How to (and how not to) Break Bad News

November 25th, 2008

I have been a micro-lender to Kiva.org (nano-lender might a more accurate description of the loans I have made) since I met and was inspired by co-founder Matt Flannery a couple years ago.

I have made a couple of loans in that period, all of which were paid back quietly and timely.  I got updates on the borrower‘s businesses and it seemed like the loans had helped the borrowers a lot.  So far so good.

I got an email this evening regarding my most recent loan, which was partially repaid several months ago, but has been quiet for a long time.  The message said:

After detailed investigation by Kiva representatives, our team has determined that further repayments on your loan are highly unlikely.

The message goes on to say that 95% of Kiva loans are repaid.  Default on this loan doesn’t bother me much and I will continue to lend through Kiva.

What I liked about the message was it simple directness.  It didn’t try to sugarcoat the message.  It just came out and said “it didn’t work”.

At the same time, I had to click a link in the email to get all the facts.  In this case it was not that the entrepreneur I lent money to went out of business, but that the field partner they worked with in the country had systematically over-requested loans and kept some of the cash for itself.

This is a more serious problem for Kiva.  I really appreciate their candor in telling me I am not likely to get my money back, but if I hadn’t clicked through I would have gotten a completely different view of the problem.

I don’t mean to bash Kiva here.  They do fantastic work.  Still, the way to deal with setbacks in my book is to acknowledge them and let people know how you are going to avoid them happening again (note- this applies to multinational banking companies as well as microlenders).  I have definitely had my share of errors and setbacks, and I have found that the best way to deal with them by far has always been to address them promptly, fully and with a solution in hand.

Reblog this post [with Zemanta]
Tags: , ,
  • Comments Off on How to (and how not to) Break Bad News