Rumor Mill Exposed: The Hidden Dangers in Your Organization | Scott McCarthy | Episode 339

Scott McCarthy [00:02:19]:
When I was at RMC, the Royal Military College of Canada, we often called it rumor mill central and just like any organization out there. Rumors were rampant. And sadly to say, it is much the same in the world today. Today, we’re gonna be tackling the impacts of rumors and organizations and what impacts they have, how you as a leader, you can get ahead of this, and hopefully stop the damage. Are you ready for this? Alright. Let’s dive in, shall we? So first off, let’s talk about rumors in general. Right? We all know what rumors are. They’re unfounded, topics about people, things that are happening, what have you.

Scott McCarthy [00:03:11]:
An interesting stat that, I found is that a Harvard Business Review found that fifty eight percent of employees have seen workplace rumors damage working relationships. And, like, honestly, this day and age, who has the time, the ability to recover from something like that? We’re all short on people. We all have too much to do, and we can’t have these rumors just rampant going around and destroying things. So this is why we need to get ahead of this. But let’s dive into some of the specific impacts rumors are going to have on organizations. And the first one being erosion of trust. When a rumor goes around, it just erodes trust because no one knows for sure what’s true or not. Right?

Scott McCarthy [00:04:01]:
And before I give this example, political

Scott McCarthy [00:04:06]:
stuff aside, alright, let’s not even go down the rabbit hole of what’s happening this day and age, But the example is 02/2018, Tesla faced a internal links and rumors about layoffs and financial instability. Elon himself had to directly address these via employee wide emails to regain control of the narrative. So you

Scott McCarthy [00:04:28]:
can see, like, in a company such as Tesla, political stuff aside, but Tesla was an organization were,

Scott McCarthy [00:04:38]:
you know, and still continue to be innovative, being huge, number one automaker in the world, market cap of trillions of dollars, like, incredible, but still,

Scott McCarthy [00:04:49]:
you know, internal leaks

Scott McCarthy [00:04:51]:
and rumors about layoffs and financial instability, and the CEO had to jump in and go after. So that erodes trust amongst the people. Trust is the glue for high performing teams. It’s the cornerstone of leadership. If you don’t have trust, you have nothing. And rumors introduce doubt, leading employees to question leaders intentions. So keep that in mind. Next thing attached right through trust, of course, is decreased morale.

Scott McCarthy [00:05:22]:
Of course, Gallup study revealed only 15% of employees strongly agree that their leaders make them enthusiastic about the future, and rumors can erode this enthusiasm even further. One single rumor floating around, favoritism or layoffs can deflate your entire organization. You’re gonna crush morale, and we’ve seen this in so many other organizations, so keep that in mind. They also, moving forward, increase they increase anxiety and uncertainty. Our our brains are are actually wired

Scott McCarthy [00:06:05]:
to seek certainty. Right? It’s it’s the fear of the

Scott McCarthy [00:06:11]:
unknown, though, that crushes us. It’s a core component of our psychological safety, and if you’ve been following me for any point in time now, you know I am a huge proponent of psychological safety. So, during for so during the merger at Yahoo, there was all kinds of rumors that were floating around, but job losses, which turnaround cause high levels of stress, apt aptism. I can’t say that word. We get the point. People not showing up. How about that? We go with that. And even resignations before there were any official announcement.

Scott McCarthy [00:06:46]:
Why? Because people want certainty. And a lot of people will go, well, if they’re gonna fire me, I’m going to quit. And the reality is they probably weren’t gonna get fired in the first place. So that anxiety, that uncertainty gives a huge thing. As well, they make distraction from work. Imagine that. A study by the International Journal of Organizational Analysis found that workplace gossip can consume up to fifty two

Scott McCarthy [00:07:16]:
minutes of an employee’s day.

Scott McCarthy [00:07:19]:
Fifty two minutes. Basically an hour gone from gossip and rumor mill sentence spreading. Think about that. If you got an eight hour workday, that’s one eighth used up in this. Extremely damaging. That means it’s four hours, five hours per week.

