235: Dealing with Bad News

<p>If we try to hide the bad news for the buyer will that work?  How long with it work for?  Bernie Madoff died in prison, his wife left in a perilous state, one son dead from suicide and the other from cancer.  I call that family devastation.  He got away with his lies and cheating for quite a while.  He offered modest, but steady returns.  He told people he had no capacity to take their money, then rang them back at a later stage to say there was an opening.  They were grateful for the chance to give him their money.  The 2008 recession showed who was “skinny dipping” in the markets, as Warren Buffet termed it and Bernie could no longer sustain the fraud.</p> <p> </p> <p>If we are loose with the facts and the truth with our buyers, how will that go toward fostering the re-order culture we want to create?  The usual ploy is to downplay the costs by offering the best case example and not offering the most realistic case.  I was reminded of this the other day, while watching a video from the President of this particular organisation.  He wanted more money, a lot more money for this project.  Let’s park the fact he was a hopeless advocate for his case, bumbling his way through his pitch.  The examples he offered were very carefully culled to make the pain look miniscule.  The obvious problem with that though was the vast majority of the stakeholders did not fit into that minimum damage category.</p> <p> </p> <p>He was trying to avoid the pain, but that came across as dodgy and duplicitous.  We have to reach for our financial calculators and work out the damage for ourselves and we are left to our own conclusions.  It would have been much better to meet the elephant in the room head on and explain why the bigger number was a good decision.  That way the seller controls the narrative, not the buyer.  Call out the number, then justify the living daylights out of it.  Talk about the long term benefits and the opportunity costs if we take no action now.  Pile on the value of the proposition in the context of the number.