When the Stakes Are High, Silence Costs the Most
Why the moment leaders feel most pressed to focus on the numbers is exactly the moment they should be talking to their people.
Some years ago, I watched a hospital CEO make a decision that I've thought about nearly every week since.
The hospital was in real financial trouble. Margins were thin, debt was high, and the board was applying intense pressure. So the CEO did what a lot of leaders do under that kind of strain: he went head-down. He focused on the financials. He worked the numbers, met with creditors, restructured contracts, hunted for cost savings. He kept the lights on. He kept the doors open. He made the kind of decisions that, on paper, kept the hospital alive.
What he stopped doing was talking to the people who actually ran it.
Months went by without a meaningful update from leadership. The strategy had shifted, significantly, but most of the staff had no idea. Nurses, technicians, administrators, mid-level managers, the people who showed up every day to deliver care: they had no line of sight into where the organization was heading or whether it was heading anywhere at all.
And so they did what humans always do in the absence of information. They filled the vacuum.
Rumors took the place of strategy. Hallway conversations did the work that town halls should have been doing. Some of the rumors were close to true. Most were wildly off and none of them helped.
People started to leave. The strong ones first, they always go first, because they have options. Then the steady ones, because they had watched the strong ones leave and read it as a signal. Within a year, the staffing problem was bigger than the financial problem had ever been.
The instinct is understandable
I want to be careful here, because I have sympathy for the CEO in this story. The pressure he was under was real. The financial situation was genuinely existential, and the doors were about to close. And the cultural script for senior leadership in a crisis is to demonstrate command of the numbers, project decisiveness, and not waste energy on what can feel like soft topics when the building is metaphorically on fire.
The instinct to go quiet; to focus, to grind, to fix the thing that's most measurably broken is not stupid. It's just incomplete.
What I've come to understand after twenty-five years in business operations is that culture and morale are not soft topics. They are the operating layer underneath every financial outcome. When that layer cracks, the financials get harder to fix, not easier.
And it's not only a crisis pattern
The hospital story is a crisis story. But the same dynamic plays out in organizations that look perfectly stable from the outside.
Earlier in my career, I spent more than a decade at an organization of over 50,000 employees, working under a CEO I rarely heard from. She was, by every reasonable measure, a busy person, running an enterprise of that size doesn't leave a lot of free hours, and her absence from internal communication was, in her own logic, a function of focus. We saw maybe one or two CEO updates a year. Her name appeared on the occasional company-wide publication. That was it.
That decade was the least efficient, lowest-growth stretch I lived through at the organization. Engagement surveys went out and went largely unanswered. Morale was visibly thin. What I notice most, looking back, is what I observed about myself: as a leader inside that environment, I couldn't have articulated, with any real confidence, where the organization was actually heading. I knew the work in front of my team. I didn't know how it connected to anything larger, because no one in the role of explaining that was actually explaining it. Which meant I couldn't have told you what my real priorities as a leader were supposed to be because the priorities had never been made clear.
If a leader at my level couldn't answer those questions, the people on my team certainly couldn't.
The CEO of that same organization today operates very differently. He hosts two town halls a month. He sends a weekly note covering what's happening, where the strategy stands, what's growing, what isn't. He shares the wins and he shares the misses. He is visibly on the ground, in front of the people who do the work, and the difference inside the organization is dramatic. People know where we're heading. They can articulate it. They can connect their own work to it. They feel like valued employees, because being told the strategy of the organization you serve is one of the most basic ways an employee gets told they matter. They have energy now; the workforce is motivated. We weren't better off financially yet, but you could feel the wave was coming, and it did. Why? Because now the workforce believes that they matter.
Both CEOs are intelligent, capable people with serious credentials. The difference isn't talent. It's whether the leader treats communication as a core part of the job, or as something to fit in around the real work. It is the real work.
What actually happens in the silence
The research on this is unambiguous, and it's worth knowing because it gives leaders language for something they often sense but can't quite explain.
A 2024 study published in the International Journal of Business Communication surveyed 1,044 U.S. employees across industries about how CEO communication shaped their experience during disruptive times. The researchers identified four specific leadership communication attributes: transparency, authenticity, empathy, and optimism, that directly reduced employees' feelings of uncertainty, improved their psychological well-being, and increased their trust in the organization. The effect ran in both directions: when those attributes were present, trust grew. When they were absent, like when leaders went quiet, trust eroded, even if leadership wasn't doing anything actively wrong.
Amy Edmondson at Harvard Business School has spent decades studying what she calls psychological safety: the shared sense within a team that it's safe to ask questions, raise concerns, and admit not knowing something. Her research, and a growing body of work building on it, shows that psychological safety is one of the strongest predictors of team performance, and that it collapses fast when leaders create or tolerate information vacuums. Google's own internal research on team effectiveness, known as Project Aristotle, came to a similar conclusion: psychological safety was the single most important dynamic separating their high-performing teams from the rest.
