Adding Fuel to the Fire
The cost of poor communication is impacting enough organizations that it's become quite a hot topic. I found a separate article on Inc.com called "Costs of Poor Communication Reach $37 Billion. Avoid Disconnects by Implementing These Two Things" that referenced the same study I shared before, citing the average loss of $62.4 million per year to the 400 companies for 100k employees. Still, this Inc. article shared another piece I had yet to see from the study. That same study showed that "companies with leaders who possess effective communication skills produced a 47 percent higher return to shareholders over a five-year period."
It's one thing to see stats pointing to how much profitability is being killed by issues like this. However, seeing how organizations that do these things well are capturing that lost profit can give even those of us who have struggled the most a glimmer of hope! While I've seen what a large role communication plays in every working environment, I've been a part of, I've also seen how many other things are impacted by communication, for good and bad. And it doesn't only apply to the business world.
Since late 2019, I've written a monthly column for a local newspaper about effective communication. The most significant difference between that column and most of our work, though, has been its focus on how communication builds (or tears down) personal relationships just as much as business relationships-and the profitability businesses need to remain sustainable. Regardless of where we communicate, the connections become stronger or weaker based on the energy we invest. And that communication fuels quite a few other fires, for good or bad!
My goal for that newspaper column has been to provide a resource for the folks who read it that helps them enjoy better relationships with their friends and family members, the people they interact with most frequently. The same tools I share in the column apply at least as much in the business world, because the relationships we build with the teams we lead have direct ties to the ever-important profitability we've been looking at here.
When we've built strong relationships with our teams and communicated with them clearly and consistently, we become likely candidates for experiencing the magic of employee engagement and buy-in. When I cover these topics in a group setting, I use the analogy of a rowboat; the actively engaged employees are the ones who have their oars in the water and are rowing just as hard as they can to help the boat reach its destination. Unfortunately, the highest I've ever seen any employee engagement study show for these actively engaged folks has been just over 30 percent.
I don't believe active employee engagement needs to top out there. We'll work through the specifics of how we can each address it in our teams when we dig into that profitability killer in more detail. For now, though, I'll challenge you to consider whether you've ever wholly bought into an idea or been as actively engaged as you were capable of when the person leading the team had not invested the energy to communicate effectively with you. (Hint: I know the answer!)
Poor communication can add quite a bit of fuel to the fire that's burning up our employee engagement and buy-in. Still, it also creates confusion, and that confusion kills quite a bit of profit too...
Confusion Causes Trouble!
Good or bad communication doesn't just impact relationships-and the buy-in and employee engagement that tie directly to those relationships-it also fuels the fire regarding whether our team members are clear on what action they should be taking. When there's confusion, we can expect trouble to follow. Don't miss my point here; I'm not referring to the confusion that usually followed nearly anything the character Boomhauer said in the late '90s (kind of) adult cartoon series King of the Hill. The kind of confusion I'm talking about comes when we fall short of providing clear expectations for our team to act on!
Think back to the statement from the SIS International Research study I shared before, suggesting that "a business with 100 employees spends an average downtime of 17 hours a week clarifying communications." If their numbers were correct, more than half a million dollars of profit is killed annually for companies that size. For perspective, let's say one of those 100-employee companies does around $20 million per year in revenue with a 10 percent profit margin. Now, let's be conservative and pretend that even the best communication only eliminates half of the downtime chalked up to the need for clarification. What lengths have you seen business owners and executives go to for a 12.5 percent increase in overall profitability?
If we were having this discussion face-to-face, I'm pretty sure the crazy stories could go on for hours. Since we're not, though, I'll keep it simple. I've seen folks all but run through walls for much smaller increases in profit than that. Let's be honest with ourselves; clear and consistent communication isn't too much to ask. Will it take time and energy? Of course it will, but I can't imagine a scenario where that time comes close to seventeen hours each week-and the results our team can achieve with that will be remarkably better. As I've mentioned before, in dealing with our profitability killers, it's a matter of what result we want from the hard work we do.
When we're willing to set clear expectations for the results we need, as well as the behaviors required to achieve those results, and we're willing to share that clear message consistently, confusion within our teams should be at a minimum. I believe we could cut the downtime hours by far more than half, but I'll save that debate for when we get to have the conversation in person. The beauty of minimizing the time we lose by setting clear expectations and providing a clear and consistent message is that it spills over into one other key area simply because we shouldn't be nearly as frustrated or have to say, "I just can't take it anymore" ever again! With that in mind, let's work through this before we dive into some how-to's of dealing with this particular profitability killer.
I Can't Take It Anymore!
Consider the seventeen hours of downtime due to clarifying communications that the SIS International Research study cited as an average weekly loss for companies with 100 employees. After spending nearly two decades in a manufacturing environment, I see a lot through that lens. That downtime represents the time that couldn't be attributed to anything else. The facility I worked in had special work order numbers, commonly called "H numbers," used to capture time for miscellaneous issues that fell outside the standard production process. When we had a unique project, an H number was assigned; if a group of big shots visited from corporate, we generally had an H number to charge all the extra cleanup time. In fact, one young man became so proficient in using those H numbers for writing off his unproductive time that he earned the nickname H-John, with only one H being silent...
That seventeen hours of downtime certainly doesn't represent the entire time there was no direct labor. To me, this is the time outside of expected indirect labor where production could have and should have been but wasn't due to the need for additional clarification. This wasn't the only time communication would have happened; communication needs to be nearly constant-even during the production process. Those seventeen hours represent time lost because the initial communication wasn't clear.
I'll challenge you to remember that these seventeen hours were for average companies. Just think of how much worse it can be for those who are well below average! Now think about how frustrated the folks in supervisory and management roles tend to get in those situations when they've had to repeat instructions over and over and over again, watching that downtime mount up!
All too often, this is where a supervisor or manager blows their top. But that rarely happens right away. The scenario I've seen more than any other over the last twenty-five years has been where the boss tells one of their team members what to do, then has to repeat a few things throughout the process or even correct a thing or two, and finally gets something close to the result they needed. That supervisor is a bit aggravated but doesn't want to lose any more time by addressing the issue with their employee. This cycle typically repeats several more times, with no formal discussion addressing the real problem, before that supervisor storms into the HR manager's (or the owner's) office yelling, "I can't take it anymore! They don't do anything I tell them. We need to fire them!"
I've [Editor1]been that HR manager and have been in several owners' offices when this has happened, and the common theme has been that the issues leading up to this point have rarely been documented or addressed head-on in a direct conversation with the employee in question.
Let's not even consider how little engagement a situation like this could build. And let's not bother factoring in the downtime leading up to this point. I want you to consider how something like this leads to turnover, whether through termination or the employee getting fed up and leaving on their own. Now consider how it impacts everyone watching it go on. Do you think there's any chance the folks in the immediate area watching this are likely to be actively engaged? Doubtful! I'd go so far as to say they'll eventually start looking for a better environment too. When we've got all that mess going on, I'd bet there are very few employees inviting their friends to work with them, and our recruiting process also takes a hit!
Notice I didn't suggest that the supervisor had been communicating effectively with said employee. Telling someone what needs to be done and making them understand it are two VERY different things! Think back to the quote I shared from George Bernard Shaw when we started looking at the cost of poor communication: "The single biggest problem with communication is the illusion that it has taken place." I'm also not suggesting that this is always the supervisor's fault. In more cases than I can count, poor communication has boiled down to not having access to the right tools, so that's exactly what we'll dig into as we wrap up our look at this profitability killer.
[Editor1]To avoid a misplaced modifier
