|Poor Communciation Can Cost You
By Mark W. Sheffert
There was a nice dog named Spot who was hanging out of the passenger-side window
of his owner’s car as it backed out of the driveway. He saw the neighbor dog, Biff, just
sitting in his fenced-in yard and arrogantly yelled out, "Ha, ha, ha, Biff. After we go to
the post office and dry cleaners, I’m going to the vet’s to get tutored."
Spot, the star of a Far Side cartoon, learned the hard way that miscommunication
can be costly and sometimes very personal. Many business managers have learned poor
communication habits can be costly in business as well.
Those costs won’t neatly appear on the profit and loss statement in a category
called "miscommunication," but nonetheless can add substantially to a company’s
expenses. It is estimated that miscommunication can cost an organization between 25
percent and 40 percent of its annual budget.
When our firm assesses a troubled organization, we often find that declining sales
and profits are only telltale symptoms of a larger problem in the company’s culture.
Poor communication is usually one of those major culprits.
Sometimes it’s by accident but sometimes it’s not. Poor communication is the best
way for the incompetent to hide their incompetence. No one can criticize the message if
no one understands it. Also, one must realize that there are 14,000 different definitions
for the 500 most commonly used words in the English language --- no wonder miscommunication
With this in mind, you must constantly evaluate the communication behaviors
and methods within your own organization.
What was that?
Start at the top by evaluating communication methods and habits with board
members. Are your board meetings characterized by quarterly show-and-tell presentations
by management with little give and take of ideas? If so, maybe it’s time to get your
board members more involved and unleash the good ideas and experience that they can
contribute. Make regular informal phone calls to board members to keep them
up-to-date on strategic issues.
Create reports that convey information from which decisions can be made (not
just data dumps), and send them to board members well in advance of meetings.
What about communication with your managers? Do you prefer to sit in your
office and crank out e-mails and memos, or do you have regular staff meetings that are
concise and productive? You’ll be well on the way to uncovering the costs of poor
communication if your management team is working together with full knowledge of
what the other managers are doing. It’s your job to demand that the management team
encourages good ideas, listens to one another, and reaches consensus on solutions that
are clearly defined and documented.
Next, think about communication with employees. Do you have personnel
policies and operating procedures written in plain language that everyone can
understand? Is your mission statement written down and widely distributed? Do you
have regular employee meetings where you freely discuss important issues facing your
company and where company performance is at relative to your goals (even if it’s not
good news)? If you want everyone to communicate well to improve productivity and
problem solving, you must set the example by following these ideas.
To be a good communicator you need to be a good listener, unlike the story of
the Mother Superior at a convent in Poughkeepsie, N.J. where the nuns were asked to
demonstrate their commitment by being allowed to utter only one sentence every five
years. After Sister Francine’s first five years, she appeared before the Mother Superior
and said, "My room is too cold." Mother Superior thanked her and sent her on her
way. After another five years, Sister Francine’s sentence was, "The food here is terrible." Mother Superior thanked her and sent her on her way again. After another five years,
Sister Francine was beckoned to say her third sentence in fifteen years. She said, "My
room is still cold, the food is still terrible, and I quit!" To which the Mother Superior
replied, "I think that’s appropriate. You’ve done nothing but complain ever since you
got here anyway."
As you can see, some managers have a difficult time listening because they only
hear complaining. Don’t fall into that trap. Learn to discern between complaining and
bringing your attention to serious problems. Listen attentively and take action on what
your employees tell you.
Ads communicate, too
Communication doesn’t stop at your front door. Customer satisfaction and loyalty
ultimately measure whether or not your company has good communication habits.
Evaluate all points of communication with customers to make sure the
information provided is clear and concise. For example, do your ads announcing a
new product or service make promises that you won’t be able to deliver … ever?
Are your sales people adequately trained on the product’s features and performance
so potential customers clearly understand what they are buying? Does your order system
confirm the order with the customer and let them know when it will be delivered? Are
the written instructions provided with the product easy to understand?
Many companies we’ve worked with had beautiful marketing materials and
top-notch sales and customer service people, but still missed the mark because they
knew what the customer should have instead of listening to the market. Remember
that communication is a two-way street. Listen carefully to your customers or else they
will move on without you.
Vendors are also an important audience. It’s easy to imagine the hidden costs
from poor communication resulting in the late delivery of crucial parts or built-to-order
components that don’t work in the completed product because of unclear specifications.
Evaluate your entire purchasing process to uncover potential communication bombs.
And don’t forget to talk to your lender! Most business people would rather have
a root canal than meet with their banker, but it’s just good business sense to make sure
that your banker understands your business and knows what’s going on. Make a point
for the two of you to review your business plan on a regular basis. If your company ever
runs into trouble or is growing at a rapid rate, your lender will be more willing to work
with you if you have established a relationship beforehand.
Last, but certainly not least, are the shareholders and the media. Business people
are usually natural-born sales people, so it’s easy for them to give glowing presentations
at the annual meeting about super-fantastic new products being prepared for enormous
growing markets. Unfortunately, I know of too many companies where the shareholders
and reporters were then in for a major surprise when they received the next quarter’s
announcement that the company was in deep doo-doo. Poor communication with
shareholders and the media can create unclear expectations, resulting in disappointment
and a declining stock price.
The bad news is that being a good communicator is never easy. The good news is
that you don’t have to be Ronald Reagan, Martin Luther King, Jr., or Winston Churchill
to follow some of these ideas. Even we old dogs - including Spot - can learn new tricks
by focusing on effective communications.
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