Scott McCarthy [00:07:40]:
Just gone to lost productivity. It’s almost a day. Think of that.

Scott McCarthy [00:07:46]:
Keep going on the topic. They can damage our reputation. Of course, they’re going to damage our reputation, whether that’s internal or external. So United Airlines suffered brand damage when internal rumors about staff misbehave leaked, went viral before the company could even respond. So, again, so that leaked went out, and then the damage was on the exterior. Alright. People not wanting to take their airlines, people boycotting them, and such. Internal, it can cause a company to tank on whispers, especially if a leader’s credibility is questioned.

Scott McCarthy [00:08:21]:
I don’t have a specific example

Scott McCarthy [00:08:23]:
for this one, but still it makes sense. Moving along,

Scott McCarthy [00:08:30]:
you’re going to get into impact on team dynamics and retention. So, you know, you’re gonna have within teams, insiders and outsiders, little clicks being formed, little groups within the team, and that’s how we, you know, as leaders, we want teams to come together. On the retention front, 60% of employees lead organizations due to internal culture, not pay. You can even up that even more to they leave due to poor leadership. Okay? And then finally, difficulty in change management. When change is occurring, that means there’s vulnerability and absence of clear communication. Rumors are going to fill the vacuum. A great example of this is IBM’s restructuring in February.

Scott McCarthy [00:09:21]:
Poor communication laid. Lay off rumors to spike creating a fear that delayed the implementation implementation timelines for this. So these are all the negative effects that rumors can have and I’m sure you can think of some others out there. So, you know, feel free to let me know what are some other ones out there that you can think of. But, you know, these are just the effects. Let’s learn let’s talk about how we can combat them because that is the most important thing as leaders. How we can combat rumors and the rumor mill. So the first thing is promote open communication.

Scott McCarthy [00:10:01]:
Go ahead. Host host town halls or ask me anything sessions. Be transparent in your communications. Show a little bit of emotion. I don’t mean get all, you know, excited to the point that you’re yelling and screaming or crying or, you know, any of those extremes, but share a little bit of emotions so that they understand that, you know, build that trust. People need is honesty. They don’t need perfection. I feel like a lot of leaders out there feel like they need to hold on to information as long as possible until they have it perfect, and that can definitely backfire.

Scott McCarthy [00:10:43]:
Create a culture of trust. Patagonia CEO regularly shares business challenges with his entire team, and what they’re doing is they’re fostering transparency parenty, which turns around and fosters psychological safety. Showing that, hey, we can make mistakes. Stage two, failure. Right? Making mistakes at learner safety. So use the shot or trust battery metaphor for from Shopify which means that every interaction you’re either charging your trust battery or you’re charge or discharging the trust battery. So you’re always building trust where you’re or you’re syncing it. Keep that in mind.

Scott McCarthy [00:11:33]:
Next tip is to address the rumors promptly.

Scott McCarthy [00:11:39]:
Pro tip, don’t wait. Rumors spread fast. Facts must be faster. Okay? You have to get out there. You have to get ahead of these things, so get after them. As soon as you hear them, go ahead. Example of this was Salesforce’s CEO, Marc Beinhof, who directly addressed rumors, but acquisitions via his Twitter account stop misinformation in real time. And if you don’t Twitter or x, whatever the heck you wanna call it by the way, I’ve shut down my account.

Scott McCarthy [00:12:07]:
I’m just not using that platform anymore just as

Scott McCarthy [00:12:11]:
an aside. But if you

Scott McCarthy [00:12:13]:
know anything about that platform, it’s that, you know, it’s fast. Like, you you send out a tweet or whatever the heck they call this day and age, and, like, it lives maybe microseconds. So you have to be out there constantly, and that took a lot of work. Alright? Next step is to encourage direct conversations. You know? Develop your team. Enable them with conflict resolution skills. How to speak directly, respectfully, constructively. You want to have those direct conversations with your team members.

