Episode: How to Communicate Sensitive Information

Megan Hyatt Miller: Hi, I’m Megan Hyatt Miller.

Larry Wilson: And I’m Larry Wilson.

Megan: And this is Lead to Win, our weekly podcast to help you win at work and succeed at life. Today we’re going to talk about a communication challenge that can really cause some big problems for leaders: how to manage the flow of sensitive information without causing confusion or mistrust.

Larry: This is a brutal dilemma, Megan. I know you’ve faced it. I’ve faced it as a leader. On the one hand, you want to be transparent. You want to share everything you can with people, but on the other hand, some information is really sensitive and potentially damaging…a negative quarterly financial report or upcoming layoffs or major changes in your product line. You obviously want to be up front with your team and your customers, but how and when you share information can be critical. Honestly, there are a couple of ways to mess this up.

Megan: There really are. You can leak the information too soon, and it can make people panic, and then you have a chaotic situation on your hand, or you can withhold information, and that causes suspicion and rumors and it’s a whole other big drama. I mean, this can really go sideways in countless ways. Because of that, today we have a really good solution for you. We’re actually going to give you four steps that are going to take all the stress out of making major announcements within your company. I’m so excited to talk about this, Larry.

Larry: Megan, can I share a story with you?

Megan: Please do.

Larry: Well, I have seen this not done well. In fact, a friend of mine was in an executive position with a nonprofit organization, and there was a reorganization in the works. That’s pretty common. Everybody gets a little bit nervous. You know, needles and pins. You don’t know who’s going to be affected, maybe your job. Well, everybody wanted to keep things confidential as they began to roll this out, because you don’t want the news to leak too soon. You want to do things in the right order.

When the day came, the reorganization plan was announced to senior staff. A group of 15 or 20 people, I think, were in the room. They announced, and they laid out the whole plan, which, as you might expect, called for the elimination of a handful of positions. Somebody raised their hand and asked, “Have all of these people been notified?” The answer came back: “Yes, they have. They’ve all been notified that their position has been affected.”

But guess what: they had not all been notified, and my friend who was sitting in the meeting found out that his position was written off the org chart when the thing was rolled out to everybody else. Talk about a morale killer for an organization. To be fair, I don’t think anyone did that intentionally, but wow! did it really damage trust.

Megan: Yeah, it sure does. That’s what I would call a negative surprise, and that’s the exact thing we want to avoid when we’re thinking about how to plan for these big communication events. I don’t think most leaders withhold information out of ill intent. They think they’re doing what’s best for their team. Maybe they’re trying to protect them or prevent a loss of morale, and they think they can handle it best if they don’t burden anybody who doesn’t directly have control. That’s kind of the rationale.

Or they just think people are too busy or they think they’re too busy to solve all of those problems yet. They’ll get to that later. You know, kind of how it flows down through the team. But sometimes what happens is they’re so busy they forget to communicate about the decision, like what you’re talking about, Larry, in your story. That is a common story. I think if that hasn’t happened to you, you probably know somebody that has happened to.

It’s just a disaster waiting to happen, because in the absence of information, people make up their own stories. This is where rumors get started. It’s just human nature. We’re trying to make sense of what’s happening around us. As a leader, sometimes we can kid ourselves into thinking we’re more discreet than we actually are.

People pick up on our tone of voice or the side whispery conversation we’re having while we’re getting our coffee, and they start to infer all this meaning so they can make sense of it. The problem is, as a leader, if you don’t supply the narrative, then people are going to invent one on their own. Because they feel vulnerable, they’re going to be inclined to interpret things negatively out of self-protection. So this is a real problem if you don’t do it intentionally.

Larry: At the same time, though, would you say there is such a thing as providing too much information to people?

Megan: Sure. I mean, this is one of the things I always think about when I’m in a situation like this. “What do people need to know? How do we avoid these negative surprises?” That is always my goal. If we’re going through anything that is some kind of change management situation, I want to avoid people being flat-footed in a meeting, like in your story, where they get surprised negatively in a way that would be humiliating. That’s what I want to avoid.

