Why investing in effective business communication makes sense

Why is effective business communication important for business? Good communication matters because business organizations are made up of people. For people to work well together, they need to be able to communicate effectively. Robert Kent, former dean of Harvard Business School said, “In business, communication is everything.”

In a typical day, top managers spend 75 to 80 percent of their time engaged in some form of written or oral communication. And when you get to the top management team, it could be as much as 90 percent of their time. In times past, communication was often referred to as a “soft” skill, and not viewed as important. Today it is considered the most critical skill leaders need.

Let’s examine three reasons why it make sense to invest in improving business communication:

1. Ineffective communication is costly

According to a global study sponsored by Siemens Enterprise Communications, conducted by SIS International Research, on average, 70 percent of employee respondents of small and medium businesses (SMBs) with up to 400 employees said they spend 17.5 hours each week addressing the "pain points" caused by communication's barriers and latencies.

In addition, researchers at SIS International Research determined that the time spent per week dealing with communications issues was more than 50 percent higher in companies with more than 20 workers. In hard costs, the study concluded, companies of 100 employees could be losing more than $500,000 each year by not addressing their employees' most painful communications issues.

The study identifies these top five pain points, in order of estimated cost as:

• Inefficient coordination: trouble coordinating communications among team members, slowing the realization of goals and deadlines.
• Waiting for information: work delays while waiting for information from others that they have attempted to reach live multiple times using multiple methods.
• Unwanted communications: low-priority e-mails, calls, and voicemail. These interruptions create distractions and disrupt workflow, leading to lower productivity and missed deadlines.
• Customer complaints: dealing with negative comments or complaints from customers, specifically because they were unable to reach them in a timely fashion. Loss in productivity is significant, but the true cost of customer dissatisfaction may be much greater.
• Barriers to collaboration: Difficulty establishing collaboration sessions with colleagues to address issues of inaccessibility or lack of full collaboration.

In hard costs, your company could be losing up to half a million dollars each year by not addressing employees’ most painful communications issues! These costs are hidden, because there isn’t a line on the balance sheet to account for poor communication. Nothing shows up saying, “lost productivity due to miserable meetings,” or “missed business opportunity through lack of clarity in answering customer questions.” The cost is nonetheless real.

On the other hand, you could save as much as 20 percent of hidden costs due to fragmented and ineffective communications by improving communication skills in your leaders and employees. It's clear that investing in developing effective business communication will yield a significant return on investment.


2. Changing environment and increased complexity require more effective communication

Today's flatter organizations, a more diverse employee base, and greater use of teams, have all made communication essential to organizational success. The days when you could just order people around are finished. The autocratic management model is being replaced by participatory and collaborative management models.

At present, the majority of companies use teams for many of their functions. Teams are all about communication. The collaboration that allows organizations to capitalize on the creative potential of a diverse workforce depends on communication.

Communication is the key to build trust, promote understanding, influence people, and motivate others. In other words, communication is the way to transact business.

3. Globalization challenges demand effective communication

The ability to compete in the global economy is one of the greatest challenge facing business today. Talking about this challenge, Marty Blalock, form the School of Business at the University of Wisconsin says:

“Organizations will want to negotiate, buy and sell overseas, consider joint ventures, market and adapt products for an international market and improve their expatriates’ success rate. All of this involves communication.”

Poor communication is frustrating on many levels. The financial costs caused by ineffective communication are high but avoidable.  By investing in the communication skills of top and middle managers, companies will increase productivity and decrease costs. They will also create a positive work environment, which benefits everybody.

What do you think?

How much time and money are you and your team waisting due to ineffective business communication? Which area do you and/or your organization need more help with? Share your comments with us.

Photo: Jessica Rabbit's

Are you ever frustrated by poor communication? How much time and effort you spend un-saying your ill chosen words? Do you know how to deliver the right words, at the right moment, with the right attitude? I can help you learn to communicate more effectively. To find out how, Contact me today