Communicate or Your Business Will Die!

Author: Eashani Rodrigo 

Effective communication is considered to be one of the critical factors in the successful management of businesses. Companies today are increasingly seeing the importance of achieving a culture of effective communication as it delivers benefits from performance, productivity, and stronger employee relationships and customer relationships.

A study conducted by Towers Watson in 2009 (2009/2010 Communication ROI Study Report "Capitalizing on Effective Communication") found effective communication as one of the drivers of performance, especially during the times of economic challenge and change. Their report states, “Companies that communicate with courage, innovation and discipline, especially during times of economic challenge and change, are more effective at engaging employees and achieving desired business results." According to Watson term “courage” implies, when people are told what they need to know they will reward the company with performance; “innovation” implies, when employees are encouraged for creative thinking they will contribute with innovation; “discipline” implies, call for accountability during troubles times where a proper communication plan is needed to keep employees updated about company’s performance. Moreover, their report revealed that the companies that communicate effectively had 47% higher total returns to shareholders over a five-year period compared to the least effective communicators.

So What is this effective communication?

The purpose of any communication is to share information, which involves getting the message across to others clearly and unambiguously.  At work, effective communication is about knowing the employees (receivers) and choosing the right message to convey and the right channel for transmission. 

In general, communication is the process of exchanging information, thoughts and feelings through verbal (e.g. speaking) and nonverbal (e.g. writing or body language) channels. Extending this concept, an effective communication requires the transmitted content to be received and understood by the receiver (e.g. employees) in the way it is intended; this requires the understanding the emotion behind the information.  Therefore, the goals of effective communication are to create a common perception, to change behaviors and to acquire information.

For an example during an organizational change such as automation of businesses operations, people may resist the change due to the fear of losing their jobs or changing job roles. In a scenario like this, it is the leader’s responsibility to communicate the new change to the employees, as the communication is more effective when the employees receive accurate information from one reliable, credible spokesperson within the company.   Moreover, for this communication to be effective the leader should clearly explain with all required details making employees understand the intention of the organization to do the change. Similarly understanding the employees’ concerns is also important for this two way communication, and that helps to discuss and provide solutions for the employees concerns and to clear out the misunderstandings which normally occur due to lack of information sharing. At this situation, if a company effectively communicate their change to the employees in a such a way it will benefit in getting the employee support and commitment for the organizational change to be a success.       

So how effective communication can increase your company performance? 

As Watson’s study suggested, there is a strong link between company performance and effective communication. This linkage can be clearly understood by looking at the benefits it delivers to the businesses.  

• Employee motivation

Effective communication helps for better understanding of people and situations. This can be achieved through listening to the feedback from employees and practicing empathy. In return, this will help to build trust and respect in employees toward the company management. The trust in management can build employee loyalty towards the company, and will motivate them to support company long-term and shirt-term goals.

For an example, when a company go through a crisis situation it might require cost reductions in business operations and increments in sales within a short-term.  If the company management imposed rules and new plans without proper information of the crisis situation, this can result in employees objecting new plans without knowing the real situation. Therefore, if the company management clearly communicates the current situation the company faces and gets the feedback from the employees, it will build the trust between the company and management and it will motivate the employees to work on new plans to overcome the crisis situation as a one unit.  

• Company productivity

Effective communication helps to communicate a message clearly and unambiguously making the receiver to understand the intended message. This helps organizations to save time on repetitive communication, to avoid misunderstandings and to immediately start acting upon the message.

For an example, emails are popular channel of company communication. When writing emails the message should clearly written with proper information considering the receivers.  If the same email needs to be sent to different receivers, the email should be written in a way that every receiver could understand the message (e.g. avoiding jargons). If the message is not clearly understood by the receivers this will end up in lengthy email conversations costing time and frustration due to conflicts, which will result in losing daily productivity of operations.     

      

•  Workplace harmony

Effective communication helps to clearly convey messages and for better understanding of people and situations. Workplace conflicts happen due to misunderstandings among people. Therefore, effective communication helps to reduce workplace conflicts and frustrations. This can be achieved through creating a company culture where clear and honest communication is present. Having workplace harmony can create a better environment for the employees to work and to perform.

For an example when working in projects as teams, the lack of effective communication can create conflicts among team members resulting poor performance, costing more time and effort leading to failures in projects.

• Building strong relationships with company internal and external parties

Effective communication in work place does not only limit to the communication with employees. It also should be practiced when communicating with external parties of the company such as, customers, company suppliers, partners, shareholders etc.  By avoiding conflicts and misunderstandings, effective communication helps organizations to build strong relationships with internal and external parties of the company. It is also important for the communicators to make a clear distinction between internal and external communication.

For an example, getting the right message cross to the customer and getting the customer feedback is important to resolve customer complaints and to bring new ideas for the improvement of the products and services. Similarly, suppliers also should get clear and unambiguous information to provide continuous services and products for the company requirements.  For an instance, if the company did not clearly communicate and agree on supplier delivery dates and the quantity of orders it will result in conflicts between the supplier and the company resulting delays in production.

This shows that all these benefits of effective communication ultimately link to company performance. Therefore, for any company effective communication is essential for the smooth running of the business.

The next part of this article on effective communication will discuss about, “how to achieve effective communication forsuccessful management of your organization”.