executive from the office rental giant he co-founded nine years ago.

The move came a week after the Wall Street Journal wrote about a flight he took to Israel with friends in a private jet last summer. After the group had landed and left the plane, the flight crew reportedly discovered a "sizeable chunk" of marijuana stuffed inside a cereal box for the return flight. The jet's upset owner recalled the plane and left Neumann to find his own way back to New York.

The flight crew, in other words, did not stay quiet. That may have been a brave decision, considering the way we instinctively treat the bearers of bad news at work. Usually we shoot the messenger.

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In one of the more recent studies on this unfortunate tendency, participants in an experiment were told they could win $2 in a game and then were told whether they had won or not. The people who failed to become $2 richer said they disliked the innocent messenger “much more” than those who had won. The same effect was detected in another experiment, when an imaginary airport desk worker told participants their flight was either boarding on time or two hours late.

As the study’s authors wrote in the Harvard Business Review, this did not seem to have anything to do with a “halo effect”: the tendency for anyone who brings bad news to put you in such a rotten mood you lash out at anyone in the vicinity. Further tests suggested people specifically disliked the bearers of bad tidings, not others who happened to be around at the time.

Doctors despair

The findings were especially unnerving for doctors, who must regularly deliver awful news. When participants had to imagine being told the results of a skin biopsy, those who were told they had cancer liked the doctor a lot less than people given the all clear. Worse, they were more likely to say they thought the doctor was actively hoping they had cancer.

The impulse to blame the hapless messenger is so ingrained that the study’s authors had just two ideas for dealing with it: try to preface bad news by suggesting you have the recipient’s best interests at heart, or get someone else to do it.

I doubt either strategy would have helped people I have known over the years who delivered bad news to a manager in their firm only to get their heads bitten off. Yet you do not need to be a management guru to understand it is far better for bosses to know about trouble afoot.

Andy Grove, the late former head of Intel, the computer chipmaker, used to advise chief executives to cultivate company "Cassandras" who could deliver early warnings about important industry changes, even if they were relatively junior.

Cautionary tale

Stephen Schwarzman, co-founder of the private equity giant Blackstone, tells another revealing story about the importance of hearing bad news in his new memoir, What it Takes. In 1989 a young partner at his firm championed the purchase of a Philadelphia steel company that an older partner said would be disastrous. The deal went ahead, the company imploded and Schwarzman was duly summoned to the New York office of an investor, where he received a terrific bollocking.

“He asked me to sit down and started screaming at me,” he writes. “Was I a complete incompetent or just stupid?” As the tirade went on, “I had to force myself not to cry.”

The experience led him to rethink the way the firm made decisions. Never again would one person be allowed to approve a deal single-handedly. New proposals would be thrashed out in a big meeting at which everyone had to focus on potential pitfalls and ask questions that the proponent then had to answer.

Finally, having later learnt that at least one analyst had also quietly opposed the steel deal, Mr Schwarzman resolved to talk to junior people working on a potential investment, not just their bosses.

That is a lesson that applies far beyond big Wall Street financial firms. If you are lucky, you work for a boss who has learnt it. – Copyright The Financial Times Limited 2019