How bad communication skills affect the bottom line

By Heather Campbell

I want to start by busting a myth about communication skills. 

Something I hear regularly is this idea that communication skills are simply ‘soft’ skills, and therefore don’t have a tangible impact on an organisation’s bottom line. I couldn’t disagree with this more! In this insight, I aim to well and truly bust this myth, by sharing examples from my own experience together with some hard numbers which together reveal the cost of bad communication skills in your organisation.

Poor communication skills are damaging

There are three ways in which poor communication habits cause measurable waste across an organisation: 

1. Loss of time

When a leader does not possess a well-honed set of communication skills, this results in a serious serious drain on their time. How? 

  • Firstly, where a leader finds it hard to have difficult conversations, they’ll spend a lot of time just talking around the topic and avoiding it, rather than addressing it directly. 
  • Secondly, leaders can also get caught up in avoidable conflict, particularly where the conversation(s) they need to have don’t go the way they expect, and they are unprepared to deal with the fallout. 
  • Thirdly, if a leader lacks the ability to have effective conversations, their time is also wasted by focusing on the wrong problem(s), rather than the root cause of the issue they are trying to address.

2. Lack of action

Another tangible way in which poor communication skills impact the effectiveness of your organisation is through lack of action. For example:

  • How many meetings have you sat through that don’t result in real action? 
  • How often do you think you’ve agreed next steps , but nothing actually happens?

When leaders have poor communication skills, their conversations may create noise, but result in little else. Effective conversations galvanize individuals and teams towards action, whereas poor conversations leave people demotivated, and lacking direction about the task or project they are expected to undertake. 

3. Reduced productivity

Do you remember how you felt the last time you had a really great conversation with a member of your team? I bet you felt motivated, more productive and had a spring in your step too! 

But what about the flip side? When was the last time you had a conversation that left you feeling bad? How much time did you waste mulling over the conversation, sharing the details with colleagues and perhaps even thinking about looking for a new role? The way poor conversations make us feel has a direct impact on how productive we are in the aftermath. The result of multiple poor conversations is that productivity becomes seriously affected.

Better conversations are good for business 

When you consider all this together, the cost of poor conversations becomes significant. By having more focussed conversations, leaders will save hours each week. The time they get back can be spent more productively, so the benefits are multiplied. The time of the people around them is saved too.

That’s why I am such a strong advocate for getting people into good communication habits as early as possible. Conversations which have focus, that lead to action and which have a positive impact on productivity save time and money right across an organisation. They underpin high performance and productivity and are the primary building blocks of employee engagement. 

Communication isn’t merely a soft skill for leaders to develop. It’s a highly business-focussed skill which should be treated with as much respect and attention as financial management, budgeting and strategic planning etc.

So how much are bad communication habits costing your organisation?

Here’s a simple calculation which sets out the true cost in black and white. On average, bad communication habits cost each of your leaders a minimum of 1 hour a day.

  • Wasted meeting time
  • Inconclusive conversations 
  • Dialogue where nobody really knows what the purpose or outcome is

One hour a day of time lost is five hours every week. 

Now take the average salary of a senior leader in your organisation. We used figures from Glassdoor, which show that the average senior leader in London earns around £80,000 per annum – that’s about £40 per hour.

Working with the conservative estimate of saving five hours per week – that’s £200 per week (not allowing for all the add-on costs of employing someone). That equates to around £850 per month, and over £10,000 per leader, per annum – wasted. 

That’s 12.5% of someone’s salary.

And all this waste is avoidable. 

If you’d like to know how to put a stop to poor communication habits in your organisation, then why not sign up for my webinar on Wednesday 24th July, 08:30 – 09:30 BST.

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