Scott McCarthy [00:12:48]:
Right? I would offer you want to enable that as well. Open them up to have those conversations. So we talked about addressing it. We talked about, you know, having these town, opening open communication, then enable people to come you to you as the leader to go and then trust those rumors. Right? You know, if they think they’re hearing something, well, what? Don’t necessarily always you force the chain of command per se and enable people to come and

Scott McCarthy [00:13:19]:
address it. I do that quite regularly with my team.

Scott McCarthy [00:13:25]:
Next thing is provide training on communication, especially for your middle managers, the ones that are, like, in the thick of it, the ones that are there day in day out. What you want to do is enable them so that they can, you know, be trained up on active listening, nonviolent communication, feedback loops. The cycle of communication and feedback loops is super crucial. Companies that invest in communication straight training see 30% fewer misunderstandings leading to conflict, which is an ATD study. Alright? So just a great example there

Scott McCarthy [00:13:59]:
of taking that and using it.

Scott McCarthy [00:14:03]:
The next thing is to utilize humor and positivity, but you have to use humor strategically. It can deescalate tension, but make sure you don’t mock or minimize the concerns. Great way to do that is by doing, you know, self deprecating humor. You’re just making fun of yourself. Okay. I use that one. Oh, duh. And, basically, it just enables me to deflate, you know, something by pointing it back at myself and using myself as the butt end of the joke.

Scott McCarthy [00:14:37]:
Another great way that an exec, used humor was that they fired out a top 10 fake rumors of the week on the air Internet. It created a culture of openness and diffused anxiety, enabled them to, you know, address those rumors straight away directly and enabled the team to anybody and everybody could see that. And then the next and second last way for you as a leader to address rumors in your organization is to provide regular feedback mechanisms. You can potentially look at anonymous suggestion boxes, having one on ones. Of course, you always need to have that with direct. Digital platforms like, Office five or TinyPulse, you know, you just need to get the pulse of your organization. Every organization’s gonna be different. Some enjoy the not the anonomy of those boxes or online boxes.

Scott McCarthy [00:15:36]:
Other organizations are very hierarchical structured. Basically, what you’re trying to achieve is giving a place for your people to be heard so you don’t feel the need to whisper. And then the final way for you to combat rumors is, of course, lead by example. You as the leader, you have to lead by example. Means you cannot engage in it because if you engage in it, you’re endorsing it. By endorsing it, you’re going to enable it to spread amongst your organization across so many other ways. Okay? So don’t do it. And when you see

Scott McCarthy [00:16:15]:
it, shut it down. Alright? So, again, ways for

Scott McCarthy [00:16:20]:
you to combat rumors in your organization, promote open communication, create that culture of trust, address them promptly, encourage direct conversations, provide training, especially to those middle managers of yours, utilize humor strategically, of course,

Scott McCarthy [00:16:38]:
but of course, always tap into positivity, establish some kind of feedback mechanism, and always, always, always lead by example.

Scott McCarthy [00:16:49]:
Ladies and gentlemen, rumors aren’t just idle talk.

Scott McCarthy [00:16:52]:
They’re silent killers of trust, culture, and

Scott McCarthy [00:16:55]:
productivity, but the antidote is in your hands as a leader. You can get out there, get after it. Okay? Us as leaders, we need to own a narrative, and that means we need to communicate openly, model trust, and create safe spaces where facts flourish and fear flies. So and the final thought of the show today is rumor controlled culture isn’t built in today, but every truth you speak is a break in that foundation. Again, that cornerstone of trust is how we lead. Just a quick final, update for moving forward leadership and myself here. Our leader growth mastermind is about to open its doors yet again. And if you’re interested, you want a community of leaders where we support each other, help each other grow, develop, and tackle problems, whether that is at work or at home.

Scott McCarthy [00:17:52]:
Leader Growth Mastermind is for you. You can check it out at leaddumpboss.com/mastermind. And always, ladies and gentlemen, lead dump boss.

Scott McCarthy [00:18:03]:
Take care.