Surprising your manager with a major failure is one of the worst mistakes you can make. You must proactively communicate risks as soon as they arise. This gives your leader time to manage expectations up the chain and prevents them from being blindsided.

Optimize feedback's psychological impact. Deliver negative feedback verbally and in-person to avoid misinterpretation of tone. Follow up on positive feedback in writing, even if delivered verbally, because people cherish and share written praise with friends and family, amplifying its effect.

The objective of a tough conversation isn't just to deliver bad news but to leave the recipient feeling better because an issue is now on the table and can be addressed. Honesty delivered with a coaching mindset builds trust and prevents the damaging shock of a surprise negative evaluation later.

When giving challenging news, leaders cannot just "drop the bombshell and walk out." A successful approach requires three steps: 1) be clear and direct with the news, 2) provide the context and rationale behind it, and 3) stay to connect with the team, showing commitment and outlining next steps.

To manage investor expectations effectively, adopt a contrarian communication cadence. Only report good news (like a major deal) after it has officially closed, since many B2B deals fall through at the last minute. Conversely, report bad news as early as possible. This builds trust by preventing over-promising and demonstrating transparency when it matters most.

The communication event doesn't end once you've delivered a message. You must also have the emotional and mental capacity to handle the subsequent dialogue, questions, and responses. If you lack the energy for the entire process, consider postponing.

Accepting too high a valuation can be a fatal error. The first question in any subsequent fundraising or M&A discussion will be about the prior round's price. An unjustifiably high number immediately destroys the psychology of the new deal, making it nearly impossible to raise more capital or sell the company, regardless of progress.

Instead of trying to find the perfect words, preface difficult feedback by stating your own nervousness. Saying, "I'm nervous to share this because I value our relationship," humanizes the interaction, disarms defensiveness, and makes the other person more receptive to the message.

Leaders often avoid sharing negative news to "not scare the children." However, this creates an information vacuum that teams will fill with the "darkest ideas available" from other sources. Leaders must compete with misinformation by providing clear, honest context, even when it's difficult.