The Rumour Economy
The informal systems that shape culture when the org chart stops working
We talk about organisational culture as if it were a mood: upbeat or toxic, strong or weak, aligned or fragmented. In practice, culture is a web of shared assumptions about what is safe to say, how decisions really get made, what “good” looks like, who counts and what happens when you challenge the room. Most of those rules are not written down. You learn them by watching what happens to people.
This piece is shaped by conversations with Jason L Zimmerman (M&A practitioner), Victoria (organisational leader with lived experience of post-merger dynamics), and Cécile (HR consulting).
Across our experiences, four patterns kept returning. So what follows is a set of four cultural insights for periods when the ground is moving in an organisation. Think of leadership transitions, major reorganisations, mergers and acquisitions or strategy shifts that change how power flows. These are classic moments when the official story gets ignored, and an unofficial one takes over.
The Unofficial Organisation That Runs the Organisation
Most companies have two structures. One is visible: the org chart, the job titles, the reporting lines. The other operates behind the scenes: it’s the network of informal power that determines who gets heard and which problems are allowed to exist.
Building on the complex dynamics taking place in the Corporate Jungle, Victoria called our attention to some hidden dynamics and actors: gatekeepers, translators and trusted few who become pivotal when formal structure is missing or mistrusted. It’s almost as if organisations had their own mythology.
The concept of a Shadow System (Stacey, 1997) can be used to describe the informal network of relations within the organisations that are evident in casual hallway conversations, along the grapevine, through the rumour mill and in the informal procedures for getting things done.
This is the first cultural insight: the unofficial organisation takes charge when culture is in motion. It is what people do to create coherence and clarity when the official system cannot answer important and consequential questions.
That is also why reorganisations often disappoint. You can redraw reporting lines in a day, but you cannot rewire credibility and influence at the same speed. So, in practice, culture doesn’t follow the org chart; it’s the org chart that tries to catch up with culture.
Culture is an Information Environment Before It is a Set of Values
Organisations should ideally share interpretations and worldviews. When information flows freely, people can disagree productively because they are arguing from a similar picture of reality. When information is polluted, disagreement turns personal, because people are no longer debating options but what is happening at all.
Mergers and acquisitions magnify information asymmetry. One group hears “synergies”; the other hears “redundancy.” When signals are ambiguous or decisions unclear, both interpretations are rational. Jason noted, from years of observing deals, that uncertainty doesn’t produce resistance so much as watchfulness. People observe which projects move forward, whose voices carry weight and which questions shut conversations down. Over time, those patterns teach what the culture rewards and punishes.
The pattern is this: a culture is shaped as much by what people have to guess as by what they are told. When gaps in information appear, they create a market for explanation. In that market, rumours spread because people are desperately looking for orientation.
If leaders want to shape culture, they should think less about slogans and more about the quality of the information environment that people experience. Predictability and clarity lower the social cost of participation; vague reassurance raises it, by forcing individuals to do their own private risk calculations.
Culture is an Identity Economy
In stable times, we tell ourselves that we work for a mission, a product or a set of values. And we rarely reflect on the fact that most of us have a very human need to belong and feel like we are useful; we want to be adding value and to be surrounded by allies that ‘get us’.
Company mergers are one of the fastest ways to expose this because they change the social currency. The old signals of identity, status and competence can be devalued without warning. People who were central become peripheral. People who were unknown in an organisation suddenly become essential.
Dramatic organisational changes like mergers and acquisitions (M&As) often result in rather low levels of employee identification with the organisation. This puts the financial and strategic objectives of M&As at risk, because lower post-merger identification results in more conflict, lower motivation, and as a consequence decreases organisational performance (Giessner et al., 2012).
This is why attempts to integrate different groups often produce factions even in much simpler situations than mergers, and between reasonable adults. And this is what we learned: organisational culture rewards narratives that preserve identity. When identity feels threatened, collaboration starts to feel risky. A colleague’s success can look like a forecast of your own redundancy. A leader’s silence can be read as a verdict.
If you want culture to move, you need to understand what identity (or, indeed, identities) is being protected and how the system can be rewired for the desired shift to occur.
