From the November 2003 issue of Entrepreneur

It's a sad fact of downturns: Employees stop speaking their minds because they fear losing their jobs. For employees watching the unemployment rate rise, it can seem safer to go along to get along.

But hear this loud and clear: Employee silence is killing innovation and perpetuating poorly planned projects that lead to defective products, low morale and a damaged bottom line, says Leslie Perlow, an associate professor of organizational behavior at Harvard Business School in Boston and author of the book When You Say Yes, But Mean No: How Silencing Conflict Wrecks Relationships and Companies . . . and What You Can Do About It (Crown Business). "Behind many broken processes, mistaken decisions and failed products are people who didn't speak up," Perlow says.

You need employee input to generate new ideas and keep projects on track. But how do you encourage honest feedback in tough times?

Consider Buyerzone.com, a B2B online marketplace for small-business purchasing based in Watertown, Massachusetts. The company underwent two rounds of layoffs in 2001, reducing staff from 80 to 18. For president and CEO Sam Zales, the silence was deafening.

"Every company has been hit by the external factors of the economy," says Zales, 39. For employees, he adds, it's meant "fewer risks and more concern about what's going to happen."

The challenge today is creating a culture where employees feel safe to offer constructive criticism-an attitude that starts at the top, says Bob Phillips, co-author of Absolute Honesty: Building a Corporate Culture That Values Straight Talk and Rewards Integrity (AMACOM). "The culture of the company drives a lot of the behavior," he says.

To keep employees talking, Zales holds a weekly "fireside chat" where he answers employee questions. He also rewards employee input that catches problems early on in projects. "Keep attuned to morale, and when [silence] happens, go informal with your communication," he suggests.

Silence isn't always bad; Zales uses it strategically to draw employees out. "When silence persists at a meeting, let it sit there for a minute to see if someone reacts to your comments," he says. These changes have helped morale and the bottom line. Buyerzone.com has 25 employees and projects sales of about $10 million in 2003.

Diagnose your workplace for warning signs of a silence problem. These include meetings where a few people do all the talking, a lack of recognition for feedback, and less brainstorming on projects. Phillips predicts employers who don't acknowledge the silence will hear the sound of footsteps once the economy improves. "A lot of [employees] will leave," he says. "And they'll start [speaking up] at their new companies."