by Helen Wilkie, MHW Communications
How much has poor communication cost your company in the past 12 months? Chances are, you have no idea. Chances are even better it’s a lot more than you can afford.
But you won’t find the numbers in the financial statements or year-end departmental reports. Nothing shows up saying, “lost productivity due to miserable meetings” or “missed business opportunities through sorry selling skills” or “employee quit because there’s no communication around here.”
Why? Because most people aren’t sure what communication really is.
Consider this: When companies conduct internal needs assessments, communication virtually always surfaces near the top of the list. But, if you ask 10 people who put it on the list exactly what they meant, you’ll get 10 different answers. People often can’t pinpoint the problem – they just have a vague feeling communication isn’t happening. Unfortunately, this vagueness relegates communication to the bottom of the action list.
Truth is, communication isn’t some warm and fuzzy “nice to have.” It is nothing less than the lifeblood of your organization. What I call applied communication is written, spoken and non-verbal interaction among people in order to get things done. It takes co-operation to create a product. It takes collaboration to approach a new market. It takes teamwork to implement a strategy. It takes this applied communication to oil and run the machinery of business. And, if that machinery breaks down – as it often does – a great deal of money is lost. It’s in this area, applied communication, that we need to look for the financial drain.
Loss of time
What does your time cost the company for each hour you are at work? A good rule of thumb in calculating hourly cost is: annual salary divided by 2,000 (based on 50 40-hour weeks). When you know this figure for your own time as well as that of your staff, you can begin to calculate the cost of applied communication at work.
Regardless of its purpose, a meeting is an exercise in applied communication: you speak, you listen and you interact. I’ve never met anyone in business who has not complained about meetings: too many, too long, too boring. I would add to that: too expensive.
Consider meetings that are supposed to last an hour, but somehow expand to use up most of the afternoon. Calculate the hourly cost of total participant time and multiply by the length of the meeting – and keep in mind that the higher level the participants the more expensive the time. The result may not sound too alarming, until you consider how many of those meetings take place in your organization every day, every week, every year. Do the arithmetic.
Loss of business
Sometimes salespeople know their “pitch” so well that they totally ignore any input a prospective customer might give them. They barely shake hands and sit down before they start talking. They blithely prescribe their product or service as the cure for a problem, without even finding out if such a problem even exists.
But an effective sales process is, in fact, a conversation, a two-way exercise in applied communication. Done poorly, it can result in lost sales and missed opportunity for ongoing business relationships.
Customer loss doesn’t happen only in the sales process, but also can be spurred by an inept “customer service” exchange. When someone calls to complain, the client relationship is at a fragile point. It can be repaired through the right message well delivered, or broken beyond repair by poor communication. When we consider the total lifetime value of a customer relationship, we truly can appreciate the real dollar cost of poor communication.
Loss of people
Whatever people tell their bosses about their reasons for leaving the company, exit interviews often tell a different story. One of the most common reasons cited is that they don’t feel anyone listened to them.
How much then does it cost to replace them? Studies give a wide range, from a low of 25 percent of salary, plus benefits, to a whopping 150 percent. Employee replacement represents yet another huge cost that can at least sometimes be charged to poor communication.
By improving the way people (and I mean people at all levels) interact in order to get things done, we can increase productivity with its attendant positive impact on the bottom line.
Helen Wilkie is a professional keynote speaker, workshop facilitator and author specializing in communication at work. For more articles and other information, visit www.mhwcom.com.