How Poor Communication Affects Your Business’ Bottom Line

Effective communication is a critical component of leadership across the board for all businesses, and its impact on business can mean big bucks. Poor communication has been estimated to cost large businesses (400 to 100,000 employees) tens of millions of dollars every year. The annual cost to smaller companies is in the hundreds of thousands.

Costs of Poor Communication

Some of the costs associated with poor communication are tangible:

  • missing deadlines
  • Failure to deliver a product or service
  • Lost productivity
  • High employee turnover
  • Loss of sales
  • Collapse of negotiations or a business deal
  • Poor customer service

Other costs may not be as obvious, but are just as destructive to the bottom line.

  • Tension in the workplace
  • A lack of trust and/or respect between employees, and between employees and management
  • Misunderstandings
  • Missed opportunities
  • Lack of discipline
  • Loss of employee motivation
  • A negative effect on innovation

Learning Effective Communication

Although effective communication may not be an innate skill for everyone, it is something that can be learned – on both the individual and the corporate levels. Leaders need to make communication a priority from the top down, providing regular opportunities for information to be shared in both directions between all levels of the organization. It’s not enough to assume employees know what’s going on, or will be able to “figure it out” on their own; nor is it realistic to assume that employees will feel comfortable sharing information with colleagues and management.

Third Level Power Listening

One of the keys to effective communication, often overlooked, is the ability to actively listen (what we call Third Level Power Listening). Third Level Power  Listening is a set of skills individuals can develop for use in the personal as well as the professional world. It involves listening with all of the senses, and connecting with the emotions and values that underlie what the other person is saying. A Third Level Power Listener “receives” information neutrally, focusing on the speaker’s experience and point of view without the context of pre-conceived notions or judgement.

The monetary cost of poor communication should be a reality-check for every leader, member of management, and business owner. Fortunately, the challenge of poor communication can be tackled effectively and the loss of revenue can be addressed. As with so many issues in the workplace, meeting the problem head-on with a commitment to long-term change will bring about cultural change, and, ultimately, success.

Click here for more information about Power Listening and how it can benefit your team and your business.

Harnessing the Influence of Power Listening for Business and Relational Success



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