Great, Good, Bad & Ugly
Never send a status update without context, as it leads to misunderstandings. Here is a lightweight way to add context to anything.
For better or worse, a lot of business leadership is providing status updates. You can automate the measurement and display of information about how your business is doing (metrics, etc), but status is more than just information. Status is how to interpret the business. Are conversions going up good? Are these longer deal cycles bad? You need to provide color to make the information make sense.
As a leader, it’s tempting to start thinking everyone has as much knowledge and context about the business as you do. You don’t always see your own expertise, and you might not realize that you are the foremost expert in the business. Any status update should be easily understood by a new employee who just joined the company, and they will not know nearly as much as you do. Learning to put aside your expertise and explain status to others is an important skill that often does not come naturally.
If you are not careful, going through that learning process and providing status updates can consume far too much of your time. You want to avoid delivering status in meetings as much as possible, as it’s very time intensive, but how do you provide status in written formats that doesn’t take forever to write?
One framework is to preface any status update with the following outline:
Great - What is driving growth in the business?
Good - What is going better than expected?
Bad - What is going worse than expected?
Ugly - What is threatening to hurt the business?
Here’s an example of the start to a status update for the investors in a consumer clothing marketplace company:
We just hired a fantastic new CMO, who has experience in scaling marketplaces like ours. They have already helped reposition our messaging and refocused our ad targeting, and more changes are to come as they put their plan into action.
Our customer acquisition cost (CAC) has gone down from $5.60 to $4.90 due to some improvements in our targeting and funnel design. This means customers become profitable for us in just 2 months instead of 3.
Our new preview feature just launched ahead of schedule, and is already seeing high engagement.
We’re seeing a dip in the number of items on our platform, as it seems sellers are having supply chain issues in getting new inventory. If this continues, our marketplace volume will start to decrease next quarter. We are working to diversify our seller network to avoid any concentrated risk here.
One of our competitors just dropped their fees for sellers in an attempt to lure ours away. We believe our larger buyer network means the sellers will stay on our platform, but if not we might have to reduce our prices to compete which will affect our unit economics.
The update would also include metrics and other information, but this initial framing makes everything else much easier to understand. In fact, you know almost everything you need to know about what’s changing in the business just from those bullet points! That’s the power of effective communication.
This kind of status framework sounds simple, and it is, but it can radically improve the comprehension of your status updates. The easier your status updates are to understand, the less time you need to spend explaining them and the more time you have to go back to operating the business. That sounds like time well spent.
The Humor Point