On Friday President Trump declared a national emergency. The market shot up 10% in a relief rally. Why would people be relieved that there was an emergency? Because they already knew we were in one.
Previously they were only getting “happy talk” from leaders — invocations to stay calm, dismissals of the seriousness of the problem, empty reassurances that things would get better. What people wanted was “hard talk” — a recognition of the problem and tangible steps to fight it. When people get Happy Talk instead of Hard Talk, it doesn’t reassure them. In fact, it does the opposite: It causes them to question the credibility of their leaders, which heightens their anxiety and makes them feel rudderless.
There’s a lesson in here for founders. We are not called to lead national emergencies, but we do face frequent existential challenges for our companies, with life-or-death consequences for the business. A recurring problem — probably the #1 killer of startups — is Happy Talk, a basic failure to admit problems until it is too late. All too often, founders don’t make the tough choices until they are almost out of money. Only then does the Board get the real plan, the Hard Talk.
Whether you’re the leader of a company or a country, the problem with Happy Talk is that you can’t get out of a crisis until you admit you’re in one. Once you admit it, you can fix it. If you try to sugarcoat it, you can’t explain why people need to take the tough steps and make sacrifices. Trying to make people feel better by under-selling the problem or over-selling personal assurances never works. It just makes the team feel worse. Leaders only make people feel better by clearly stating the problem, providing a credible plan for winning, and getting the team’s buy-in for that plan.
I understand the dilemma that founders face. Founders have to evangelize constantly to bring the world over to their point of view. They are constantly trying to persuade talent and capital to join an underdog cause. They have to sell so frequently that it can be hard to switch off sales mode. Admitting problems can seem like weakness. Then, when the dam of denial finally breaks, founders sometimes make the mistake of dumping all the existential issues on their team without a plan for winning. That doesn’t help either — it just freaks everyone out. Hard Talk should always come with a plan.
My favorite historical example of a leader who inspired through Hard Talk is Winston Churchill. Churchill was an old backbencher who was surprisingly tapped for leadership in 1940 after the failure of his predecessor Neville Chamberlain. Chamberlain had lost all credibility with Happy Talk — he kept under-selling the Hitler menace, assured people he could personally deliver a deal, and promised “peace in our time.” He invested all of his credibility in a promise that he had no ability to deliver, instead of giving his people a tangible plan for whatever should come, whether it be peace or war.
When Churchill took over as prime minister, he gave a quick succession of legendary speeches that demonstrate the 3-step process for managing a crisis:
First, he acknowledged the crisis with bracing clarity but without panic. He explained that the Battle of France was over and lost and the Battle of Britain was about to begin, with the full might of the Nazi war machine trained on the British people. He made clear what was at stake: the survival not just of “British life” but of “civilization” itself and the prevention of a new “dark age.”
Second, he laid out the tough plan and sacrifices required. All I have to offer, he said, is “blood, toil, tears and sweat.” And: “We have before us an ordeal of the most grievous kind. We have before us many, many long months of struggle and of suffering.” He promised a total mobilization of the country for war. “We will fight on the beaches,” and on land, on sea, and “in the streets” if necessary. A fight to the last man.
Third, he inspired them that the job could be done, the battle would be won, and it would be worth it. “Because without victory, there is no survival.” No matter how long the nation lasted, even a thousand years, people would look back and say “this was their finest hour.”
Churchill’s renown as a leader is based on his command of language, yet he never resorted to Happy Talk. He shows that leaders can inspire without under-selling the problem or over-selling themselves. The key is to always be rooted in ground truth. You can inspire people to succeed and to believe in the probability of their success through a credible plan that recognizes the real challenges and problems.
This is the balance for founders to strike: sell success but don’t under-sell the challenges. Level with your team about the risks, but not without a plan for addressing them. Explain why it will be tough, but also why the fight will be worth it. Explain why you are optimistic in spite of the perils. Hard Talk, not Happy Talk.
If there was ever a time for Churchillian leadership, it’s now.