How to Lead When the Numbers Are Not Good

Every leader has had the moment. You open the report, look at the numbers, and feel your stomach drop. Revenue is short. Margins are thin. The projection you shared with the board three months ago now looks like fiction.

I’ve been that leader more than once. Running a commercial roofing business that grew to $15 million, then a multi-market operation that hit $35 million, I learned that bad numbers aren’t a failure of leadership. How you respond to them is where leadership actually begins. What separates the leaders who survive bad quarters from the ones who don’t comes down to three things: speed of acknowledgment, transparency with the team, and discipline in the response.

TL;DR: Every leader has had the moment: you open the report and your stomach drops. After growing businesses to $15M and $35M in revenue, I’ve learned that bad numbers aren’t a leadership failure. How you respond is. Speed of acknowledgment, transparency with the team, and discipline in the response are what separate leaders who survive bad quarters.

Don’t hide the numbers

The first instinct when numbers are bad is to spin them. To find the one metric that looks okay and lead with that. I’ve watched leaders do this, and I’ve done it myself early in my career. It never works. Your team isn’t stupid. They can feel when things are off. And when you sugarcoat the reality, you lose credibility that’s very hard to earn back.

At Penebaker Enterprises, we had a quarter where two major projects went sideways simultaneously. Material costs spiked, a subcontractor defaulted, and our backlog was thinner than it should have been. I sat my team down and said: “Here’s where we are. It’s not where we want to be. Here’s what I think we should do. What am I missing?” That conversation was uncomfortable. It was also the turning point. Transparency works even when the news is bad because people can handle hard truths. What they can’t handle is the feeling that they’re being managed, that someone is controlling what they know. When I laid out the real numbers, two things happened. First, the team stopped guessing. The rumors and side conversations dried up because there was nothing to speculate about. Second, and this surprised me, people started solving. A crew lead suggested rebidding a project we had written off. That single idea recovered about 40 percent of the revenue we had lost. He never would have offered it if I had kept the situation to myself.

The 72-hour rule

Over the years I developed what I call the 72-hour rule for bad numbers. The moment you realize the numbers are off, you have 72 hours to do three things.

First, verify. Make sure the data is right. I once panicked over a revenue shortfall that turned out to be a billing timing issue. Two invoices were sitting in draft status. That taught me to check twice before sounding any alarm.

Second, identify two or three immediate actions. Not a full recovery plan. Just the first moves. At Penebaker Enterprises, that usually meant accelerating receivables collection, pausing discretionary spending, and calling our top three prospects to move proposals forward. Small moves, but they created momentum.

Third, communicate. Tell the people who need to know. Your leadership team, your board, your key reports. Not with a polished deck. With honest words. “Here’s what I see, here’s what I’m doing about it, here’s what I need from you.” That formula has never failed me. The 72-hour window matters because speed signals control. Waiting two weeks to address bad numbers signals denial.

Separate the problem from the people

When revenue is down, the temptation is to look for someone to blame. The sales team isn’t closing. The ops team is over budget. Marketing isn’t generating leads. Sometimes those things are true. But blaming people in a moment of financial pressure creates fear, and fear makes people defensive, not productive.

The better approach is to separate the structural problem from the performance problem. Ask: is this a market issue, a process issue, or a people issue? Most of the time it’s the first two. The market shifted. The process didn’t keep up. Fix those first, and you’ll usually find the people were doing their best inside a broken system.

I write more about this in my piece on what building a $35M operation taught me about leading people. The short version: people problems are real, but they’re rarely the first thing to fix when numbers are bad.

Focus on leading indicators

Revenue is a lagging indicator. By the time the number hits your P&L, the decisions that created it happened weeks or months ago. When you’re in a tough stretch, the worst thing you can do is obsess over last month’s revenue. You can’t change it.

What you can change are the leading indicators: pipeline activity, proposal volume, close rates, project efficiency, customer satisfaction scores. At Roofed Right America we tracked these weekly. When revenue dipped, I could usually trace it back to a leading indicator that had softened 6-8 weeks earlier. That knowledge is power because it gives you something actionable.

Now at Great Day Improvements, managing four markets across the Upper Midwest, the same principle applies at a different scale. I look at the leading indicators first. Always. The lagging numbers tell you what happened. The leading numbers tell you what’s about to happen. A concrete example: at Penebaker Enterprises we lost a senior estimator unexpectedly. Within three weeks our proposal volume dropped 40 percent. Revenue didn’t show the impact for another six weeks, but by then it was too late to recover the quarter. If I had been watching proposal volume as a leading indicator, I would have seen the drop immediately and could have redistributed the workload or brought in contract support. That experience is why I now run a five-indicator Monday dashboard at Great Day Improvements: leads generated, appointments set, proposals issued, close rate, and average ticket size. If any of those move more than 15 percent in either direction, we investigate that week, not next month.

The conversation nobody wants to have

Sometimes bad numbers mean hard conversations. Budget cuts. Headcount reductions. Project cancellations. I’m not going to pretend those conversations get easier with experience. They don’t. What changes is your understanding of why they matter.

Having the conversation early, when you still have options, is better than having it late, when you don’t. I learned this the hard way at Penebaker Enterprises. I waited too long to make a staffing adjustment because I didn’t want to let people go. The delay cost more jobs in the end than acting early would have. That lesson stuck.

If you lead people, you owe them honesty about where the business stands. That’s not pessimism. It’s respect.

When the fix takes longer than a quarter

Not every bad quarter is a quick fix. Sometimes the problem is structural, and acknowledging that is its own form of leadership. At Roofed Right America we went through a stretch where material costs escalated three quarters in a row. Our margins compressed from 32 percent to 19 percent. No amount of sales volume was going to fix a pricing structure that hadn’t kept pace with the market.

The fix required renegotiating supplier contracts, adjusting our bid templates, and retraining the estimating team on new margin targets. That took two full quarters to implement. During that time I had to communicate a difficult message: we’re doing the right things, the results will lag, and I need your patience and your trust.

What made that period survivable was setting visible milestones along the way. Instead of saying “margins will recover eventually,” I said “by the end of next month, our new bid templates will be live” and “by Q3, we expect margins back above 25 percent.” People can endure a long recovery if they can see the checkpoints. It’s the ambiguity that kills morale, not the timeline.

What this looks like on stage

When I speak about leadership under pressure, the “bad numbers” section always gets the most engagement. Because every leader in the room has been there. They know the feeling. What they want is someone who can name it without flinching and share what worked without making it sound easy.

Bad numbers don’t make you a bad leader. Pretending the numbers are fine when they’re not? That makes you a bad leader. The difference between the two is everything. Early in my career I made the mistake of projecting optimism without a plan behind it. I would tell teams “we’ll be fine” because I thought that was what leaders were supposed to say. It wasn’t leadership. It was avoidance dressed up as confidence. The shift came when I started pairing honesty about the situation with specificity about the response. That combination, honest and specific, is what earns trust when the numbers are ugly.

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Last updated: March 18, 2026