Summary: The Covert Cost of Poor Communication: A Business Wake-Up Call

Interesting article from https://www.burrus.com/

It is somehow related to our series on communication in innovation. Let’s examine it content and try to discuss them with example.

Here is my evaluation of the key points in the topic:

• Poor communication can covertly cost businesses through lower employee morale and productivity, as seen when Yahoo reversed their remote work policy which backfired. This is a valid point supported by examples. Poor communication dissatisfies employees and hurts workplace culture.
  • Lack of communication around major organizational changes or restructuring can lead to uncertainty and anxiety among employees. This happened at IBM in the 1990s during major reorganizations.
  • Failure to communicate expectations clearly or provide status updates on projects can cause confusion over roles and responsibilities, wasted effort, and delays. NASA’s Mars Climate Orbiter was lost due to improper communication between teams using different units of measurement.
  • Not sharing full information about financial performance, new direction, or challenges facing the company can damage trust and engagement. Employees may feel decision-makers are hiding things.
  • Poor or ineffective communication from managers, with unclear instructions, last-minute changes or micromanagement can increase stress levels. This can sap motivation and reduce productivity long-term.
  • Lack of internal communication platforms and avenues for sharing ideas/feedback diminish the sense of participation and belonging. Employees may feel disconnected from company goals.
  • Failure to acknowledge work contributions or celebrate milestones publicly demoralizes high performers and teams. It signals their efforts are not noticed.
  • Inaccessible or unresponsive leadership where employees cannot raise concerns or have questions addressed in a timely manner breeds dissatisfaction.
• Effective communication being two-way interaction that leads to engagement and better decisions is valid. Seeking different perspectives and allowing discussion fosters a better shared understanding to make informed choices. Here is an example that illustrates how seeking different perspectives through two-way communication can lead to better decisions:
  • A mid-sized manufacturing company was considering investing in new machinery to automate part of their production process. The general manager initially favored one vendor’s proposal over others due to lower upfront costs.
  • However, before making a final decision, they decided to hold a meeting with representatives from various departments – including production staff, maintenance technicians, purchasing managers and the company union.
  • During the meeting, some staff raised concerns that the chosen vendor’s equipment required proprietary parts and software support that could impact operations if the vendor went out of business. The maintenance team pointed out it would be difficult to service without local technicians trained on that machinery.
  • The union rep noted that automating certain tasks could impact workers and suggested retraining options. Some practical alternatives were also proposed to gather more data before a major purchase.
  • Taking this diverse feedback into account, management decided to further evaluate costs over the long-term rather than just initial prices. They also incorporated workforce considerations.
  • Ultimately, a different vendor was selected whose equipment uses more common parts, has optional on-site servicing and would allow workers to be cross-trained on other roles—avoiding potential layoffs. This ensured a successful automation project.
  • Seeking various perspectives through engagement and discussion led to a better informed choice compared to one-sided decision making in this example.
• The distinction between collaboration requiring a shared identity/goals versus cooperation based on scarcity is a valid theoretical concept. However, the lines can be blurry in practice as cooperation sometimes leads to collaboration. An example may be competitors cooperating on industry standards.
  • Example 1: Technology Industry
    • Concept: Competitors cooperating on industry standards.
    • Explanation: In the technology industry, companies like Apple, Google, and Microsoft may compete in various areas of their businesses. However, they recognize the need for collaboration to establish industry standards that benefit everyone.
    • Example: These companies may come together to create standards for charging cables, such as the USB-C standard, enabling compatibility across devices and enhancing user convenience.
  • Example 2: Healthcare Sector
    • Concept: Competitors cooperating on industry standards.
    • Explanation: In the healthcare sector, pharmaceutical companies often compete to develop and market new medications. However, they need to collaborate and adhere to shared industry standards to ensure the safety and efficacy of their products.
    • Example: Pharmaceutical companies may work together to establish guidelines for clinical trials, ensuring consistent protocols and ethical practices across the industry.
  • Example 3: Automotive Industry
    • Concept: Competitors cooperating on industry standards.
    • Explanation: In the automotive industry, car manufacturers compete fiercely to capture market share. Despite this competition, they understand the importance of cooperation to establish common standards for vehicle safety, emissions, and performance.
    • Example: Manufacturers may collaborate to develop standardized crash tests and safety regulations, ensuring that all vehicles meet specific safety criteria and protect consumers.
  • Example 4: Entertainment Industry
    • Concept: Competitors cooperating on industry standards.
    • Explanation: In the entertainment industry, streaming platforms like Netflix, Disney+, and Hulu compete for subscribers and viewership. However, they often cooperate to establish common technical standards and content protection measures.
    • Example: These platforms may collaborate on developing digital rights management (DRM) systems to protect copyrighted content, ensuring that it remains secure and accessible only to authorized users.
• External collaboration through strategic alliances creating new products/services, as seen in some industry partnerships, is valid when goals are aligned. Examples include joint ventures between competitors. However, collaboration may not always be possible due to conflicting interests.
  • In the pharmaceutical industry, Company M and Company N, both known for their expertise in different therapeutic areas, decide to collaborate on a research project. They aim to develop a new drug to treat a specific disease. By pooling their scientific knowledge, research capabilities, and funding, they increase their chances of success in finding a breakthrough treatment. This collaboration allows them to share the risks and costs associated with drug development and potentially bring a life-saving medication to the market.
• Leaders communicating actively through listening, discussion and dissenting opinions fostering collaboration is a valid management strategy when implemented sincerely and effectively. However, leadership style also depends on situational factors.
  • In a professional setting, a project manager adopts an active communication approach to lead a diverse team. The project manager encourages team members to actively participate in brainstorming sessions, group meetings, and one-on-one discussions. They value dissenting opinions as opportunities for growth and innovation. By fostering open communication and actively listening to team members, the project manager creates an environment where collaboration flourishes. This management strategy enhances team cohesion, productivity, and project success.