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The Value of Water Cooler Talk

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.FCS