The Costs of Poor Communication
From lost relationships to steep financial penalties, the price of poor communication is high, research shows.
By Rich Maggiani, Solari Communication, special to The Content Wrangler
Poor communication costs business millions of dollars every single day. Most executives and managers understand this, yet they don’t realize how big a part they play in this miscommunication.
Financial statements do not carry a line item for poor communication, although they should since, with a little effort, it can quickly be quantified.
Communication is vital to the success of your organization. To be most effective, communication must circulate and reach all levels, not just the core.
Different forms of poor communication
Here are but a few:
- Long, unproductive, numbing meetings without a clear purpose or agenda, often reaching no conclusions, result in lost productivity as well as the collective time of everyone attending
- Poor documentation neglects to mention the purpose of the software or hardware and only explains how it works. Users, however, don’t care how it works; they want to know how to use it!
- Uninspired selling skills and anemic sales presentations showing no interest or understanding of a prospect’s needs, result in missed opportunities and lost sales
- Rambling, cryptic, and incoherent emails that are misunderstood or ignored, result in wasted time. Often (up to 50% of the time) an email’s tenor is incorrectly perceived, simply because body language cannot be analyzed and tone of voice not perceived; this results in hurt feelings, ill will, and inaction
- Distracted managers who simply do not or cannot truly listen alienate staff and lower morale. Staff members who realize they are not being listened to and simply patronized, themselves stop communicating
- Staff members from different generations or gender lack a basic understanding of each other, their communication styles, and preferences. Incomprehensible and inappropriate statements are commonplace. Baby boomers (thinking it’s still the ’70s) and today’s generation (who were not even alive then) simply do not share the same communication foundation
Poor communication squanders time, wastes effort, erodes loyalty, and loses business.
Squandering time—Poor communication simply takes longer to process and understand, if understanding can be attained. Unnecessary questions are asked, discussions are needlessly lengthy, the communication is recreated, only to be foisted again on a wary audience.
Here’s an example of an email received by a colleague: “The company may need the more accurate methodology since it’s the standard approach employed of the more approximate method that may result in an estimate that under-estimates and not on-target estimates.” After a lengthy conversation with the sender, my colleague’s client rewrote the email. Final squandered time for one email: six hours.
Wasting effort—My bank’s CEO recently sent every customer a letter explaining the bank’s checking account overdraft policy: five dense paragraphs. The policy was more onerous than the current overdraft protection plan. Many customers didn’t appreciate the change and called to protest, inundating the bank. The customer service representatives explained why the letter was misleading and inaccurate. As a result, the CEO planned to rewrite and resend the letter. The CEO’s effort fell prey to the 30% of business letters that initially fail.
Eroding loyalty—According to an Accenture study, American consumers returned $13.8 billion in electronics in 2007; Europeans returned $11.5. That’s over $25 billion. Between 60%–85% had nothing wrong; that’s between $15.2 and $21.5 billion in perfectly functional equipment returned. Why? Confusing interfaces, features difficult to access, no customer education, weak documentation were overriding factors—all issues that superb communication could solve. $25 billion! That’s a lot of lost loyalty.
Losing business The presentation was wonderful, beautiful slides, expertly delivered—all about the expertise of the company who was leading the proposal. Unfortunately, the state agency wanted to know how the company would solve the agency’s problem and support their budget. Instead, the agency got egotistical fluff. The agency, rightly, awarded the contract to another firm; the company came in “second”.
How big a cost?—Poor communication cost Merck $253 million after losing their first Vioxx trial. Why? The jury was befuddled by Merck’s scientific explanations.
[Editor’s Note: Since Merck lost the Texas Vioxx trial referenced above, it has announced it will also pay plaintiffs a whopping $4.85 billion (US) to settle an additional 27,000 related lawsuits, rather than go to trial.]
Positive results—Thoughtful, effective communication delivers unparalleled benefits to both you and your audience. Effective communication reaps positive results: increased market valuation and stockholder value; greater employee commitment, involvement, retention, and morale; and stronger customer loyalty. All of which saves you—and makes you—money.
How much is poor communication costing you? Share your stories, examples and comments below.
About Rich Maggiani
Rich Maggiani helps companies enhance market share and profits by helping them communicate simply and clearly with stakeholders, prospects, and clients. Learn more about Rich and his firm, Solari Communication by visiting the company website. Subscribe to the Solari mailing list to receive fresh position papers via email.
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Mr. Maggiani’s point is well taken; we’ve more choices to communicate
with colleagues than ever, yet communications skills per se seem to be
eroding. Old saws like conveying key points up front and then
reinforcing them (the old “tell ‘em what you’re gonna tell ‘em, then
tell ‘em, then tell ‘em what you told ‘em”), while once considered
seminal business practice, might be worth revisiting –but should be
considered and reexamined (how about streamlining to: “tell ‘em what
you’re gonna tell ‘em, period”). There’s as much an art as a science
to effective communication…for business communications I try to
apply the Twitter model (make every word count), highlight key words
in boldface for longer messages, and preface subject lines with
“I” (email is Info only), “A” (Action required), “Q” (Question), or
“NWR” (not work-related…possibly Not Worth Reading). But it’s easy
to fall into the trap of treating all communications like email
messages…and that’s where a thoughtful audience analysis comes in
handy. Communications with customers should receive significantly
different treatment than a message fired off to a colleague with whom
one has the opportunity to follow up and clarify…
Great points, Lisa. I agree and think that applying the Twitter model forces you to say what’s important or risk folks ignoring your message.
Far too often, I see an overemphasis on the importance of those things communicators were taught in school (rhetoric, grammar, punctuation, etc.) They spend effort making content fit their rules, instead of figuring out how to effectively communicate only what’s needed, and nothing more.
Hopefully, technological innovations like Twitter can help us understand that it’s the message that counts, not the rules we were taught.
Of course, there are situations in which rules (including those that govern grammar and style) matter, but far too often, the importance is only noted by the folks creating the content, not the recipients of the message, who—more-often-than-not—just want to know what you want them to do (respond, file for later use, etc.) and don’t care about the “rules”.
Email misuse is one of the biggest challenges we have in the business world. But, it’s really only an indicator of the mediocre way in which we (mis)manage most content creation and delivery functions we perform. I look forward to the day when “tell ‘em what you’re gonna tell ‘em” in the first few words is the “rule” instead of the exception.