There's no shortage of bad news coming out of the business world, so it's worth a few minutes to explore some ideas on how to do a good job delivering bad news.

Organizations show their real values and skills when they communicate bad news. The goodwill earned from telling stakeholders how important they are and how much the business cares about them goes down the drain if that same organization screws up the delivery of bad news.
There is no alternative called “Let’s not communicate.” If there’s bad news, it’s certain to find communication channel. Organizations can either step forward at the outset and orchestrate how the news is delivered or step back and react as the information comes out.
If open and honest communication is not part of the organization’s culture, personality, and history, communicating bad news is bad news. Without a well-established framework that supports a dialogue of full disclosure, there’s very little that can be done at the last minute to make the communication of bad news anything other than a disastrous disappointment.
Supervisors and managers must be included early, kept fully informed, and remain supportive. supervisors and managers are the organization’s most important employee communication vehicle. They provide an opportunity for two-way communication that will help lay the issue to rest as soon as possible. If they’re not on management’s team, the game’s over.
Proper planning prevents poor performance. This may sound like a "duh" statement —but it is essential in communicating bad news. In fact, organizations that are good at communicating bad news have contingency plans in case they’re needed. Good planning can’t occur at the last minute.
The worst alternative that management considers is likely to be communicated through the grapevine. In most cases, employees are aware somethingbad is about to happen. This is the main reason the “Let’s not communicate” alternative doesn’t really exist. On the positive side, when the bad news is not as bad as the worst alternative, employees sometimes are relieved to
hear it.
Here's a checklist for getting ready to communicate bad news:
- Describe the news in a clear and compelling manner.
- Explain why the action is being taken.
- Explain how the decision is fair to as many groups as possible.
- Involve a high-status messenger in delivering the message.
- Deliver the message in a timely manner.
- Identify who made the decision and what process was used.
- Describe the effort that went into the decision.
- Outline some of the alternatives that were considered.
- Show that the organization cares about employees.
- Describe what action is required and what, if anything, can be done to change the decision or help avoid the problem in the future.
(Disclaimer: this blog entry is a distillation of papers I have in a file labeled "Communicating Bad News". I claim no ownership and ask forgiveness for not citing proper credit.)