Sometimes being the CEO means doing things you don’t like, such as terminating employees or disclosing that your company failed to meet certain goals. But when it comes to delivering bad news to your team, no matter how, when or why, it feels like a shock to the entire organization. Why? Because most employees are heads down, running a million miles an hour, doing good work with the expectation that good things will happen. Then boom, the CEO shows up with news that no one wants to hear.

It doesn’t matter how obvious the signs and signals are prior to an announcement, there’s an immediate destabilization across the board. Everyone instantly thinks: “What is really going on?” quickly followed by “What does this mean for me?” These thoughts are inevitable. There’s no way to deliver bad news and have employees think “Oh well, back to work”. There isn’t a company on the planet that hasn’t faced a challenge that needed to be shared with employees. The important part is how it’s handled.

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I’ve met CEOs who take the view that “s*&t” happens, and think there’s no need to make an announcement when things go wrong. Or, they craft a two-line email blast saying “Hey folks, this just happened but no need to panic”. In other words, they celebrate the good, and shove the bad under the rug. No matter how big or small the event, in my experience if it’s negative, people are awfully good at making stuff up in the absence of information. And before you know it, there’s a story circulating that has little resemblance to reality and extrapolates the negative information in the first place.

My rule of thumb is this: if the event has the following characteristics, you need to gather the troops immediately, do an all-hands meeting, explain what’s going on, and be prepared for lots of questions:

• A senior leader is being let go

• More than one person is being let go simultaneously

• There’s bad financial news that has enough of an impact on planned growth

• There’s product news that changes corporate strategy

Explain to everyone what happened, why it happened, and how you plan to move forward. The most important thing to do is maintain trust in the leadership team so they can continue to steer the ship in a direction that’s positive for everybody. Being the CEO means more than blazing a trail, evangelizing goodness, and having a bird’s eye view of the world to bring back to the team. It also means looking after everyone’s best interests and making decisions that aren’t always pleasant. But swiftly addressing those challenges in an open and honest way, and delivering a clear, consistent message to the entire team quickly, is the best way to deliver bad news.