Mark Cotteleer of Deloitte Research and his colleague Timothy Murphy have written a great piece about the delivery of bad news in organizations. As Colin Powell once said, "Bad news isn't wine. It doesn't improve with age." However, in many organizations, bad news fails to surface in a timely manner. Cotteleer and Murphy examine this issue and offer a simple framework for thinking about it. They focus on the message, the messenger, and the masses. With regard to the message, Cotteleer and Murphy argue that, "To protect one’s self from the stress of delivering bad news, one may communicate in ways that help the recipient to avoid, distort, or ignore the bad news." With regard to the messenger, they argue that bad news is more likely to be heard and attended to if the messenger has a specific role/responsibility for project oversight. If they don't have that type of designated role, they are less likely to be heard. Finally, with regard to the masses, they argue that a small bit of "sugarcoating" can actually be beneficial. Unfortunately, many organizations take that too far, downplaying serious risks at times.
In my own work (Know What You Don't Know, 2009), I've examined the issue of surfacing bad news proactively. In this excerpt, I explain why problems often remain hidden in organizations:
First, people fear being marginalized or punished for speaking up in many firms, particularly for admitting that they might have made a mistake or contributed to a failure. Second, structural complexity in organizations may serve like dense “tree cover” in a forest, which makes it difficult for sunlight to reach the ground. Multiple layers, confusing reporting relationships, convoluted matrix structures, and the like all make it hard for messages to make their way to key leaders. Even if the messages do make their way through the dense forest, they may become watered down, misinterpreted, or mutated along the way. Third, the existence and power of key gatekeepers may insulate leaders from hearing bad news, even if the filtering of information takes place with the best of intentions. Fourth, an over-emphasis on formal analysis and an under-appreciation of intuitive reasoning may cause problems to remain hidden for far too long. Finally, many organizations do not train employees in how to spot problems. Issues surface more quickly if people have been taught how to hunt for potential problems, what cues they should attend to as they do their jobs, and how to communicate their concerns to others.