Research demonstrates organizational silence and organizational rumor are tightly linked. When leaders stop communicating, rumors don't just emerge, they accelerate. People are wired to fill in narrative gaps. If you don't give them a story, they'll create one. And the one they generate is almost always darker than the truth.
The cost of going quiet
The economic side of this isn't subtle either.
Gallup's most recent State of the Global Workplace report estimates that disengaged employees cost the global economy roughly $8.8 trillion in lost productivity each year. Their data also suggests that managers, the people closest to the day-to-day experience of work, account for around 70 percent of the variance in team engagement. When managers are kept in the dark by their own leadership, the dominoes fall predictably: the manager can't speak with confidence to the team, the team feels the unsteadiness, and engagement drops.
The differences between highly engaged and disengaged business units, in Gallup's measurements, are not small. Highly engaged units see roughly 21 percent greater profitability, 41 percent less absenteeism, and as much as 59 percent lower turnover compared to disengaged ones. Those are the kinds of differences that decide whether an organization can actually execute the recovery plan its leadership team built in the boardroom.
In other words: the financial recovery and the people side aren't separate workstreams. They are the same workstream, viewed from two angles. A leader who treats them as separate tends to lose ground on both.
The paradox most leaders miss
Here is what took me years to fully see: the moment a leader feels most pressed to focus on the financials is the exact moment communication matters most.
When everything is fine, you can probably get away with monthly all-hands and a few thoughtful emails. People extend goodwill. They assume leadership has it under control because, visibly, it does.
When things are not fine, when budgets are being cut, restructuring is on the table, the future of the organization is genuinely uncertain, that goodwill burns through quickly. People start watching for signals. And in the absence of clear ones, they read silence as the worst possible signal: that leadership doesn't know what's happening, doesn't trust them with the truth, or doesn't believe the organization is going to make it.
None of those readings might be accurate. It doesn't matter. The reading shapes the behavior, and the behavior shapes the outcome.
What better looks like
The visible CEO I described earlier isn't doing anything heroic. Two town halls a month. A weekly note. Regular presence on the ground where the work is happening. That's it. It's not time-consuming when it's built as a habit rather than a campaign and the dividends compound across an organization of any size.
The point isn't volume. It's cadence and substance. A short, honest update, even when there isn't great news to share, beats a polished one delivered twice a year. An acknowledgment of uncertainty, without pretending to have answers no one has yet, beats silence every time. The simple presence of a leader, in front of the people who need to see one, is something most leaders underestimate.
That's what the 2024 communication research is pointing at when it names transparency, authenticity, empathy, and optimism. Not slogans. A practice. You don't need a polished message every week, you just need a real one.
The hospital CEO I started this piece with eventually did start communicating again. But by that point, several of the people he most needed had already gone, and the climb was steeper than it had to be. The financial picture improved over time. The cultural picture took years longer and honestly, they are still climbing out of that hole today, three years later.
A final thought for leaders under pressure
If you are a CEO or C-suite leader reading this with a knot in your stomach because some of it is landing close to home: the path forward is not to over-correct with a sweeping cultural campaign. It's to recognize that culture and morale are not topics you turn off when the stakes get high. They are the very thing that determines whether you'll have an organization to save once the financials come back into the green.
Communication during hard times is not a soft skill. It is the operating system on which everything else runs.
That's the part of the work I help leaders think through. If your organization is in a hard stretch and you'd like a conversation about how to lead through it without losing the people who make recovery possible, I'd welcome the chance to talk.
Sources
Edmondson, A. (1999). Psychological Safety and Learning Behavior in Work Teams. Administrative Science Quarterly, 44(2), 350–383. The foundational study establishing psychological safety as a predictor of team performance.
Edmondson, A. C., & Bransby, D. P. (2023). Recent synthesis of 185 research papers on psychological safety in the workplace, published through Harvard Business School Working Knowledge.
Men, L. R., Qin, Y. S., Fitzsimmons, A. B., DiStaso, M. W., & Heffron, E. (2024). An Integrated Framework for Exploring the Impact of Leadership Communication on Employee Trust During Disruptive Crisis Times. International Journal of Business Communication. Survey of 1,044 U.S. employees identifying transparency, authenticity, empathy, and optimism as the four leadership communication attributes most associated with employee trust during crisis.
Gallup. State of the Global Workplace: 2024 Report. Source for the $8.8 trillion global productivity loss estimate, the 70 percent manager-driven variance in team engagement, and the engagement-to-performance differentials cited.
Google's Project Aristotle research on team effectiveness, identifying psychological safety as the most important dynamic of high-performing teams.
Research on organizational silence and rumor formation, including peer-reviewed studies establishing the strong relationship between leadership silence and the proliferation of workplace rumors.