CEO Insight: Poor Communication Costs Your Business (read on to find out more)
The stakes are high for tech companies today to adapt and scale their operations. Trends like global digitisation and remote work have become mainstream while workforce and customer demands continue to escalate and create new challenges for businesses. As a result, it’s never been more perplexing for CEOs to manage and grow their organizations effectively.
Yet, many do not realize there is one overlooked issue that’s seriously costing their organizations—one that, if addressed, could significantly enhance their business: poor communication. For product companies with offshore tech operations and IT outsourcing service companies collaborating on software projects and having to speak in the specialised language of software: poor technical English communication.
The recent “State of Business Communication” survey of business leaders and knowledge workers suggests poor communication is rampant in the workplace—with direct effects on business results. The study by Grammarly and The Harris Poll estimates a $1.2 trillion annual loss among U.S. businesses due to poor communication—or approximately $12,506 per employee every year.
By exploring communication trends, challenges, preferences, and tools, the survey explains why success in a hybrid landscape hinges on improving communication. Additional top-line findings include:
- 96% of business leaders agree that effective communication is essential for delivering the business results expected of their team in the coming year, but nearly three in four (74%) say their company underestimates the cost of poor communication.
- Three in four business leaders (75%) say they spend too much time and energy resolving miscommunications, and those that grew revenue in the last year are more likely to say their team communicates effectively (92%, vs. 81% whose revenue declined or did not change).
Overcome bad communication to achieve growth and profitability: Nearly all business leaders (93%) acknowledge that effective communication is the backbone of business, but the study reveals the widespread effects of poor communication on business results. Over nine in 10 business leaders say poor communication impacts productivity, morale, and growth, contributing to increased costs, missed or extended deadlines, and reputational erosion. One in five leaders even lost business or deals due to poor communication.
Evolve the employee experience with better communication: Amid the Great Resignation and rising workforce expectations, most business leaders (57%) cite employee satisfaction and retention as a top priority for the coming year—ahead of team productivity and customer satisfaction. But the vast majority of employees (86%) experience communication issues at work, and they cite increased stress as the top impact. The study also links communication with turnover: business leaders reporting higher employee retention were more likely to have better communication.
The findings are especially relevant for communications-heavy teams like software teams as they engage with team members, customers and different stakeholders on new technologies languages and stacks, across different project requirements, constraints and objectives. And while the cost alone is staggering, the findings go much deeper—illuminating the far-ranging impacts of ineffective communication today and the need to fundamentally rethink productivity and engagement in the workplace.
The cost of poor communication in the workplace can be significant and multifaceted. Let’s take a closer look at several ways in which it can impact businesses and the implications for your business to succeed in the next era.
1. Reduced Productivity: Miscommunications or unclear instructions can lead to mistakes, delays, and rework, ultimately impacting overall productivity. When employees struggle to understand expectations or lack essential information, it hampers their ability to perform effectively.
2. Employee Disengagement: Poor communication can contribute to a sense of confusion or disconnect among employees. When individuals feel uninformed or undervalued, their engagement levels can drop, leading to lower morale and decreased commitment to their work.
3. Conflict and Stress: Misunderstandings and unclear communication can breed conflicts among team members. Workplace stress often arises from communication breakdowns, strained relationships, or the feeling of being left in the dark about important matters.
4. High Turnover: Employees who feel disconnected due to poor communication may seek opportunities elsewhere. High turnover rates not only result in recruitment and training costs but can also negatively impact team morale and productivity.
5. Customer Dissatisfaction: In customer-facing roles, poor communication can lead to dissatisfaction among clients. Whether it's delays in response, inaccurate information, or misunderstandings, the repercussions can extend to customer relationships, impacting the company's reputation and bottom line.
6. Innovation Barriers: Effective communication is essential for fostering a culture of collaboration and innovation. When ideas are not shared or understood properly, it stifles creativity and hinders the development of new solutions.
7. Project Failures: Clear communication is crucial for successful project management. Poor communication can result in missed deadlines, scope creep, and overall project failure. This, in turn, can lead to financial losses and damage to the organization's credibility.
8. Legal and Compliance Risks: In industries with regulatory requirements, poor communication can lead to non-compliance issues. Failure to communicate critical information related to legal matters, safety protocols, or compliance standards may expose the organization to legal risks and penalties.
9. Wasted Time and Resources: Meetings, emails, and discussions that lack clarity or purpose can consume valuable time without yielding productive outcomes. Inefficient communication channels and practices can result in wasted resources that could be better utilized elsewhere.
10. Missed Opportunities: In a dynamic business environment, opportunities arise quickly. Poor communication may lead to missed opportunities for collaboration, partnerships, or innovations that could benefit the organization.
In summary, the cost of poor communication in the workplace extends far beyond financial implications. It affects the overall health and functioning of an organization, impacting employee well-being, customer satisfaction, and the ability to adapt and thrive in a competitive landscape. Investing in effective communication strategies and fostering a culture of transparent and open communication can help mitigate these costs and contribute to the long-term success of the organization.