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A client (we’ll call her Nancy) came into my office one morning.  She was upset with another manager (we’ll call her Sharon) of a related department.  Nancy complained for 15 minutes about Sharon, explaining how Sharon sabotages Nancy’s efforts to improve her department.

That afternoon, Sharon came into my office.  Same day.  She went on a rampage about Nancy, accusing her of lying, mistreating Sharon’s employees, and negatively impacting all of Sharon’s work.

As Sharon left my office, she surreptitiously bumped into Nancy, within my eyesight.  “Hi!  Oh my word, I love your jeans!  Where did you get those?  We have to go shopping together!”  They chatted for 10 minutes, and went on their way.  Absolutely true story.

This is workplace chaos.  It is everywhere–though admittedly, not always as blatant as it was at that client.

Drama Fuels Workplace Chaos

Drama creates a dysfunctional workplace, where people work against each other instead of making progress.  Drama lowers morale across the organization, greatly lowers cross-department communication, creates disengaged staff, and makes you go home exhausted – because of the interpersonal friction, not from hard work.

Who’s to Blame? Depends on Who You Ask

Workplace chaos looks a bit different at varying levels of the organization.

From the employee perspective, chaos usually occurs because of a disconnect in understanding and communication between management and staff.  Employees see executive hypocrisy, hear mixed messages, perceive management decisions as uninformed, and struggle with the confusing politics of how to navigate conversations with leadership.

From the leadership perspective, chaos exists because the teams don’t function well together, staff rely on leaders to solve too many problems, people don’t do what they say, and consequently the company does not get optimal business results.

Determining the Business Cost of Workplace Chaos

Workplace chaos is commonplace, which implies that executives tend to let it happen.  But is there a financial cost to it?  If so, should executives do something about it?  Is there even anything that can be done?

There is a financial impact to a dysfunctional workplace, comprising several cost factors including:

Image of employees gossiping behind executive's back
  • Rework and waste are a direct result of a lack of cross-departmental trust and communication, with significant financial impact.
  • Lack of internal trust and communication leads directly to client dissatisfaction.  Customers are lost.
  • Gossip and interpersonal conflict prevent solutions, make people (inaccurately) feel beyond capacity, and make for dull meetings.  Disengaged staff costs money.
  • Low morale makes the good employees leave.  Recruiting new employees is expensive, and training new hires can take a year or more.



Cost of Workplace Chaos Impact Calculation

The information in the example below demonstrates the substantial business cost of workplace chaos. The information is aggregated from our work with clients. Here’s a formula you can use to calculate the financial impact of workplace chaos on your bottom line. Download our worksheet.

TAC4 workplace chaos calculator


Why Companies Aren’t Solving Workplace Chaos

Given its large financial impact, why is workplace chaos seldom fixed?

None of the Attempted Solutions Have Worked

Companies may have tried retreats, trust exercises, book studies, and paid a lot of consultant money with no improvements.

Executives Accept Chaos as Inevitable

Most executives think that workplace chaos is just the way life is, because humans just behave how they will behave.

Executives Aren’t Plugged into the Culture

What’s more, executives rarely hear the buzz of the actual culture in their company.  Staff and even managers are too nervous to say to executives what is really going on.  Therefore, executives think that the company down the road is the one with chaos, not theirs.

The reality is, unless leaders have a concentrated focus on productive workplace culture, workplace chaos is likely common.

Emergence of Remote Work Reduced Friction

In a post-Covid world with many staff still working remotely, workplace chaos may seem reduced.  Interpersonal conflict occurs when humans rub elbows.  With people at home and only talking to each other when necessary, drama is reduced.  However, workplace chaos may have risen, as the more dangerous cause of workplace chaos is a lack of cross-department communication.


How to Manage Workplace Chaos

Below you will find a sampling of proven techniques that can move a company from a dysfunctional workplace to an energized organization where everyone moves in the same direction.


No Gossip

Illustration of people gossipingHave a zero-tolerance policy for talking behind someone’s back.  Set the expectation that people talk positively about each other.

When there are issues to be addressed (e.g., low performance, missed deadline, bad behavior), set the expectation that those are direct conversations with the person only, with no preparatory or tangential conversations about the person.

The elimination of gossip instantly and hugely turns a workplace environment into a productive and enjoyable community of people.


Decision Forms

When a decision is made in a meeting, conversation, or email, ask whether anyone else could be impacted by the decision.  If so, pause to first complete a Decision Form that includes the following questions:
Illustration of clipboard

  • What exact decision are we making?

Writing this decision publicly in a group tends to bring out nuances and misunderstandings of the decision, allowing you to create clarity

  • What are the reasons for the decision?

Good for 2 months down the road when we want to change our mind

  • Who does this decision impact?

It is more than you initially think

  • How will we communicate this decision to each of the people/groups?

Carrying out this communication reduces 75% of cross-department misunderstandings.



Create an environment where everyone knows they must do what they say they’re going to do.
Illustration of hands shaking
When someone makes a commitment, make sure they know the deadline, put it in their calendar, and know that it is expected they will meet exactly the deadline.  If someone misses a deadline with no prior notification, go to them immediately to let them know that behavior is unacceptable and have them reprioritize their day to complete the task immediately.

When deadlines are always met, we greatly increase the productivity and standards of the company.



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