I’ve always been partial to Thumper’s dad’s advice about communication. In case you don’t recall it from Bambi, it runs along the lines of, “If you can’t say something nice, don’t say nothin’ at all” -- at least as Thumper recalled it.  
This is pretty good advice for small talking animals, but it’s a really bad way to run a company.  You can’t build a successful business based on a culture that values quiet, courtesy and consensus over honest conversation, constructive criticism, and, where necessary, confrontation. 
As long as people are arguing for the right reasons, an aggressive culture where people stand their ground and argue their cases makes for much better decisions than one in which people paper over their differences with white lies and pleasantries. Make your point, say your piece, and sit your butt down. Don’t argue with the truth.  
The truth doesn’t have a time of its own. There’s never a better or best time to tell someone the truth. The time for truth is always now. 
It all comes down to a few simple rules you need to share, somewhat obsessively, with all of your people on a regular and recurring basis. 
Tell the Truth
Give it to me simple and straight. Figures don’t lie, but they often don’t tell the whole story. Make sure that the metrics don’t get in the way of a clear message. As they say, everyone is entitled to their own opinion, but the facts are the facts. You don’t get to pick and choose them. 
Tell It Timely
Nothing ugly improves over time. Don’t wait to bring me bad news. The sooner and shorter the better. Nothing elaborate - just accurate information delivered on time and in time.
Tell Everyone   
Don’t assume that everyone else necessarily knows what you know. Spread the word. Going wide makes it more likely that meaningful and actionable information will also get to people who need it, whether you realize they need it or not. 
Tell It ‘til Someone Listens
I don’t think that, in most businesses, you can ever over-communicate relevant and time-sensitive data. But you will often encounter people who either don’t want to say unpopular things, or don’t want to hear difficult news. These folks typically follow the standard three-step routine in dealing with inconvenient facts. First they aggressively ridicule; then they violently resist; and finally they get with the program.
Tell It All the Time
Truth-telling is not a sometime thing. It’s an everyday, all-day part of creating and maintaining an environment where things continue to improve through a constant iterative process. You can’t make innovation through iteration work if you don’t have a constant and accurate flow of data telling you what’s working and where you’re going wrong.