Internal communication is a key success factor for nearly 79% of organizations, and yet 29% of employees believe their current internal communication tools aren’t working.

If you’re not focused on improving communication in your small business, you need to read this.

Why? Well, for starters, a report by The Economist Intelligence Unit revealed that poor communication can result in: 

  • delayed or failed projects (44% of respondents), 
  • low morale (31%), 
  • missed performance goals (25%) 
  • and lost sales (18%) — potentially worth hundreds of thousands of dollars.

Joseph Grenny and Kerry Patterson, both New York Times bestselling authors, and  respectively a social scientist and corporate trainer — report in their book, Crucial Conversations Tools for Talking When Stakes Are High, that “…close to 80% of the projects that require cross-functional cooperation cost far more than expected, produce less than hoped for, and run significantly over budget.” 

After studying 2,200 projects and programs rolled out across organizations across the world, their research showed that you can predict with 90% accuracy which projects will fail — months and years in advance — based on certain communication metrics.

But if effective communication is so important, why don’t we prioritize improving our communication? After all, doesn’t almost every job description require “strong communication skills?”

Since June is Effective Communications Month, we figured we’d share some actionable tips so you can learn how to improve communication in your small business.

Get the bonus: Download your Small Business Communication Checklist [PDF]

Let’s get started…

Communications Problems are Costly for Small Businesses

As a small business owner, you know improving your company’s communication is important under normal circumstances.

And until recently you’ve done the best you can. 

But now — in the face of the COVID-19 pandemic and the ensuing uncertainty — improving your internal communications is more important than ever. 

Communicating clearly is how you meet your customers’ needs and achieve your business goals. When you fail to communicate effectively, it can be costly:

  • Data shows miscommunication at smaller companies with 100 employees costs an average of $420,000 per year while a Holmes report puts the cost of poor communication at $37 billion
  • Another study from Siemens Communications estimates that small businesses with 100 employees could be leaking a staggering $524,569 annually as a result of communications barriers
  • That same study breaks down the cost of the top four communications pain points for small businesses in USD per knowledge worker per year
    • Waiting for information costs $9,970
    • Unwanted communication costs $7,254
    • Inefficient communication costs $6,609
    • Barriers to Collaboration cost $6,009

When you run the numbers, it’s easy to see the impact on a business’ bottom line (It adds up to $26,041 per knowledge worker per year.). Especially when you consider that 40% of the work week is lost to these inefficient communications and most of these employees are in customer-facing or decision-making roles. The negative effect on crucial business processes, revenue, and customer satisfaction becomes painfully obvious. 

How Poor Communication Impacts Your Employees

We’ve looked at the effect poor communication has on small businesses and the facts are sobering.

As if that wasn’t enough, ineffective internal communication also affects your employees. When your employees feel information is buried or hidden, they’re left out of the loop, or worse yet — communication from company leaders feels dishonest or incomplete, it causes problems.

Reasons Companys Internal Communication Is Not Working - Neat Blog

Image caption: Sprout Social, Inc.

When there’s a lack of communication from the company leadership, employees take notice:

  • According to employee engagement expert Marcel Schwantes, four of the top eight mistakes that managers make are issues of communication
  • A 2014 survey found the top three reasons employees left an organization were communication-related: 
    • a lack of direction from management; 
    • poor communication overall; 
    • poorly communicated constant change

But, according to a study performed by Watson Wyatt, businesses with effective communication practices were more than 50% more likely to report lower than average employee turnover levels.

7 Tips to Improve Your Small Business Communication in 2020 and Beyond

So, how exactly can small businesses improve communication?

1. Observe The Five C’s of Effective Communications

If you incorporate these five qualities into all your communications, your business relationships will improve.

    • Clear: Make sure your purpose and intent is clear to the reader.
    • Concise: Include all the necessary information.
    • Complete: Include only necessary and relevant information.
    • Correct: Make sure the information you share is accurate. 
    • Courteous: Address people politely.

2. Use the appropriate channel

There are times when an email is appropriate and other times when a phone call or in-person meeting is more suitable. Misreading the situation and choosing the wrong channel can create confusion and cause communication breakdowns, misunderstandings, and hurt feelings. When you’re unable to communicate face-to-face, it’s easy for messages to get lost in translation without the right context.

 

3. Respond in a timely manner

You should aim to respond to people within a reasonable amount of time. A recent study found 41% of people expect coworkers to respond within an hour. 68% of employees experience work delays because they’re waiting for information from others they’ve attempted to reach live multiple times using more than one method. The average delay? 3.5 hours per week, per knowledge worker. That’s a long time to wait before making progress on a particular task and could negatively affect critical business processes. 28% of employees reported poor communication as the primary cause of failing to deliver a project within its original time frame, according to a survey by the Computing Technology Industry Association.

 

4. Remove barriers to collaboration

61% of employees find difficulty establishing collaboration sessions with colleagues. Plus, they spend an average of 3.3 hours per week attempting to address inaccessibility issues, or other problems (caused by communication tools) resulting in less than full collaboration with colleagues.

 

5. Talk less, listen more

It’s important to make time to listen to your employees and customers. They may have ideas that will improve your business. Although you can learn from them, be honest about how you will act on their feedback and ideas.

 

6. Always set an agenda for meetings

No one likes a meeting that’s gone off the rails. Keep the dialogue on track and run your meetings without going over the allotted time by using a written agenda.

 

7. Eliminate jargon

Make plain language a policy to be upheld in meetings, emails, and other business communications. Make sure jargon is eliminated from your in-house conversations as well or you risk using industry buzzwords when talking with customers.

Some Parting Thoughts on Effective Communication

As you’ve seen, communication can either make or break your small business.

The good news is that since it’s June, you have six months left in the year to fine-tune your communication skills. 

Why not work one or two of these tips into your routine each month and encourage your employees to do the same? You have nothing to lose and you could end up with more engaged employees, less employee turnover, and keep your projects under budget.

And if you want to make important documents and information easily accessible, Neat can help you save time by removing inefficiencies with paper documents.

Start a 15 day trial.