How Communication Affects Your Business’ Bottom Line

Effective Communication is a critical component of effective leadership across the board for all businesses, and its impact on business can mean big bucks. Poor communication has been estimated to cost large businesses (400 to 100,000 employees) tens of millions of dollars every year. The annual cost to smaller companies is in the hundreds of thousands.  (*Third Level)

The Costs on Businesses’ Bottom Line due to Poor Communication

Some of the costs associated with poor communication are tangible:

  • missing deadlines
  • Failure to deliver a product or service
  • Lost productivity
  • High employee turnover
  • Loss of sales
  • Collapse of negotiations or a business deal
  • Poor customer service

Other costs may not be as obvious, but are just as destructive to the bottom line.

  • Tension in the workplace
  • A lack of trust and/or respect between employees, and between employees and management
  • Misunderstandings
  • Missed opportunities
  • Lack of discipline
  • Loss of employee motivation
  • A negative effect on innovation

Learning Effective Communication

Although effective communication may not be an innate skill for everyone, it is something that can be learned – on both the individual and the corporate levels. Leaders need to make communication a priority from the top down, providing regular opportunities for information to be shared in both directions between all levels of the organization. It’s not enough to assume employees know what’s going on or will be able to “figure it out” on their own; nor is it realistic to assume that employees will feel comfortable sharing information with colleagues and management.  Providing a focused instructional workshop by an impartial professional is a very valuable and beneficial investment in the workforce and company.

Factors that Harm Good Communication

The foundation of good communication begins with a company’s leader, who makes it clear from the beginning that communication is not just about talking and sharing information, “but also listening”.  We must all be ready to listen to our co-workers, superiors and subordinates.  In order for an organization to make the best of their workforce, they must take advantage of everyone’s contributions, ideas, observations, and resources.

It is this combination of all employees, especially tapping into the diversity to gather the best knowledge and experience, which will benefit the whole company/organization.  However, if some do NOT respectfully open themselves to this opportunity, they are hurting the organization and being disrespectful of others.

Good Communication becomes more “effective” when the entire organization includes and examines all ideas, suggestions, and constructive criticisms in order for the group to be its best.

Power of Listening

One of the keys to effective communication, often overlooked, is the ability to actively listen (what is called the Power of Listening). The Power of Listening is a set of skills individuals can develop for use in the personal, as well as the professional world. It involves listening with all of the senses, and connecting with the emotions and values that underlie what the other person is saying. A Power Listener “receives” information neutrally, focusing on the speaker’s experience and point of view without the context of pre-conceived notions or judgment.

The monetary cost of poor communication should be a reality-check for every leader, member of management, and business owner. Fortunately, the challenge of poor communication can be tackled effectively, and the loss of revenue can be addressed. As with so many issues in the workplace, meeting the problem head-on with a commitment to long-term change will bring about cultural change, and, ultimately, success.  (*A Source:Third Level)

Next Steps

Compass Career Management Solutions provides an excellent Effective Communication Workshop, which is designed to include a maximum of 20 attendees per workshop.  This allows for better exchanges and more successful results.  There is some flexibility in this program, particularly if some issues need more time allotted and additional topics added.  The workshop is typically 3-6 hours in length.  Therefore, there is also a range of prices.  Compass Career Management is known for its customization for best results.  This service is adaptable for professional and hourly employees.