When institutions face financial challenges, the instinct to communicate less is common – and usually counterproductive.
Presidents and chief financial officers often become understandably cautious. They worry about creating unnecessary anxiety, limiting future options, generating criticism, or communicating information that may later change. As a result, updates become less frequent, messages become more tightly controlled, and stakeholders hear less from leadership precisely when they most want information.
In times of uncertainty, people do not stop asking questions because information is scarce. They simply begin answering those questions themselves.
Faculty speculate about what may be happening behind closed doors. Staff connect dots and develop theories. Alumni hear rumors. Trustees field concerns. Before long, multiple narratives begin circulating throughout the institution, many of which bear little resemblance to reality.
The challenge is that leaders are no longer shaping the narrative. They are reacting to it.
This is particularly true in higher education, where faculty, staff, students, alumni, and governing boards all have a deep investment in the institution’s future. During periods of financial stress, stakeholders want to know more than what decisions are being made. They want to understand why those decisions are being considered, what principles are guiding them, and how leadership intends to navigate the challenges ahead.
Communicating more does not mean sharing every confidential conversation, personnel matter, or board discussion. Transparency and oversharing are not the same thing.
Effective communication during difficult periods means helping stakeholders understand what leaders know, what they are evaluating, what they still do not know, and what process will be used to make decisions. It means acknowledging uncertainty without appearing uncertain. It means communicating progress even when definitive answers are not yet available. It means operating in the gray.
One of the most common mistakes leaders make is waiting until they have all the answers before speaking. Unfortunately, by the time they feel ready to communicate, stakeholders have often spent weeks or months creating their own explanations for what is happening.
Consider a college facing a significant budget deficit. Leadership may spend months evaluating options, reviewing financial models, and discussing potential solutions. During that time, employees notice vacant positions going unfilled, discretionary spending being reduced, and meetings occurring behind closed doors. Even if no official decisions have been made, stakeholders are already drawing conclusions about what comes next.
Without regular communication from leadership, rumors often become the primary source of information. Layoffs are assumed. Programs are presumed to be on the chopping block. Confidence erodes long before any actual decisions are announced. By the time leadership finally communicates, the institution is often trying to correct months of speculation rather than explain the decisions themselves. Human beings are wired to make sense of uncertainty. When information is limited, speculation fills the gap. In many cases, the stories people create are worse than reality itself.
The irony is that stakeholders are often more resilient than leaders assume. In my experience, people can handle difficult news. What they struggle with is surprise.
When stakeholders feel informed throughout a process, they may not agree with every decision, but they are more likely to understand how and why decisions were made. When they feel excluded from the conversation, even well-reasoned decisions can damage trust and credibility.
Communication also requires honesty about the role feedback will play in the decision-making process. Too often, institutions ask for input when the decision has effectively already been made. Faculty, staff, and students are smarter than many leaders give them credit for. They can usually tell the difference between a genuine request for feedback and a process designed primarily to check a shared governance box.
If leaders are truly seeking ideas, perspectives, or alternatives, they should say so and demonstrate how that feedback will inform the outcome. If a decision has already been made and the institution is focused on implementation, leaders should be honest about that as well. Stakeholders may not always agree with the decision, but they are far more likely to respect candor than a process that creates the illusion of influence where none exists.
That trust matters because during periods of financial stress, communication is not separate from leadership. It is leadership.
Regular communication demonstrates that leaders understand the challenges facing the institution, are actively engaged in addressing them, and have a thoughtful process for moving forward. It provides reassurance that difficult issues are being confronted rather than avoided.
Too often, leaders view communication as a single event rather than an ongoing process. A campus email, a town hall, or a budget presentation may provide an important update, but one communication rarely answers every question or addresses every concern. During periods of uncertainty, stakeholders need a steady cadence of information. Repetition, reinforcement, and regular updates help build confidence that leadership remains engaged and focused on the challenges ahead.
Do
Communicate before you have every answer.
Stakeholders don’t expect certainty. They do expect visibility.
Explain the principles behind your decisions.
People are more likely to accept difficult decisions when they understand the “why.”
Share what you know, what you’re evaluating, and what you still don’t know.
Operating in the gray is more credible than pretending you have complete clarity.
Communicate consistently, not just when there’s major news.
Leadership isn’t demonstrated through one email or one town hall. It’s demonstrated over time.
Repeat important messages.
One communication is rarely enough. Reinforce key messages across multiple channels and over multiple weeks.
Be honest about feedback.
If you’re genuinely seeking input, say so. If the decision has been made and you’re focused on implementation, say that too. People respect candor.
Prepare people for difficult decisions.
In my experience, stakeholders handle difficult news better than they handle being surprised by it.
Don’t
Don’t let silence create the narrative.
If you’re not telling the story of your institution’s financial situation, someone else will.
Don’t confuse transparency with sharing everything.
You can be open about the process without discussing confidential conversations or personnel decisions.
Don’t wait for the “perfect” communication.
Communication is a process, not a single event.
Don’t ask for feedback just to check a shared governance box.
People know the difference between meaningful engagement and performative consultation.
Don’t assume one message is enough.
Questions evolve. So should your communication.
Don’t underestimate your stakeholders.
Most people can handle difficult news. What damages trust is feeling blindsided.
Don’t mistake caution for leadership.
During periods of uncertainty, visible, steady communication is one of the clearest demonstrations of leadership.
Most importantly, communication allows leaders to maintain credibility and shape the narrative rather than surrendering it.
If you are not telling the story of your institution’s financial situation, someone else will.
Financial stress is one of the most difficult tests of institutional leadership. It requires hard decisions, difficult conversations, and careful stewardship of resources. There is no way to make everyone happy, and more often than not, significant decisions will alienate a portion of your audience. That reality makes communication even more important, not less.
Stakeholders do not expect certainty. They do expect visibility.
In times of financial stress, people look to their leaders for more than solutions. They look for clarity, direction, and evidence that someone is steering the institution through uncertainty.
The institutions that navigate these moments most successfully are rarely the ones with the fewest challenges. More often, they are the ones whose leaders communicate early, communicate often, and communicate with enough honesty and consistency to maintain trust along the way.
When trust matters most, silence is rarely the answer.
