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Concept

Telling it like it is

Telling it like it is is Horowitz's rule for a company in trouble: share the bad news, with the numbers, with the whole team, because a company that cannot hear bad news cannot fix it, and the people who could fix it are the ones being protected from it.

The instinct of a struggling founder is to protect morale by keeping the numbers vague, and Horowitz argues the instinct is exactly backwards. Trust is what lets a leader say hard things without the company panicking, and trust is built only by saying hard things; a team that learns the truth late learns that it was lied to, which is the one thing morale does not survive. There is a second, practical reason: a problem the team can see is a problem more people are working on, and smart people are wasted on problems they are not allowed to know about. Horowitz's version of this at the company level is the culture where bad news travels fast and good news can wait, where the person who surfaces a problem is thanked rather than punished, and where the CEO's job in a crisis is to be the most honest person in the room, not the most reassuring.

A real-life example

A founder in Izmir with four months of runway told her team of twelve she had a year, to keep them calm. When the truth surfaced through a late salary, three people resigned the same week, not because of the money but because of the lie. The founder who replaced her opened every Monday with the cash number on the whiteboard. Nobody else left, and two engineers cut the cloud bill in half without being asked.

How to use it

  1. 1Tell the whole team the hard number this week, in plain words, and say what you are doing about it.
  2. 2Thank the person who brings bad news, in front of everyone, so the next piece of bad news arrives sooner.
  3. 3Make good news wait and bad news travel fast; a company that hears problems early is a company that can still fix them.