Stephen Knopik knew that the one thing his boss hated more than anything else is defaulting on a bank loan. But one day, he had to break the news that the company was in hock to a bank.
Knopik is the CEO of Bealls, a retail apparel chain. For decades, Knopik worked for Bob Beall, former CEO and the founder’s grandson.
After so many years reporting to Beall, Knopik knew that avoiding debt was of paramount importance.
“He’d said a million times he does not want banks to have leverage over us,” Knopik says.
But Knopik, who joined the company in 1984 and 22 years later became the first nonfamily member to serve as CEO, realized that the company had defaulted on a covenant for technical reasons that had no bearing on its ability to pay. Still, he had to inform Beall.
“I felt like a teenager telling my dad I wrecked the car,” Knopik recalls.
To Knopik’s relief, Beall took the news well. Outwardly, he kept his cool and did not show any anger or irritation even though Knopik sensed “he must have been steaming inside.”
“Obviously I’m not happy about this,” Beall replied, remaining composed. “But let’s figure out where we go from here.”
Knopik views that conversation as a pivotal moment in his relationship with Beall. From then on, he never fretted about delivering bad news. He knew that he could be totally honest, and that Beall would not explode or shoot the messenger.
— Adapted from Making Conflict Work, Peter Coleman and Robert Ferguson, Houghton Mifflin Harcourt.