In the past, I have written why I believe a good leader ought to talk about risk with their team and how this kind of discussion should happen regularly. I argued that it is a powerful way for the leader to deal with the fear of letting people down.
Of course, there is also an ethical aspect to it; people deserve to know what kind of adventure they embarked on.
There is another important reason why one should be open about complex topics with their team. It's a benefit that ultimately outweighs the threat of creating a wave of panic within the group.
Talking about problems and challenges allow everybody to partake in their resolution, and in the culture. People develop a feeling of ownership as they see the whole picture—a nuanced picture with both good and bad.
Communicating on the positive exclusively makes employees suspicious. People are smart. They often recognize partial or deceitful communication.
Consequently, voluntarily omitting the negative and the sensitive topics can lead individuals to think that the leader has an ulterior motive.
But when the leader openly discusses some of the organization's difficulties and the thought process towards their resolution, then communication becomes a powerful means of engagement.
It chokes the rumors and invites people to build solutions together.