As a founder, one of your main responsibilities is keeping the board informed about what’s going on. You can go about this in different ways: monthly email updates, frequent calls, quarterly meetings, or all three. No matter how you choose to do it, remember this – those official board meetings, they should be procedural, not shocking. If anything, you want them to be boring; no surprises or bombs being dropped.
The Danger of Delay
When you have good news to share, keeping people updated is easy. Who doesn’t want to say that they’ve doubled their customer base and exceeded revenue goals. But no one wants to be the one who has to break bad news; at least, no normal person. It’s typical to avoid tough conversations… put them off until you’re in a better headspace (or until your secret hope of everything resolving itself comes true).
But, as a founder, you can’t afford to ignore these discussions. Your time is immensely valuable, and every minute you spend avoiding the discomfort of a difficult conversation is a minute that a problem grows. When you learn about bad news, you want to communicate it with each board member right away; don’t wait until the next quarterly meeting to share. Otherwise, you may end up in a four hour long merry-go-round because no one’s aligned on the future – or the present.
Learning about bad news is hard. Sharing it with others is harder. And telling it to people who have a financial and personal stake in your success… well, that can feel impossible. However, it’s something you’re going to have to do at some point. No one’s perfect. And no founder is going to take their startup from Pre-seed to exit without a misstep or two. There’s no guarantee this conversation is going to go well, but there are some steps you can take to help ease the tension.
Strategies for Staying Aligned
Address it early. You want to wait and see if you can resolve this on your own; I get it. But when you’re not able to, you’re going to have to bring it to the board. And they’re going to ask how long you knew about it and let it grow. Do you want to say you’ve been sitting on this information for the past six months, or six days? A good practice is to stay in communication with each board member individually beforeany official meetings. Don’t be afraid to call them up for a one-on-one conversation when you need to. This gives you an opportunity to make sure that once that meeting does roll around, everyone is already aligned – instead of wasting an hour to get there.
Address it head on. Don’t give a half truth. You’ve already shared bad news… don’t try and dress it up in a pretty bow. Be very clear and direct about the situation you found yourself in. Holding back details makes you look manipulative and it hinders their ability to help.
Consider how you want the board to weigh in. Once you break the bad news, the board is going to have questions. You don’t want to be floundering around, answering “I don’t know” to every follow up question. Come to the meeting with a clear understanding of what went wrong, how it went wrong, and how you’re going to adjust moving forward. Don’t forget, you chose your board members for a reason. You picked them for their experience and understanding of your place in the market. Consider their strengths and how best for each of them to weigh in. Take the time to figure out how you want to guide the meeting so that it ends with a helpful resolution. It’s assumed that you’re going to have problems; it’s expected that you can form a plan to fix them.
Having to break bad news is rarely pleasant for anyone involved. But it is an inevitable part of every founder’s path, and the sooner you can master it, the better. Focus on being clear and direct with the news you’re sharing. Don’t beat around the bush or try to cushion the blow with half-truths. No one’s going to be happy receiving, or sharing, bad news. But the goal as a founder isn’t to keep everyone happy – it’s to keep everyone aligned and driving forward to the same end goal.
