Too little time is spent addressing the real concerns of real people inside and outside the organization who are confused and anxious. In the absence of adequate information, the smallest bit of news assumes monumental importance. The rumor mill starts churning faster and faster. Morale plummets, productivity drops. If each person spent only an hour each day worrying and wondering about a deal, this speculation would cost the company hundreds of thousands of dollars in lost productivity and rework due to mistakes.
Lack of communication has other negative effects as well.
When customers do not hear from an organization in transition, they may very well take their business elsewhere. Several years ago, in a major merger between two large technology firms, the acquiring company neglected to communicate with one of its biggest customers. Concerned that no one had thought to call and talk about its account, the customer informed management that it was cutting its order in half and using secondary sources of supply. Effective communications management reduces the crippling effects of uncertainty and builds acceptance among employees, customers, suppliers, and investors. A good communications plan addresses what people want to know versus what the company wants to say.