At the same time, I don’t want to burden people with confidential information that is not necessary for them or that would create fear and uncertainty in a way that they don’t have any control over and there’s nothing actionable to do. It doesn’t really affect them or their job. It’s just kind of in the air, and that’s really something the leader should carry. So I think a lot of wisdom is needed in this. This is not a formulaic kind of situation.

Larry: Well, you do that so well here at Michael Hyatt & Company, Megan, with a technique you call cascading communication, and that’s what we’re going to show people today: the four steps to releasing information in a way that’s thoughtful and predictable so that you build trust rather than erode it. I want to mention, everything we’re going to talk about today is coming straight out of your dad’s new book No Fail Communication: 13 Workplace Communication Problems and How to Fix Them.

Megan: I’m so excited about this book, because this is one of the things at Michael Hyatt & Company that we’re really passionate about, and that’s because good communication, healthy communication, builds healthy culture. You really cannot have a healthy, thriving culture where you have people in a position where they can execute on goals and achieve great things if you don’t have good communication. It’s just mission-critical.

This book, as you said, is coming out on May 19, and if you want a flavor of the book, we have a little surprise for you. My dad has been working on a series called Clear Communication Tips. These are daily tips for clear communication in your business, and you’ll get a fresh video tip every day for a couple of weeks. This is so cool. I’m so excited about this. You can get that at or just check today’s show notes for the details.

Larry: Well, today we’re saying that you can provide important information to your organization in a thoughtful, predictable way using cascading communication. We have four steps for doing that, so let’s get to step one: decide what to communicate.

Megan: This is key. This is where it all starts. The goal here is to ensure that the people who need information are going to have it. That sounds simple, but it’s easier said than done, and that’s why we’ve devoted a whole step to this. As a general rule, we think you want to default to transparency. If you have a tendency to maybe avoid sharing information, I want you to think about this for a second. Secrecy actually breeds suspicion, but transparency builds trust. When people are included, they feel respected, and when they’re trusted, they trust in return. I think those are all things, as leaders, we can lose sight of, but they really are true.

Larry: Megan, I think this can really be a self-awareness point for leaders. If you feel yourself wanting to clamp down on information, it maybe is the time to look inside and ask, “Why do I feel that need? What’s driving that?”

Megan: Yeah. I think that’s a great point. Sometimes it comes from just not having a plan. You don’t feel like you have a clear path to deal with the objections people are going to have or the pushback you’re going to get, and all of that can be resolved in careful planning of this cascading communication.

I think once we’re through the end of these steps you’re going to see how you go through this so you don’t have some of those things that maybe you’re afraid of. But I think that’s right. Just asking those questions about what your motives are and what’s really going on for you, if you’re avoiding that, can be really helpful.

So, here are a few questions you can ask as you’re thinking about deciding what to communicate. “What do people need to know in order to do their jobs, trust their leaders, feel committed to the organization, understand the reason for a major change, remain calm during a downturn or a crisis, feel valued, or embrace change?”

A minute ago, Larry, you said self-awareness was needed on the part of the leader. I think these questions are about empathy. You’re putting yourself in the position of the people you’re leading, and you’re asking what’s relevant in their situation. What matters to them? Honestly, it’s very similar to how we think about marketing. Good marketing always addresses the concerns of the people you’re trying to sell to.

In a way, you’re trying to sell change of some kind (something significant is happening that you need to communicate) to the people you’re leading. So you need to understand what matters to them. For example, in the crisis we’ve just been through with the COVID-19 situation, a lot of people were worried about losing their jobs.

Now, that may not be a consideration if you’re the leader, because you understand your cash position, you understand your liquidity position, you understand all of the resources you have and that that’s not a concern or if it is a concern you know what your plan is, but your people don’t know any of that. They’re just thinking about their own survival.

