How Communication Failures Cost Your Company Millions


Effective communication is essential for business success. Therefore, communication failures will have costly consequences for your organization.


In this article, Work It Daily experts from Vistage will discuss actionable strategies for improving communication and why it matters to you, your organization, and the future of your company. Read on to hear these Vistage Chairs explain the impact of transparent/clear communication on morale, company culture, and business results.

Nora Taylor

When CEOs fail to communicate effectively, it can lead to a range of negative consequences for the organization including lost opportunities, decreased productivity, increased employee turnover, damage to the company’s reputation, and unplanned legal fees. Ultimately, communication failures can cost companies millions of dollars.

Today more than ever before CEOs need to build a culture that places importance on relationships with both internal and external stakeholders. CEOs set the tone of the organization with the culture. If the CEO wants effective communication in the organization, it is essential to prioritize the behaviors that promote open effective communications beginning with respect.

Communication planning should be thought of as critical, not obsolete, in this age of instant communications where every misstep has the possibility of going viral. Although plans may take a different form than those of the past, they are important.

In many ways, business communications have become very informal and that in and of itself is not bad. However, when you remove the formality, it does remove the guardrails. When delivering information around sensitive subjects, it is better to err on the side of sensitivity, not levity.

Nora Taylor helps CEOs and executives achieve success. As a Vistage Chair, she leads confidential peer advisory groups where the members work together to develop informed decision-making, improved judgment, and confident leadership.

Kirsten Yurich

Leader/CEO talks to her team during a work meetingImage from Bigstock

Eighty-five percent of business issues are relationship issues.

  • Most leaders did not take courses or get degrees in “how to manage relationships.”
  • Relationships are what many leaders spend the least amount of time “doing.”
  • As they get higher in the organization, the “what” they produce (from a tangible, leave-it-on-the-desk standpoint) changes.
    • The higher they go, the more leaders are responsible for PRODUCING relationships.
  • Relationships are the product of a leader’s work.
  • Relationships are the platform along which all other work is done.

How do you develop better relationships? Have more meaningful conversations!

Set intentions around your WHAT and HOW.

What should leaders be talking about?

1. Have more “why” conversations and less “how” conversations – increase motivation, get to the “real” issue, etc.

2. Motivation and fit between employees; SOONER rather than later in their tenure. Identify if there is a mismatch between the employee and the company (or the employee and the assignment).

    • Do the incentives line up / match with the people we have hired?

3. Are you setting clear expectations and do they line up with the feedback and consequences you have arranged?

    • For example, the leader tells the EE that her performance as a manager is important (the performance of her direct reports) but company incentives line up with alternate job outputs.

4. Don’t leave the drama up to your employee. CEOs are CROs, creating the narrative so employees can see themselves as PART of it, instead of leaving it up to the employee to create the narrative and the leadership team be in reaction mode.

How should leaders be talking?

1. As humans, employees want to know that their leader is a real person who cares about them.

    • Ask yourself, “How do I want this person to feel when I’m finished interacting with them?”

2. Taking the perspective of the “other.” We often call this “empathy.”

    • Lead with saying what you heard from their perspective.
    • Follow up with what you would want to hear if you were in the same situation or experiencing the same feelings.

Be deliberate and intentional with your relationships; they are your most important accomplishment as a leader.

Kirsten Yurich is a former CEO and current Vistage Chair. As a clinician, professor, author, and executive, she leverages this unique blend and creates learning environments for executives to become better leaders, spouses, and parents.

Mark Fackler

Business leader/ CEO says something during a work meeting

Image from Bigstock

Communication failures fall into two categories. The first is the wrong message or, even worse, no message at all. The second is not communicating enough. Failing in either category can cost millions if not the death of an organization. Yet with focus and courage, they are easy to fix.

In a sense, CEOs have a simple communication playbook once you have your organization’s foundation in place. That foundation consists of mission, vision, and values. Couple that with long and short-term goals and you have a foundation. Focused and courageous communication hardens the foundation, preventing costly or even catastrophic failures.

The CEO’s words must always point back to the company’s organizational foundation. Messages to employees, clients, vendors, and the public in general all need to reinforce what you stand for. No matter what the situation, from crisis to mundane, craft the message derived from the foundation.

Once the message is set, repeat, repeat, repeat. This is where courage comes into play. Employees, clients, vendors, and the public at large will never leave you because you stick to foundational-based messaging.

CEOs must believe in their foundation, focus their communication on that foundation, and have the courage to repeat it forever.

Mark Fackler is a retired CEO and currently leads the Vistage CEO group that he was a member of from 1991 to 2002. He is passionate about creating great ROI for his member CEOs.

Mike Thorne

CEO/leader communicates with her team members during a work meeting

Image from Bigstock

Twenty-three percent of executives say they are good at aligning employees’ goals with corporate purpose. Only 17% of employers think line managers are good communicators. Sixty-two percent of emails are unimportant to employees. Yet effective communication (changes/overall) lead to a 3.5X increase in performance. How can this not be a core strategy?

See the opportunity to communicate change as a connection vs. a confrontation and you will see the trust build and, ultimately, the performance of the company improve. Adjust your communication effort to the habits and mobile-first preferences (hybrid/remote/office mix) to what works for how your organization receives information.

Mike Thorne is a former CEO and current Vistage Chair. He leads and facilitates a group of trusted advisor entrepreneurs and a CEO peer group in New Hampshire and Maine.

What’s your experience with communication failures in companies? Join the conversation inside Work It Daily’s Executive Program.

From Your Site Articles

Related Articles Around the Web

Leave a Reply

Your email address will not be published. Required fields are marked *