There's no such thing as good news for short sellers. They prey on companies with the hope that the value of their stocks will drop dramatically, based on rumors, lies and/or the occurrence of anything nasty, but rarely due to actual changes in the real fundamentals of the business. They pray for fake news, customer reversals, security breaches and any other apparent "problems."  Once they see a crack in the target business's armor, they promptly tell the media that: "there's never only one cockroach in the ceiling." This, they insist, is because history has shown again and again that problems-- just like deaths and bad luck--come in clusters. The shorts swear that there's always some additional bad (but undisclosed) news about their victims coming right around the corner. And then, the man-made and media-fomented avalanches and the runs on the bank begin.

Of course, in some cases, there's a real public service to outing the crooks and warning the investing public or those others who are soon to be sold a bogus bill of goods. Certainly, the recent case of the allegedly larcenous lovebirds at Theranos is a good example of the cascade of corruption that starts with a quiet leak and turns into a flood and a PR nightmare that is still pouring out with the long-overdue criminal indictments being finally made public. As far as the VC investors, insiders, and window-dressing board members, they can fend for themselves and they probably deserve a fair amount of the grief they have gotten or will soon get. But you've got to feel bad for the hundreds of thousands of patients who these phony pukes lied to about tests and test results and grateful that millions more--equally unsuspecting -- weren't also victimized.

Now, even good companies are always going to have problems and, in many cases, that's not even a bad thing-; it's to be expected as a part of any new business growing and maturing and stumbling from time to time along the way.  The trick for the people running the show is to make sure that they see and hear about all of the problems and concerns as soon as possible so they can be dealt with in a timely fashion instead of letting them fester and get worse. Bad things don't get better by themselves and nothing moves by itself unless it's going downhill. And, the bigger the business, the less likely that bad news will make it all the way up to senior management without being smoothed, sweetened or smothered along the way.

If you want the straight scoop, you've got to make a dedicated effort to go out and get it. And, because even Superman can't be everywhere at once, you've got to build a culture that promotes truth-telling and doesn't try to hide the rotten fruit.  It also helps to actively encourage your people to bring you the bad news right along with the morning coffee. It may not be good for your digestion, but it's a very smart strategy for your business.

Ultimately, this is about the core culture of your company, but you can give things a big push in the right direction if you develop a methodology and an approach to team-based problem solving that you can push out and extend throughout the whole company. There's no single approach that works for everyone, but there are a few basic ideas that you should incorporate in your plan if you want to get the best results.

 So, you've got a serious problem. What do you do?

(1)  Focus first on fixing the problem and coming up with a solution that isn't just a band-aid or a short-term fix. Take the time and spend the money to do it right the first time so you don't have to fix it over and over again.

(2)  Separate what caused the problem from who caused the problem and who's responsible for it. Those personnel conversations can come after you extinguish the immediate fires.

(3)  Remember, once you get in the habit of fixing these things effectively and quickly, you discover that people just want to get over the hiccup and get on with building their business and they don't have a lot of time to sit around pointing fingers at each other.

(4)  Everyone on the team needs to own a piece of the process and accept personal responsibility for helping to devise a concrete solution. Trying to pass things off to others - superiors or subordinates - or pretending that it's not your problem isn't an acceptable position. It's everyone's problem until the problem is solved. All hands need to be on deck.

(5)  Once the team agrees on the remedy, everyone gets going and is responsible for implementing their part of the plan and the solution. Waiting to be told what to do and how to do just won't do anymore. If you need specific authority, or resources, or personnel, go ask for what you need instead of sitting around and hoping that these things will take care of themselves. They never do.  

(6)  When it's time to look backwards, make sure that it's not all about the blame game. The idea is to learn from the mistakes and to apply that learning going forward to prevent reoccurrences or similar problems.

If you do this correctly and do it consistently, you'll build a business that learns from every step and stumble as well as all the good news in the journey as it grows. But even more importantly, you'll keep the inevitable sprinkles and slips from turning into storms and in-house strife.

Published on: Jun 27, 2018