So, if you were to go back in time and you were going to communicate about that crisis and your company’s response to it, if you were able to think about it from the perspective of someone who was really concerned about whether or not they were going to have a job in the next two weeks, that would probably influence how and what you communicated. Right?

Larry: It sure would. It was nice to hear, “We’re not thinking of layoffs right now.” “Oh, good. Because I am.”

Megan: Right. And we actually said that. In fact, I think we’ve said that in every team meeting we’ve had week over week over week, because we understand that’s what people need to know as they’re thinking about their personal sense of security. We have to address that.

Larry: So, step one in cascading communication is to decide what to communicate. Remember, the aim is to ensure that the people who reasonably need information will have it. That brings us to step two: get the message right.

Megan: This is also really, really important. I would say, the biggest thing with getting the message right is clarity. Clarity is key. I think we’ve all seen, recently, examples of this being done well by public officials. There have been many people who have been sharing information with us as we’ve gone through this COVID crisis. Some have been very explicit in their communication, and the clarity they provided, even if it was bad news, felt really helpful. You kind of felt like, “Okay. There’s some certainty. Even if it’s not good news, it’s some certainty.”

On the other hand, there have been very ambiguous communications we’ve heard, too, that have created confusion or more uncertainty. Having clarity about what you want to communicate and then communicating with clarity is really, really important. You don’t want to move so quickly as you’re developing your communications that you create a situation of mixed messages. This is really easy to have happen.

You want to take a minute to think about this, to decide, “Okay. What am I communicating? How do I want to say it? What are the words?” For example, in my situation, I almost always write these out as a series of talking points, whether this is something I’m communicating in writing or video or in person when we’re back to more of a different time. Every single time I communicate, I’m writing my thoughts out so I’m able to objectify them and make sure they’re clear.

Then I’m going back to step one (decide what to communicate), asking those questions of, “Okay. Am I seeing it from the perspective of the people I’m talking to? Am I answering all of their questions?” So hopefully, at the end of what I’ve communicated, there aren’t a whole bunch of open loops for them. They understand what it means for them and all that. You’re not going to be able to do that well unless you communicate with clarity.

For example, again, looking back to this COVID crisis we’ve just been through. Put yourself back in that head space of trying to figure out how to communicate with your team. For example, what we ended up saying to our team was, “We are pivoting to new products, and we’re not contemplating layoffs at this time.” We were that specific. We wanted to make it 100 percent clear. However, we could have said something like, “The economy is incredibly uncertain, and we’ll let you know later if you still have a job.” Can you imagine?

Larry: I’m glad you didn’t say that.

Megan: I know. Me too. But can you imagine how that would feel if you were on the receiving end of that? You know, you have to go home and have dinner with your family, and they’re all like, “How did it go today?” and you’re like, “I don’t even know.” At that point, now you’re going to invent the narrative. “I’m pretty sure I’m getting laid off. I’m pretty sure when I go tomorrow I’m not going to have a job.”

That whole conversation in your head starts going, and you’re trying to make sense of it and trying to make meaning, because someone else whose job it was to give you clarity (and that’s the most important component here of getting the message right) didn’t do their job. So just remember that. You can reduce a lot of anxiety and sideways energy if you just communicate with clarity on the front end.

Larry: A few more tips for getting the message right recommended by Michael in the book No Fail Communication. “Get straight to the point, especially when delivering bad news. State your primary reasons for the decision and make them clear and simple.” Boy, I’ve learned that one the hard way. You find the main rationale for what you’re doing and put that forward to people. They don’t need to know all of the layers that may have gone into that decision. “State what’s not changing, not just what is changing.”

Megan: This is especially true to do… Of course, my dad says more about this in the book, and it’s really worth digging into this point, but when you’re thinking about this, you want to talk about this from the perspective of the people who are listening. Like, in our earlier example, what’s not changing with their jobs. That’s the most present one to us right now, but that’s really important to speak to.

