Bad news is inevitable. If you’re not hearing any bad news as CEO, you have a big problem, and one you need to address, because bad news has to be proactively dealt with…or else.

As the President of Roth Bros., Inc., I demanded to know immediately about any bad news that involved our customers, people, processes–anything. I would always remind our people that shit doesn’t smell better with time. Also, when I had conversations with any of our people, I would ask them straight up, “Is there anything else I need to know?”

Encouraging your team to speak up

As CEO, you set the standard for your team and how you treat people will become the norm throughout the company—whether they’re bringing you good news or bad. This standard and your treatment of those around you will become part of the organization’s culture, whether that’s your intention or not.

It is easy to have a positive culture when things are going well, but oftentimes things go awry. Most CEOs have had a project manager sit on vendor invoices, not dealing with the realities of a growing under-billing situation or forecasting cost-to-complete with overly optimistic assumptions. Or your organization screws up something at a customer’s facility and your people don’t tell you. You only find out when the customer calls you directly.

Your culture around how fast bad news gets to you will depend on whether your people feel safe coming to you–and that rests 100% on you as the CEO.

Create a culture that can handle bad news

As a CEO coach, I believe a team can problem solve any bad news issue once they’re aware of it. But you can’t problem solve something you don’t even know about. People who brought me bad news early were respected and thanked. If there were process improvements that needed to be implemented so an issue would not happen again, those were reviewed after we dealt with the matter at hand. However, I had little use for people who sat on bad news and let a matter only get worse. The culture at our organization reflected my attitudes.

Having a culture where people feel safe discussing bad news says your company faces facts, doesn’t fly off the handle, and that–when honest mistakes are made–people are not yelled at, belittled or fired. This is a culture where problems are solved, not hidden, minimizing costs and exposure; one where processes are quickly put in place for improvement. You know what the other side of the coin looks like: A company that suppresses bad news and yells or belittles those that deliver it will not be able to retain good people and will not be sustainable in business.

Not all news is “bad new” from the CEO standpoint

Keep in mind when considering the culture you’re creating that bad news to the CEO has a materiality threshold. If a technician got a speeding ticket, you don’t need to know about it. However, if a technician was injured on the job, you would want to know that in real time. Moving forward, make sure you put parameters around the concept of bad news, so you are only dealing with issues material to you and your business.

Are you the reason you’re not getting bad news?

If you don’t think you’re getting bad news in a timely manner, I recommend that you start by writing out how you handle bad news generically. Next, jot down examples you can remember of how you handled bad news situations in the past. Reflect on these and determined if there’s room to improve. Really analyze how you have treated people who brought you bad news in the past.

Next, for a month, gauge if you’re getting bad news or people are just telling you what they think you want to hear. If it turns out that you’re not getting bad news, consider telling everyone what your expectation is with respect to being told when something happens (and be prepared to handle it well if you haven’t in the past). You can also consider hiring a CEO coach to talk with you and your people to provide a baseline of where you are and how to get your bad news culture where you want it to be.

Bad news is a fact of life, even in the workplace. How you handle bad news says a lot about your culture and whether or not your company will be successful in the long term. Learn to handle it better and make your expectations clear.