Why Silence Kills

I just came across a Corporate Executive Board (CEB) study showing the incredible penalties and pay-offs of good and bad communication practices. A survey of 300,000 employees shows that open and honest communication pays huge dividends to companies with transparent cultures.

A CEB poll found that nearly half of executive teams don’t get critical information because employees are afraid to be the bearers of bad news! Clearly, many messengers are being shot — or at least wounded — when they don’t tell their bosses what they want to hear. Only 19% of executive team are promptly told of bad news that could have a big impact on the firm’s performance!

The CEB study found companies “where employees provide honest feedback substantially outperformed their peers in terms of 10-year TSR (Total Shareholder Return) from 1998–2008. Two factors stood out in particular:

• Openness of Communication – Employee perceptions of the extent to which managers encourage two-way dialogue matters. We found that companies rated by their employees in the top quartile in terms of openness of communication have delivered TSR (10-year TSR 1998–2008) of 7.9% compared with 2.1% at other companies. (They also had materially lower levels of observed fraud and misconduct.)

• Fear of Retaliation (and Willingness to Speak Up) – Among the 12 key indicators we track in our cultural diagnostic, the one that is most strongly correlated with 10-year TSR is employee comfort of speaking up. The most important driver of this comfort is a lack of fear of retaliation. As with openness of communication, we found that companies that excel on this dimension also had materially lower levels of observed fraud and misconduct.”

Small wonder there are so many struggling organizations in these turbulent times. CEB found that perceptions of communication openness dropped sharply during the recession of 2008 and stayed way down. This is exactly the opposite of what needs to happen during wrenching changes. With closed communication the contagion of fear spreads like a virulent virus throughout organizations. This creates defensiveness, turf protection, mistrust, disengagement, kills innovation, and lowers service and quality levels.

Reducing fear and encouraging Courageous Conversations is the central theme of Moose on the Table: A Novel Approach to Communications @ Work. As with the book, we’ve found that using a lighter approach can sometimes initiate these delicate conversations. How is your team doing? Is silence killing you? Do you foster cowardly or courageous conversations? Take our Moose on the Table quiz for a quick reading.

 

For over 30 years, Jim Clemmer’s practical leadership approaches have been inspiring action and achieving results. He has delivered thousands of keynote presentations, workshops, and management team retreats to hundreds of organizations around the globe moving his audiences from inspiration to application. He’s listed in the World’s Top 30 Most Influential Leadership Gurus based on research with 22,000 global business people, consultants, academics and MBAs. His website is www.JimClemmer.com.