How Office Gossip is Hurting Your Business

This is the first of a two-part series on office gossip. Today, I focus on the dangers of office gossip and my next column will share my top tips on how to deal with it.

I’ve talked about my nickname, Monty Hall, because I engage in “Let’s Make a Deal” on a daily basis in my career as a turnaround authority. Sometimes, I also feel like a contestant on the game show “To Tell the Truth.”

When I take over the management of a business and speak with employees at all levels of an organization, I sometimes hear wildly varied stories of situations in the company, which may or may not be true. It becomes my job to separate fact from fiction.

I often determine that a lot of what I’m hearing is not based on reality, but is actually office gossip. If you think that employees hanging around the proverbial water cooler is a harmless break in their day, you may be shocked to learn just how much that chatter is costing you.

BusinessInsider.com compiled a list of surprising ways that employees cost companies billions in the workplace. The article cites that “smartphones, time-wasting websites and gossip can cost U.S. companies an estimated $650 billion a year.”

In addition to the time wasted, office gossip is also dangerous to the health of your company in these ways:

It reduces productivity

It’s common sense. If employees are spending their time spreading, listening to and trying to verify gossip, they are not focused on their jobs and are not working.

It undermines morale

If employees hear rumors about trouble with the company, they may start to feel anxious about their jobs. Instead of focusing their attention on excelling at their jobs, they may instead start looking for another one.

It creates a toxic work environment

Gossip can create cliques in the workplace and can be destructive to the teamwork necessary to complete projects, as employees take sides and begin to distrust each other. Employees who don’t want to work in that toxic environment may leave to find a more positive workplace.

Reputations can be destroyed

Let’s say an unfounded rumor started that one of your employees has been missing deadlines on an important project. Managers may be reluctant to work with that employee in the future, damaging her reputation and limiting her career opportunities.

It can cost you customers

It’s happened to me several times. I’m waiting for service at a store or have a meeting at an office and I hear the employees gossiping, apparently oblivious to the fact that I can hear every word. They complain about their long hours or that a fellow employee was taking off early that day. Gossiping employees can make dealing with your business an unpleasant task and people may be tempted to take their business elsewhere.

There is no doubt about it. Office gossip is detrimental to your company and to your employees. Read my next post for my top tips on how you can cut down on the gossip and its destructive effects.

 

 

My Greatest Magic Trick: Creating a Million Dollars in Cash Flow Overnight

So I’ve decided to share my coolest business magic trick with you. I can create a million dollars in cash flow out of thin air – and valuable as a million dollars is, there’s nothing like magically creating extra time.

Now, now, I know that a magician isn’t supposed to go revealing the way his tricks are done. It’s bad for business, and where’s the money in that!?

But what’s good for you is good for business, so I’ve decided to share.

Now You Owe 4 Million . . . 

First, let’s suppose that you have 30 day terms with your vendors and a million dollars in payables every month. Imagine that we’re just looking at the first four months of the year, January through April.

Over the course of those four months, then, the total payments are 4 million dollars.

Check out this picture:

So how do I create a million dollars?

And Now You Owe 3

All I have to do is extend normal trade terms from 30 to 60 days and suddenly you owe nothing in January!

That means that the million dollars walking out the door in January is still in your pocket. A million dollars has just been added to the positive side of your cash flow.

That’s right: in the four month period of January through April you’re now paying only 3 million dollars! You still owe that million, but by changing the timing of your payments, it’s been pushed back every month going forward.

Don’t Try This at Home

So why have I told you one of my greatest magic tricks and one of the best strategies of my turnaround success? Because the secret’s in the sauce!

My real talent is playing, “Let’s Make a Deal.” They don’t call me Monty Hall for nothing. The key – and hard part – to this magic trick is doing the right financial assessment and then successfully renegotiating with vendors to obtain extended terms and create that improved cash flow.

When businesses try to get vendors to give them an extra 30 days to pay a million dollars, vendors get agitated and concerned. My job is knowing what vendors need to hear, what makes them comfortable, providing them with the proper assurances and then making sure that those 30 days are used in the best possible way to ensure things get back on track by the second month.

Remember, you have to keep to your negotiated deals. You don’t want this to blow up on you, and it takes a professional to see this process through because generally this trick is one piece of a larger successful turnaround and restructuring strategy.

Conclusion

In business there’s hardly anything so valuable as creating time, and if you can make money come out of that time to boot, you’re in great shape. My skills lie in putting people into great shape.

My golden formula is time + energy = value. I create the time and bring the energy, and with those two pieces in place I can provide value.

Have you ever tried to renegotiate your terms? If so, what happened? Have you ever tried this trick yourself?