Under Uncertainty, a Set of Hidden Rules Emerges
Cécile’s experience in HR consulting gives us a helpful way to interpret the impact of uncertainty on people’s behaviour. When the environment feels safe, cooperation is rational. When the environment feels volatile, self-protection becomes rational instead. People gravitate towards the herd: they try to avoid being isolated and invest in alliances that reduce perceived risk.
This is where bad cultural habits can become normal, and undesired patterns can survive and spread because the social conditions for accountability deteriorate. In calmer periods, a team might challenge an abrasive leader or raise concerns about corner-cutting. Under uncertainty, people (naturally) hesitate. They do not know who will still be here. They do not know which alliances will matter. They do not know whether dissent will be remembered (and by whom). And in that kind of environment, where everyone is guessing and watching, people start relying on stories to decide how to act. That’s where Weick’s work on sensemaking comes in.
Weick’s theory describes sensemaking as a social activity in that plausible stories are preserved, retained or shared. However, the audience for sensemaking includes the speakers themselves and the narratives are “both individual and shared...an evolving product of conversations with ourselves and with others”.
That means people don’t just absorb information, they interpret it, test it with colleagues and refine their views based on what they observe and experience. Over time, those shared interpretations become unofficial truths. And once a story takes hold, it shapes how people behave. So, uncertainty teaches organisations to optimise for survival rather than excellence.
There is a more hopeful implication, too: coping playbooks can be rewritten. If leaders make it safe to surface problems by building psychological safety early on, reward appropriate dissent and protect those who raise legitimate risks, they shift what people learn. If they treat uncertainty as an excuse to centralise information and punish discomfort, they teach fear. The most successful reorganisations we’ve seen had one thing in common: leaders close to the ground stepped up early, offering clarity before confusion could take root.
How to Stop Uncertainty From Becoming Culture
Pressure doesn’t create a new culture from scratch. It accelerates whatever is already latent, and it does so through mechanisms that are easy to miss if you only look at values statements and engagement surveys.
During change, informal power networks start doing more work because the formal system is slow to answer questions that matter: What is changing? What is safe? Who decides? Who is protected?
At the same time, the information environment becomes decisive. When people do not have clarity, they do what humans always do: they infer. They treat silence as data. They notice where momentum gathers and where energy drains away: which ideas keep moving, who gets taken seriously and which moments close a line of inquiry. Those signals accumulate into an unofficial story, which hardens into a shared reality that shapes behaviour long before formal announcements have an opportunity to land.
So, if ambiguity is handled poorly, defensive behaviour becomes a norm. Rumour becomes a substitute for communication. Silence becomes a substitute for disagreement. People who can perform certainty gain influence, while people who raise genuine problems start to feel socially expensive. From the outside, the organisation may still look productive. Inside, it begins to lose the capacities it will need most: candour, challenge, learning and trust.
The leadership implication is quite practical rather than inspirational. If you want culture to improve, reduce the forms of uncertainty that force people into self-protection. You cannot remove ambiguity altogether, and you do not control how everyone will interpret events, especially in fast-moving contexts. You can, however, tighten the system around a few disciplines: treat information as a design problem; name what is known and unknown with care; make decisions legible (including who owns them and what changes when new information arrives); and protect the people who surface legitimate risks early enough for the organisation to act.
When people can see that telling the truth is safe, the unofficial organisation starts rewarding different behaviour. Translators help with clarity rather than politics. Gatekeepers become conduits rather than obstacles. The system learns that raising problems is part of continuous improvement rather than a career hazard. That is what it looks like when uncertainty is just a phase, instead of becoming the culture.
Credits and collaboration
This essay was shaped by a collaboration between The Art of Asking Questions and:
Jason L Zimmerman: M&A perspective and lived patterns.
Victoria: shadow hierarchies and the corporate jungle.
Cécile: HR consulting lens.
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This is an excellent collaboration - so spot on!
This is such a great read for this time of year when people are reorging and restrategising at full speed. It reminded me of the work I’ve done on how narratives are defined by those with power, I love this take on how the worker bees fill in the gaps when announcements are vague and how that impacts culture. Thank you everyone!