In my early journalism classes, I was taught the five “W’s” of good news stories, and that most should be in the first paragraph at that. Who, what, when, where and why are the five, with sometimes a “how” thrown in for those followers of the macabre.

But of the five, “why” is by far the most important for business leaders to consider and communicate. Employees, contractors, even investors want to know why they are asked to make use of their valuable resource to support your effort.

Failure to explain why will scare away potential investors—other than closest friends and family. The same failure will disenfranchise your workforce to a degree that most will give less effort to a project, and certainly with less enthusiasm.

Especially if a company is in trouble, perhaps with an urgent need to make a deadline, or facing a cash crisis caused by something your employees can help control, explaining the importance of the action required empowers all to work smarter and harder to achieve the stated goal.

I’ve recently experienced an example of this. One of my companies where I have an investment and am on the advisory board was in the midst of a sprint to close its acquisition by a larger company before the cash ran out and enterprise value plummeted. Do you tell the employees about the pending acquisition early in order to focus them on increased performance to increase cash flow, or just keep the secret and hope that all would turn out OK and the acquisition proceed to an orderly closing on time?

We chose to tell the employees, with the obvious risk that some would be scared into looking for another job right in the middle of the acquisition process. The effort worked, and all did come together to make it happen. No one jumped, and the buyer closed the deal without a question.

When in doubt, don’t be shy. Tell them why. Your people will rise to the occasion.

SOURCEBerkonomics
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Dave Berkus
Dave Berkus is a noted speaker, author and early stage private equity investor. He is acknowledged as one of the most active angel investors in the country, having made and actively participated in over 87 technology investments during the past decade. He currently manages two angel VC funds (Berkus Technology Ventures, LLC and Kodiak Ventures, L.P.) Dave is past Chairman of the Tech Coast Angels, one of the largest angel networks in the United States. Dave is author of “Basic Berkonomics,” “Berkonomics,” “Advanced Berkonomics,” “Extending the Runway,” and the Small Business Success Collection. Find out more at Berkus.com or contact Dave at dberkus@berkus.com

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