Larry: One final tip I’ll share here today: “Ask everyone who will be communicating to deliver the same message.” In other words, have the whole choir singing from the same songbook so that one message is being put throughout the organization. I have a question about that one, Megan. There could be senior leaders who don’t necessarily agree with the course of action you’re taking. Is it reasonable to expect them to all be giving the same message?

Megan: Yes, but after a certain amount of discussion has taken place. We’re really talking about alignment here. When you’re moving forward on a message, what you want is everybody to be aligned. Meaning, everyone is kind of standing together shoulder to shoulder, supporting the message the leader has shared. However, that doesn’t mean they necessarily agree with it. This is a tricky distinction. Agreement is not necessary to have alignment, but in order to have alignment you have to make space for dissent, for disagreement, for debate prior to the part where you ask people to be aligned with you.

If you just kind of demand that your team gets on board before having the opportunity to push back and express their concern or opinions, first of all, the alignment is probably going to crumple very quickly once they get out of the boardroom or the conference room, but second of all, they’re not going to be able to support you and stand behind that message once they have to defend it against their team because it hasn’t been battle-tested.

Larry: Step one: decide what to communicate. Step two: get the message right. Now step three: determine who needs to know and in what order.

Megan: This is key, because this is where the rubber meets the road with cascading communication. This is the whole big idea. Now you have your message. You know what you want to say. It’s clear, but how do we get it out and all the way down through your organization? Well, it needs to flow from the top to the bottom, and the order is critically important. If you mess this up, it doesn’t matter how good the message is, how clear it is. It will all fall apart, and you will have all kinds of problems.

The people who should be informed first are at the top, and this is really when you’re still in the phase of, “Okay, Larry, I’m coming to you on my leadership team or my executive team with what I think is the messaging I want to share with the rest of the team, but I want to talk about it and make sure we’re aligned first.” You may push back on me and say, “I really agree with you on points one and two, but I think the third one has some big problems because you didn’t think about this over here and how the sales team was going to respond to it.”

“Oh my gosh! Thank you, Larry, so much. I so appreciate you giving me that feedback, because if I had just gone straight to the sales team, I would have been unprepared for their concerns.” This is when not only are you aligning everybody at each layer of the company, but also, at the highest levels, you’re getting feedback so that by the time you get all the way down to the largest group of your team, everybody is on the same page, all of the objections have been answered, the message is absolutely clear, and you know with confidence your team will be able to align around it.

Larry: A question for you about that. When you’re getting feedback at that level, does that affect the decision or just the communication of the decision?

Megan: I would say, mostly it affects the communication, but occasionally it affects the decision itself. Maybe what seems abundantly clear and like the right decision or strategy to you, once you get some input from those closest to you in your organization may not be so obviously true, and that’s okay.

I think this is a place where a leader has to do that weird dance between confidence and self-assurance and humility. You need to come into the situation with a reasonable amount of confidence. You’ve done the heavy lifting. You’ve thought through the message. You’re confident that this is the right thing, but you have to be humble enough to hear from your people or you’re going to pay for it later. So, it’s kind of both at the same time, I would say.

Larry: Let’s talk about an example in real life. Let’s imagine a financial report. Just for the sake of argument, let’s say it’s a negative financial report. Otherwise, it’s pretty fun to share. But let’s say there’s a financial report that’s not going to sit well. How would you roll that out through a company? What would the cascade look like?

Megan: This is a great question and probably something every leader has been through many times. First of all, the CFO would come to the CEO and share the full financial report. There’s no confidentiality. There’s no worry about needing to be formal in your presentation or particularly professional. This is just a very candid conversation about the financial results. Then, the next step would be for the CEO and the CFO to meet with the executive team and also share the full financial report.

