Bad news gets worse when inaction rules

Bad news comes in many forms: when $17 million goes missing, a failed Sarbanes-Oxley audit, project delays, records compromised, bugs in new technology products and more.

Some organizations ignore a problem and pretend it doesn't exist until it turns into a major crisis. Unfortunately, very few problems just disappear.

Handling bad news requires enough information to understand the problem and develop possible solutions. Years ago, Colonel John Boyd developed the OODA (observation, orientation, decision, action) loop to help new fighter pilots win dogfights. The OODA process can also be applied to handling IT problems:

  • Observation: Gather the available data.
  • Orientation: Analyze the data, delineate the critical data, and eliminate unnecessary information.
  • Decision: Develop potential solutions and analyze the trade-offs. Make sure you have enough information to accurately compare the costs, benefits and likelihood of success associated with each proposed solution. Decide which best fits your organization's requirements.
  • Action: Once you reach a decision, move forward quickly.

Organizations that lack sufficient confidence or experience may spend too much time in observation and orientation. They are often reluctant to make a decision until they have gathered inordinate amounts of data - a delay which prevents timely decisions. Meanwhile, the unresolved problem continues, ramifications grow, and often the situation becomes even more difficult. There are other factors that affect an organization's ability to react to bad news before problems become crises, and there are other ways to deal with problems as well. In addition to using the OODA approach, here are some other recommendations that may help:

Own the problem. When the problem is yours, admit it and address it. Johnson & Johnson's handling of the Tylenol tampering scandal in 1982 remains the gold standard. The company publicly acknowledged the tampering and recalled more than 31 million bottles of Tylenol (costing it more than $100 million). It quickly developed solid caplets and tamper-resistant packaging. Its communication and actions won it favourable press coverage. A year later, Johnson & Johnson had regained the public's trust, and Tylenol had recovered most of its lost market share.

Rely on facts, not emotions. Get the facts ASAP. Without good data, it's difficult to determine potential business impact or develop effective solutions. Objective, fact-based discussions are much more productive than those based on opinions. Focusing on facts also helps reduce the emotional and political aspects of a problem.

Encourage creative solutions. In 1970, the Apollo 13 moon mission was crippled by an explosion in an oxygen tank. Working with Mission Control, the crew used hoses, cardboard, plastic bags and duct tape to jury-rig the command module's lithium hydroxide supply. The innovative solution provided the landing module with the power, water and oxygen necessary for the crew's survival.

Focus on the solution. Undertake enough diagnosis of problems to get the facts, but don't let your response turn into an exercise in finding and punishing the guilty. Focusing on fault encourages backstabbing and destroys team morale. In contrast, developing solutions unites and energizes teams.

Listen to all levels. In a crisis, companies often rely solely on senior staff, largely ignoring input from other team members. Senior staffers generally have more experience to draw from and bring valuable perspective. They have experienced other crises (both similar and different) and have seen the successes and failures that resulted from various approaches. Other team members are often closer to the details, however, and can offer creative ideas for solving the problem. To develop the best solution, leverage every knowledge base available.

Beware of cultural differences. This is particularly important in cultures that defer to age and position, especially in offshore efforts. At one industry-leading company, a junior-level Asian programmer watched silently as a senior programmer presented a flawed software design. The junior programmer spoke up months later, when the flaws caused costly program errors. When asked about his previous silence, he explained, "In my country, a junior programmer must never question a senior programmer."

Act quickly but not hastily. Take time to gather sufficient data, but don't wait to act until the problem is discovered by your competitors, the press, regulatory agencies or your customers. The wider the exposure, the greater the damage.

Every organization regularly encounters bad news. Some stash it away and try to forget about it. Successful organizations use all appropriate resources to address problems effectively and in a timely manner. They know that unlike fine wine, bad news does not get better with age.

Bart Perkins is managing partner at Leverage Partners, which helps organizations invest well in IT and was previously CIO at Tricon Global Restaurants

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