The Importance of Effective Communication in Business Operations Management

In the world of business, miscommunication can come at a high cost. dale carnegie, the famous author of “How to Make Friends and Influence People,” estimated that “90 percent of all management problems are caused by miscommunication.” Statistics put out by the Society for HR Management indicate the scale of this problem in terms of the financial consequences. Shrm reports that companies with 100,000 employees calculate an average loss of $62.4 million each year because of communication errors within the company. Meanwhile, companies with 100 employees averaged a loss of $420,000 each year due to miscommunication alone.

In small businesses, there are fewer employees, and this may reduce the chance of costly miscommunication on that front. There are, however, other communications to consider such as those with outside vendors, subcontractors, and clients. For entrepreneurs in those critical early years, the financial burden incurred by miscommunication can be much more difficult to absorb.

Effective communication has always been central to successful business management. With the rise of remote-first working models, the need for skillful communication is only becoming more crucial. So what are the features of effective communication, and how can they be practically implemented in the small business environment?

Master communicators identify three categories of strong business communication. Good communication is 1) Clear, 2) Consistent, and 3) Conscious. Let’s explore how each of these communication traits can benefit your business.

Clarity

Effective communication requires establishing shared understandings. For smoother business operations, work on clarifying key expectations, needs, and goals.

Clarify your expectations at the beginning to avoid trouble later.

This is especially important when signing new contracts or taking on first-time clients. It is crucial to establish a shared understanding of the scope of service and the exact work you are agreeing to do to avoid that dreaded “ scope creep ”. Likewise, you will save yourself future pain by establishing a shared understanding of quality standards, personal availability, and payment methods. Consider creating a standard template or contract to fill out and share so that everyone has the same information agreed upon in writing. This allows you to refer back to the shared document if disagreement ever arises.

Clarify the need so you can provide the right service to meet it.

Business transactions are all about fulfilling needs through goods and services. But the need isn’t always clear. Sometimes there is a need beneath the need that isn’t fully stated up front. Asking good questions to get clarity on what exactly the client is looking for will help you deliver a satisfying service or product. Without taking the time to gain this level of clarity, you may end up wasting time and effort trying to meet the wrong need. Similarly, there may be items or information you need from a client to accomplish the work. Be sure to communicate these needs up front to keep things running smoothly.

Clarify the end goal so that you know when you’ve achieved it.

Within a particular project, the goal may be relatively easy to define, but it’s still worth setting it out in writing to make sure you stay on target and don’t exceed scope. When it comes to the broader vision you have for your business, the goal may be trickier to define. In business as in our personal lives, the goal may be a moving target of continuous growth. In this case, it is useful to set out measurable short-term objectives to help you keep yourself and your team on track as you work toward achieving those larger goals. While there are many goal-tracking methods, the smart model is an especially popular framework for setting up measurable goals.

Consistency

Effective communication involves establishing and maintaining a set of norms so that those who work with you know what to expect. For greater operational success, focus on streamlining your terminology, processes, and brand reputation.

Develop consistent language to avoid confusion.

Confusion abounds when we use the same word with different meanings. While industry-specific jargon can be useful in cutting down the time it takes to communicate certain ideas, overuse of jargon can ultimately lead to miscommunication. This is especially true when you are operating a cross-functional team with specializations in different types of services. Within your own team, including the clients, subcontractors, and vendors you choose to bring on board, make sure to develop a shared language that everyone understands. Keep this simple and streamlined enough that you can clearly communicate with those outside your personal role or industry bubble.

Develop consistent processes to help your team stay in synch.

Setting up effective systems, timelines, and instructions for specific scenarios goes a long way to preventing costly communication lapses. It also saves time in daily operations as it allows you to communicate about routine processes coherently and efficiently without reinventing the wheel each time. To support consistent processes, you may decide to invest in a productivity app or create streamlined instruction packets. It’s important to note that your processes will naturally evolve over time as you discover what works best for your company, so it’s important to do a regular review to make sure your instructions are up to date. If you make a change, it’s okay. Just make sure to acknowledge the change so everyone is working with updated information.

Develop consistency as a whole to acquire a reputation for trustworthiness.

Consistency in business communication is about enhancing efficiency and avoiding unnecessary losses. But it’s also about building trust. Consistency helps you build rapport with your team as they see what was true of you yesterday is also true today. Consistency also builds a sense of reliability with your partners and clients as they regularly see you delivering on time and as promised. Over time, a track record for consistency builds into a hard-won reputation for trustworthiness.

Consciousness

Effective communication starts with intentional awareness. For better business relationships, pay attention to the type of communication, the audience, and the impact.

Be conscious of the types of communication at play in the situation.

Verbal and written communication are only two of the many communication methods we employ every day in the business setting. Much communication is actually non-verbal. Some cultures and individuals may rely more on tone and body language than others, so it’s important to consider what messages you may be sending across without intending to.

Because our brains process visual data faster than words, images have come to dominate more and more in marketing communication.

Yet, visuals will inevitably have different connotations for different people depending on their individual or cultural backgrounds. For this reason, Indeed suggests that visuals be used with care and only when they are sure to support rather than undermine the message. Ultimately, being aware of the types of communication at play will help you exercise greater control over the message that gets across.

Be conscious of your audience so you can tailor your message effectively.

Active listening is the starting point to understanding your audience. Before saying what you have to say, learn who you’re speaking to. In addition to the individual and cultural factors mentioned above, it’s worth considering differences in business roles. Is your communication geared toward employees, clients, or business partners? How might power differentials impact how your message is received? Awareness of your audience will help you determine the most effective way to communicate in each situation.

Be conscious of the impact of your message so you can adjust it as needed.

When you do the work to understand your audience and select an effective communication method for the situation, you can start making fairly confident predictions about the outcome. But you still can’t assume. It’s always helpful to follow up to see how the message landed. Taking the time for reflective follow-up will serve you in two ways. Not only will this practice help you deepen your understanding of your audience, it will allow you to dispel any misunderstandings before they grow to a costly scale. Counterintuitively, the greatest communication failures are often the best opportunities to practice valuable communicative repair.


Clear, consistent, and conscious communication lies at the heart of strong business operations management. While the costs of miscommunication can be high, there are lots of resources to help you avoid those pitfalls. If you find communication challenging or time-consuming, you might consider investing in a virtual assistant to help keep you on track. Or perhaps this is the right time to enlist a copywriter to build out your brand. In any event, developing effective business communications is an ongoing process. What one, small step will you take to improve your communications today?

WRITTEN BY: DEBORAH STEVENSON