The High Cost of Communication Misalignment in B2B Companies
When looking at the high cost of communication misalignment across enterprise B2B companies with approximately 100,000 employees we were astonished to find that $62.4M is lost to the bottom line. 1 This equals $624.00 per employee. A mid-size company with approximately 100 employees will lose about $500K to the bottom line. This equal $5000.00 per employee. And for a small company with approximately 0-50 employees it will lose about $26,041.00 to the bottom line. All of these numbers are incredibly astonishing!
Communication has been around since the prehistoric caveman chiseled animals on their cave walls to communicate their hunting expeditions. Here we are 44,000 years later from the earliest known communications to where each person in any sized company has advanced communication tools at their fingertips. Smart phones, regular phones, SMS, email, text, video, Zoom meetings, and the list goes on.
With all the advancements made in communication technologies over the past 20 to 30 years, how can it be that global, enterprise companies are losing, on average, $62.4M annually due solely to misalignment in their communications?
In today’s fast-paced businesses, there’s a real need for creating and implementing a repeatable process around communications. Especially when we look at all the ways we can communicate. A few technology-based communication tools are listed above, but we still often communicate by speaking with people in an informal, ad hoc way. For example, take the CEO of a large company who catches the VP of Sales in his or her office and in that very instance decisions are made around new pricing for two major products. This decision not only affects sales, but it also affects finance, manufacturing, customer service, training, etc. What happens with this type of ad hoc communications and decision-making (that we are all guilty of doing) is that the CEO assumed the VP of Sales would handle the communications to the correct functional heads and the VP thought it was something the CEO would or should communicate. So, what we have here is a complete failure to communicate!
So, the causes for gaps in communications are: Ad hoc, informal communications, communications affect many, if not all, functional areas in a company, all people in a company can communicate with one another and they have many, different tools to get their ideas, messages, and thoughts out to the organization. Zoom is the leader in supporting ad hoc, informal meetings. How many times a week do we have ad hoc, informal Zoom meetings? In today’s COVID-19 pandemic, this medium is taking over. But very few companies are able to measure the effectiveness and the results from these meetings.
Now, consider the performance of an organization’s functional groups. Manufacturing has processes in place to ensure they don’t produce defective parts. Finance has fine-tuned, error-free processes to deliver financial news to Wall Street. This same level of scrutiny and processes should be in place for communications and messaging. Yet, few companies have taken the time to create a repeatable communications process that would allow companies to see where their communications misalignments are occurring and to what degree. Bottom Line: Companies today don’t know the real costs associated with gaps in their communications and messaging. And these “hidden” costs will only continue to grow.
Alignment in communications is critical. What does this mean? Alignment in communication is a novel direction in communication research, which focuses on interactive adaptation processes assumed to be more or less automatic in humans. It offers an alternative to established theories of human communication and also has important implications for human-machine interaction.