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 have 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 are not a failure of leadership. How you respond to them is where leadership actually begins.

Do Not 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 have watched leaders do this, and I have done it myself early in my career. It never works. Your team is not stupid. They can feel when things are off. And when you sugarcoat the reality, you lose credibility that is 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 is where we are. It is not where we want to be. Here is what I think we should do. What am I missing?” That conversation was uncomfortable. It was also the turning point.

Separate the Problem From the People

When revenue is down, the temptation is to look for someone to blame. The sales team is not closing. The ops team is over budget. Marketing is not 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 is the first two. The market shifted. The process did not keep up. Fix those first, and you will 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 are 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 are in a tough stretch, the worst thing you can do is obsess over last month’s revenue. You cannot 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 is about to happen.

The Conversation Nobody Wants to Have

Sometimes bad numbers mean hard conversations. Budget cuts. Headcount reductions. Project cancellations. I am not going to pretend those conversations get easier with experience. They do not. 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 do not. I learned this the hard way at Penebaker Enterprises. I waited too long to make a staffing adjustment because I did not 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 is not pessimism. It is respect.

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 do not make you a bad leader. Pretending the numbers are fine when they are not? That makes you a bad leader. The difference between the two is everything.

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