At that point, the CEO has tried to ask all of his or her questions of the CFO so that he or she is prepared to answer the questions of the executive team to the best of their ability. We’re trying to be prepared with every layer we go down to answer questions, to address the specific concerns. The communication gets progressively more formal and professional with each layer you go. It’s most informal at the very top and the most formal at the bottom.

Once that conversation has happened with the executive team, reviewing the full financial report, then you would bring the department heads into the conversation. They’re seeing maybe more of a summary report with some departmental detail, you know, the things they’re actually accountable for personally. That’s really important.

Then, finally, you’re going to meet with the rest of your team in an all-team, all-hands-type meeting and share a simplified summary report, remembering that this is not a group of people who necessarily have financial acumen. This is not a group of people who necessarily understand financial terms. You’re going to need to speak in plain language.

You’re going to need to speak to what this means for them. You’re going to need to keep things simple. One idea per slide is what we recommend. That’s a best practice in general when you’re talking about developing presentations for a general audience. Some of these kinds of things are really important, but you see it’s like a stair-stepped approach to communication.

If there were, as a part of this, any kind of projects that were being killed or projects that were being started or staffing changes that were a part of this (obviously, that would be a more extreme scenario), you would want to make sure to not only include the people who are at each level of the organization in a successive fashion, but you would also want to make sure you’ve spoken to key stakeholders. For example, anyone whose job is being eliminated or whose responsibilities are substantially changing, anyone who has a reporting relationship that’s changing, any expenses that are being cut that people might be particularly attached to.

All of those things should be addressed before you’re at the level of the entire team in one place at one time, because, again, your goal, how you define a win, is knowing that you’ve gotten to that place and everyone is in the same room and no one is negatively surprised and the team is able to get aligned around the message of the CEO or whoever is communicating it.

Larry: Let’s say, for example, I’m a department head or a manager and my budget is getting cut in half. I would be informed of that ahead of the other department heads.

Megan: Exactly. Because, again, if you’re in that meeting, Larry, and you’re with your peers, you don’t want to be caught flat-footed. You want to be able to say, “Yep, I had a great meeting with Megan beforehand, and we talked about this at length, and here’s why I feel good about that” or “Here are the decisions I’m going to need to make as a result. I already have the meeting with my team scheduled to talk with them about it.”

That puts them in a place of confidence and the ability to have their dignity retained. When someone is caught flat-footed, not only can it be humiliating, but they can lose standing with their peers if they’re in a place where they’re not prepared to answer questions or respond in the moment. We never want to put people in that situation.

Larry: Okay. So, let’s say we’ve gotten our message right. We’ve decided who needs to know. Let’s come to the point of actually rolling this out.

Megan: Larry, I think the key things to remember are, first of all, the purpose: to inform those who need to know at the right time. Secondly, to communicate with leaders in order of their purview or authority. So, from the senior to the most junior. To communicate with people in the order they’re affected, most affected to least affected.

And don’t forget to remember the individual contributors if you’re thinking about this from a team perspective. Don’t forget about the individual contributors, because sometimes they fall outside the scope of a team. Then, to communicate the amount of detail that’s needed for each level (and it’s going to be different), and then to remember that transparency builds trust.

Larry: So, step three of cascading communication: determine who needs to know and in what order. The fourth and final step is: clarify as needed.

Megan: This is a good one, and I think this is one that leaders tend to avoid, because it can be unnerving to do what I’m about to suggest. No matter how hard you work at crafting your message, there are going to be questions. There are going to be either things you forgot or particular concerns of individual contributors or people that need to be addressed.

Don’t be afraid of this, though. I would much rather somebody ask me the difficult question to my face than talk about it behind my back or with their peers when they have no way of getting the right answer, the true answer. They’re just going to start making it up to try to answer it themselves. So, while this may be uncomfortable (the more you do it, the less uncomfortable it gets), this is a great way to make sure you’re in control of the narrative and that the narrative is accurate as opposed to totally subjective and just based on people trying to figure it out.

