[alain94040]

Easier said than done. Here's a specific scenario. You tell me what management should share and when.

Revenue is seriously down. If this trend continues for another quarter or so, we'll have to start layoffs of ~10% of the engineers.

Do you share the full news now, with no idea of whether there will be layoffs? Do you "lie by omission" by sharing that revenue is down, but not mention the potential consequences?

The CEO typically is hoping for one more deal to close, to turnaround the company and not have to go through the layoffs. Why scare people if it's not needed?

[a_c_s]

Because employees talk. If word gets out that the company is in a tight place before management addresses it to employees then that erodes trust in leadership.

If people distrust leadership then when they do finally acknowledge something negative (eg. we're having 10% layoffs) then employees rationally assume things are actually far worse than that (eg. we're having multiple rounds of layoffs) and will behave accordingly (eg. leave even if not laid off).

On the other hand if leaders build trust by acknowledging reality then when they announce that things are bad people are more likely to behave proportionately and trust that things are only as bad as announced rather than 'reading between the lines' and assuming they are 10x worse.

[WrtCdEvrydy]

As a leader, it is sometimes difficult to admit that you failed, even if it wasn't your fault.

I probably respect my current boss more because he told us a large client was leaving before the client emailed us to cancel.