Ever since G&J USA Publishing, our corporate parent, announced it put up for sale both Fast Company and Inc. 32 days ago, there has been plenty of unsourced news stories and lots of gossip. Living inside the swirl of it, waiting for an official company announcement, has the feel of being in a hostage drama. Yet it's not all that unusual: a new survey finds that employees are more likely to hear about changes to their workplace at the proverbial water cooler rather than straight from their bosses.
In fact, 63% of employees in the U.S. say they usually hear about important business matters first through rumor, according to research just published by consulting firm ISR. The firm found that rumors prevail because many business leaders are poor communicators. The end result: employees feel left out of decision making and less inclined to put in the extra effort needed to make their organization a success.
And the research, involving 57 multinational companies over the two-year study, shows there is a significant cost to poor and delayed communication as well. In companies where an above average number of employees say they are kept informed, stock prices rose an average of $7.80. In companies where a below average number of employees say they are kept informed, share prices fell by an average of $8.10--a price swing of nearly $16 a share.
That's real money folks. I bet there are plenty of people out there who can relate to this story.
Related Stories: | Topics:Leadership, United States, Fast Company Magazine, Business, Financial Markets, Stock Performance |
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Recent Comments | 2 Total
June 25, 2005 at 12:38am by Mike Docherty
I joined a well-known small appliance company in 1999 as a Vice President and was part of the 'turnaround team' brought in to clean up the mess that Chainsaw Al Dunlap created. As we worked through restructurings, Chapter 11 reorganization, ownership by banks, etc., I saw first hand the damage that poor communications can wreak in stressful situations.
Unfortunately, too many people in these situations (often very senior level) immediately go into self-preservation mode -- When that happens, open communication ceases and the gap then gets filled by rumors and posturing.
One thing that has always stuck with me through those trying times, is how these situations test your values. My advice? Be true to your values and continue to 'do the right thing' for your organization (like communicating openly) no matter how unpopular it may become. Choosing a values-based path over personal career safety at times like these is scary... but in the long run will prove to be the winning approach. People both inside and outside the organization will remember it long after the dust settles.
Those were the best and the worst five years of my professional life, and I did eventually need to leave. But I left with my values intact, and a much stronger leader from the experience.
June 25, 2005 at 3:23pm by Joanne
I have worked with the same Financial Services company for 13 years and although management does its best to keep the grapvine at bay, secrets still leak. Some unofficial sources say the grapevine is 90% accurate. But watch out for that 10% descrepancy! Often times, the grapvine reveals the real story, while management tries to "professionalize" information. However, because of the 10% descrepancy rate, one can not rely on the grapevine solely. Information can be twisted around by misinformed co-workers looking for a "scoop". It is best to double check sources and pay attention!