At each level, you’re going to want to incorporate the feedback you get into your messaging for every succeeding level. Like I said earlier, it’s going to be the most informal at the beginning, the least baked at the beginning, and you’re going to be able to incorporate things so you really get it tightened up by the time you reach the entire team and communicating with them.

You want to plan time for feedback and questions. This means you’re going to need to plan time at the end of these conversations. Don’t just make this, at each level of this cascading communication, a one-way informational meeting where you’re reading your bullet points and then that’s the end of the meeting. You want to give people a chance to respond. People need to feel like they’re included to feel valued.

Larry: Megan, some people have the best intentions on getting feedback, but it just does not go well. I have a friend who worked at a very large educational institution. It was decentralized, multi campuses. Again, a reorganization, a restructuring in the works, and after a full year of study, they rolled out their restructured educational plan.

Since it was a decentralized institution, it was all done by video, everyone watching remotely at their campus. At the end, as you said, they preserved time for questions. When it came time for questions, the president of the institution introduced her administrative assistant who read a list of softball questions that the president answered.

Megan: You can’t see me right now, but I’m doing a big face-palm, because this is a disaster.

Larry: It was a disaster.

Megan: Oh gosh. This story, unfortunately, is not uncommon, and that’s because people feel really intimidated by this. When they ask for feedback, they feel so insecure, and part of that is because, as a leader, you feel vulnerable. You’re sharing something that you’re hoping is going to go okay and you want everybody to be aligned around, so it’s really unsettling to open up the whole thing and let people see inside and then solicit their feedback.

Here’s the thing: when we’re thinking about alignment, we want people to be willing to go along with us and to support us. That’s the endgame. They’re on the same page. They understand our rationale. They may not agree with it, but they can get behind it. That’s really what alignment is. The problem is it’s going to be really hard for somebody to get behind something they don’t agree with and trust you if they don’t feel like they’re heard. The only way they can feel heard is if you’re able to hold that space and listen non-defensively.

It’s admittedly challenging to do this, but it’s so important, and in your case, in the great example of that story, it saves you so much grief in the end, because the change you’re trying to effect is actually going to have a chance of taking root as opposed to people kind of cynically rolling their eyes when you say something like, “We got the feedback of our team as we were thinking about this,” and they know you really didn’t.

Larry: So, today we’ve learned that you can manage important information using cascading communication. Just follow these simple steps:

  1. Decide what to communicate.
  2. Get the message right.
  3. Determine who needs to know and in what order.
  4. Clarify as needed.

Megan, what’s your final thought today?

Megan: This is a really important topic. I think this is an area where leaders can go really off course, and most of us were not taught how to do this. Even if we went to business school, even if we have a lot of experience, it’s kind of trial and error learning here, but I think if you follow these simple steps, what you’ll find is that your ability to get your team aligned and then move them forward to execution is exponentially greater than it would ever be with a more ad hoc approach or an over-controlling approach. Either one of those is problematic.

So, I would encourage you to work these steps. What you’ll see happen is that your direct reports and the people on your team are not only going to have more respect for you; they’re going to feel safe with you, because they’re going to feel like they can really trust you not to surprise them. They can really trust you to read them in when they need to be read in on something, and they can really trust that we’re all on the same page moving in the same direction together.

I’m a big believer in cascading communication, and if this is your first exposure to it, I hope you’ll give it a try, and I hope you’ll get the book No Fail Communication, because this is just a taste of the strategies we share there that I think are so, so helpful and so practical for business leaders.

Larry: Thank you, Megan, for sharing your insights on this topic. I just want to remind all of our listeners that you can get Michael’s Clear Communication Tips, daily video tips for the next couple of weeks on clear communication drawn straight from No Fail Communication. So sign up for that at

Megan: Awesome. Thanks, Larry, and thank all of you for joining us today. We’ll see you right here next week. Until then, lead to win.