Rumors and gossip can be debilitating for any organization. They create a kind of parallel universe that siphons vital energy away from important work. They cause a need for leaders to do the same damage control they would do if the rumors were actually true. Reason: What people believe is reality to them. If many people in an organization believe there is going to be a cut in salary, even if that is not the case, the leader must do the damage control as if it was actually going to happen. In the hyper-competitive global marketplace, organizations cannot afford to cope with distracting ghosts born through the rumor mill.

Let’s explore several thoughts about the impact of rumors and how to prevent them from starting in the first place.

Trust is an antidote

Trust and rumors are mostly incompatible. If there is low trust, it is easy for someone to project something negative for the future. When trust is low, these sparks create a roaring blaze like tinder in a sun-parched and wind-swept desert. If trust is high, the spark may still be there, but it will have trouble catching on and growing. This is because people will just check with the boss about the validity of the rumor.

When trust is high, the communication process is efficient, as leaders freely share valuable insights about business conditions and strategy. In low trust organizations, rumors and gossip zap around the organization like laser beams in a hall of mirrors. Before long, leaders are blinded with problems coming from every direction. Trying to control the rumors takes energy away from the mission and strategy. Building high trust is not the subject of this article. I have written extensively on how to build trust elsewhere, and there are numerous other authors who write about it.

Rumors generate spontaneously

Just as a fire can be kindled spontaneously, so rumors and gossip can develop without any apparent external influence. I believe it is part of the human condition to speculate on what might happen. This tendency is greatly enhanced in a culture of low respect. Often it is a void of timely communication that causes a rumor to start.

Nature hates a vacuum. If you have a bare spot in the lawn, nature will fill it in quickly, usually with weeds. If you take a pail of water out of a pond, nature will fill it in immediately so no “hole” exists in the surface. We can hear the sound of air rushing into a coffee can when the opener first compromises the vacuum. So it is also with people. When there is a vacuum of credible information, people fill in the situation with information of their own invention – usually “weeds.”

Rumors wick energy away from critical work

Dealing with the reality and consequences of gossip is a significant tax that is paid by organizations that have a culture which breeds false information. My swimming pool is cloudy now because I did not maintain an environment inhospitable to algae. Now I must invest in pounds of expensive chemicals and do extra work that would not have been necessary if I had exercised the right ounces of prevention a few weeks ago.

Seven tips for leaders to reduce the impact of rumors:

1. Intervene quickly when there is a rumor and provide solid, believable information about what is really going to happen. It is best to have this intervention before the rumor even starts, but it is essential to nip the problem as soon as it is detected.

2. Coach the worst offenders to stop. Usually it is not hard to tell the 2-3 people in a group who like to stir up trouble. They are easy to spot in the break room. Take these people aside and ask them to tone down the speculation. One interesting way to mitigate a group of gossipers is to go and sit at the lunch table with them. This may feel uncomfortable at first, but it can be very helpful at detecting rumors early. Just as in fighting a disease, the sooner some treatment can be applied, the easier the problem is to control.

3. Double the communication in times of uncertainty. There are times when the genesis of a rumor is easy to predict. Suppose all the top managers have a long closed-door meeting with the shades pulled. People are going to wonder what is being discussed. Suppose the financial performance indicates that continuing on the present path is impossible. What if there are strange people walking around the shop floor with tape measures? There could be a consultant going around asking all kinds of probing questions. All these things, and numerous others, are bound to have people start speculating. When this happens, smart leaders get out on the shop floor to interface more with the people. Unfortunately, when there are unusual circumstances, most managers like to hide in their offices or in meetings to avoid having to deal with pointed questions. That is exactly the opposite of the most helpful suggestion.

4. Find multiple ways to communicate the truth. People need to hear something more than once to start believing it. According to the Edelman Trust Barometer for 2011, nearly 60% of people indicate they need to hear organizational news (good or bad) at least three to five times before they believe it.

5. Reinforce open dialog. If people are praised rather than punished for speaking out when there is a disconnect, they will do more of it. That mechanism is a short circuit to the rumor mill. It also helps build the trust level, which is the best way to subdue the rumor agents.

6. Model a no-gossip policy. People pick up on the tactics of a leader and mimic them on the shop floor. If the leader is prone to sending out juicy bits of unsubstantiated speculation, then others in the organization will be encouraged to do the same thing. Conversely, if a leader refuses to discuss information that is potentially incorrect, then it models the kind of self control that will be picked up by at least some people.

7. Extinguish gossip behavior. This may mean breaking up a clique of busy-bodies or at least adding some new objective blood into the mix. It might mean having a “no BS” policy for the entire team.

In today’s climate, it is essential to mitigate if not eliminate the impact of rumors and gossip in the workplace. It takes a strong and vigilant leader to do this well, but it has potentially huge benefits to the organization.