I had a coaching session with a senior executive who has a “command performance” next week with the CEO and the Chairman of her company. She must deliver a “bad performance story” about her business unit’s poor results for the quarter, even worse, tell them it is unlikely that she can recover the loss by year end. I told her that she may be reporting bad news but it does not have to be a “bad outcome” for her.  She gave me a puzzled look and I described for her what makes a “bad news story” vs. “a good outcome story” when it comes to reporting performance issues to the boss:

“BAD NEWS STORY”

Surprises:  waiting until the last minute to tell the boss that performance targets will be missed. Why is this bad? Because the boss no longer has enough time or options to cover the lost performance from other initiatives throughout the company.  A boss hates having their options taken away especially by someone who works for them.

No Intervention:  nothing was done (or tried) to mitigate the performance issue and a crisis occurs.  Why is this bad? Because there are always options to mitigate a problem, especially when action is taken early.   A boss hates being surrounded by employees who do not step up, who are unaware of their business situation, and who do not confront issues or lack the courage to act.

No Learning:  no insights are gleaned from the situation and nothing is learned.  Why is this bad? Only fools or irresponsible people fall into the same trap twice. A boss has no tolerance for people who do not capture learning from a bad situation and share it generously across the company.

Not Accountable: blaming the issues on subordinates, acts of god, or competitive pressures. Why is it bad? Because the boss wants people to be aware of issues and risks and to manage them. The expectation is that someone who leads a group of people in a business venture will be aware of the business environment, will have risk-mitigation plans in place, and will pace their organization for success. When something goes wrong the boss expects someone to acknowledge that they did not lead people in the right direction, did not anticipate the risks properly with clear contingencies in place, or failed to pace the organization properly with either people or assets.

“GOOD OUTCOME STORY”

No Surprises.  You are there, now, making this presentation because you want them to be aware that your annual targets are at risk. You have come to them now because you believe that you have seen enough of the year to be reasonably certain that your business will miss its targets. You have not given up, but you did not want to wait until later in the year when they would not be able to consider other options within the company to manage the bottom line.

You intervened.  Describe the actions taken to mitigate the performance loss. Give an example of your personal intervention with the issue at hand.  Informed executives understand vagaries exist in the business environment and things do not always go as planned.  Describe options you are considering.  Give them the big picture about shifting external environments and about how you are reacting and anticipating…to manage the results.  Demonstrate that you are aware of your business environment.  You want to impress them that you are in action and you are managing your business.  Give them evidence.  Tell them that you are pulling your top team together to push for more actions for the last half of 2012 and to ensure that the learning from the problems encountered so far in 2012 is shared across the business.

You learned and are accountable.  Take the 10000-foot perspective and speak to what you have learned about deploying people and front-end loading activities for success, or whatever the learning is.   Share some of your views about “broadening the perspective” of your team.  Group your learning into two buckets: (1) things that constrained potential and (2) things that interfered with achieving the potential. Demonstrate that you “see” these distinctions.  (See the viewgraph below.) Acknowledge your learning – it is an implicit request for forgiveness, and most people are willing to forgive.  Acknowledging is also the highest form of accountability.