Effective Business Communication

Effective business communication is one of the poorest understood, and least practiced, management tools available to all entrepreneurs.

Yet, it can mean the difference between success and failure when facing a crisis in your business.

Unfortunately, effective business communication has been discussed, dissected, experimented with, expounded upon, seminar’d to death and written about until the word “communication” often brings a shudder to many business people.

Still, the importance of good, effective business communication—or the lack of it—can determine the eventual success or failure of your business, especially when facing a crisis.

This is where your leadership qualities become of utmost importance. You must set the ground-rules for communication so that employees, customers, suppliers and bankers quickly develop a sense of trust.

You can only do this through communication. Nothing you do is more important than developing a good line of communication with everyone. If you don’t already have this, start today!

Instead of a dictionary type of definition, let's look at an expanded definition of effective business communication. To do this we need to break the definition into two distinct types—formal business communication, and informal business communication.

Definition of Business Communication

Formal Business Communication

This involves such things as staff meetings, planning meetings, turnaround team meetings, strategic review meetings, board meetings, written reports of any description, newsletters and so on.

During a crisis these forms of communication take on a definite sense of urgency—just so long as you and your employees do not spend too much time in meetings. Meetings with your turnaround team during the early phases of a crisis are usually group discussions on how best to get through the next 90 days—sometimes the next 24 hours.

If your business has an hourly workforce, whether it is union or non-union, another formal means of communication can be through a labor/management group.

This group is usually composed of three or four selected representatives from the labor force, plus yourself and perhaps your Human Resources manager. The group will initially meet to discuss the crisis and what it could mean to the workforce.

This also requires follow-up meetings to report on progress in resolving the crisis. The meetings need to be a two-way street so both you and your employees can lay out concerns. This is an excellent way to head off potential labor problems.

Informal Business Communication

This happens around the water cooler or the coffeepot; in the lunchroom; walking around your facility; in your office, or someone else’s office or workplace.

This form of communication is by far the most important thing you can do to build consensus among your employees, not to mention information gathering.

What might be considered "chit-chat" at any other time can be extremely effective business communication during a crisis. You will learn things you could not possibly find out any other way, and your employees will be kept up to date almost hour by hour on what is really going on.

A note of caution: you must be a good communicator and not send mixed signals to the employees. What you say to one employee must be consistent with what you say to everyone else, because they will all talk about your conversations—more than you think.

In addition, an open-door policy is paramount in a crisis management situation. You are the primary leader and therefore need to be accessible.

Make your office as inviting as possible. Don't place your desk or a table between you and your employees; make your communications in your office as informal as possible. Arrange it so people want to come in and talk to you. Open yourself up—communicate!

There you have my definition of effective business communication.

There are many books, and hundreds of business communication articles, written on this subject, so I will only briefly discuss the business communication methods I actually use.

Business Communication Methods

Frequently forget business communication technology for the business-in-crisis. Rapid electronic communication may have a place in project management, but sometimes, you should grab a stool, go out onto the work floor, shut down production for a short while and have everyone gather around. Just have a general gab session about the business.

Nothing is taboo, no question is too tough and there is no such thing as a dumb question. As they start asking you questions, you need to discern their "real" problems from the questions they ask.

In the second part of the meeting, you need to ask the questions, and again, discern from their answers what the real problems are.

All too often, the business owner assumes they know what the employees are thinking and don’t bother to really listen. Unfortunately, they also may be too egotistical, too unsure of themselves, or fearful: “What if they say I’m doing a bad job of running my company, or that I’m doing something wrong?”

That’s the whole point. You want them to say whatever they’re feeling and thinking, without fear of judgment or recrimination.

Make effective business communication as exciting as possible. Throw a barbecue lunch on the company lawn; surprise your employees with a catered lunch in the workplace when you achieve some new land-mark event; pass out gift certificates for lunch or a pizza when you have volunteers work on a special project.

When things really begin to pick up, declare a special holiday and give every employee a day off—with pay!

These are special forms of communication and they sometimes say more than the most eloquent orator. Try it—you’ll like it.

Newsletters, announcements, banners, posters, slogans, charts, and on and on are all special business communication methods and over time you and your stalwart band of turnaround people should work with all of them. So start now, today is not too soon.

In any business, you should not deliver negative “surprises” to your employees, customers, or investors. In the business-in-crisis, there can’t be any surprises. Regular constant communication, even if bad news, prevents any surprises.

If you have no meetings…no "open-door" policy…nor any regular means for the employees to interact with you, your business may still survive—but this produces little evidence of leadership, and the prognosis for the business-in-crisis is very dismal.

Business to Business Communication

There is little question about how much information to share internally—you share everything! Communicating with outsiders (the media, bankers, customers, suppliers and the like) may be more problematic.

With a few of them you may want to share everything, while with others you may want to be more selective.

The Media
The media may, or may not, be important in your business. If you have a business that is newsworthy (most of the time, according to Sherman’s Law, it must be “bad” news, like a toxic waste spill, an employee strike, a major lawsuit, or the like) the media will be contacting you.

In these cases, you as the owner or person in charge should always be the spokesperson for any media contact.

On the other hand, you can also use the media to your advantage, through news releases on special “happenings” at your business. Some new product introduction or technological breakthrough; a large shipment of product to an international customer, new facilities or relocation.

These are the types of events that should be newsworthy—at least to local media. You should give these things to the media through a typical press release.

This kind of effective business communication can keep your name in front of customers, or potential customers, and will instill a sense of pride in your employees at the same time. Attitudes about your business crisis will improve dramatically.

Providing information to banks and financial institutions must be an open-book approach. If you want to bring your banker along as a working partner in resolving your crisis, you need to be totally candid with them. Share everything.

Surprises are as damaging with them as they are with your employees, perhaps more so.

In dealing with suppliers, you should be selective in giving out operating or financial information. Many suppliers require a current P&L statement before they will extend credit. But, if you're in the throes of a crisis, they probably won't give credit to you anyway, at least not based on your current P&L information.

On the other hand, for selected suppliers, it is better to involve them in your entire turnaround plan with frequent progress reports rather than trying to explain away a poor P&L—and they might even extend special terms for you.

In dealing with some suppliers however, you need to exercise caution because it is not unusual for some supplier's salespeople to share some juicy gossip with your competitors on your crisis condition of your business.

In most cases it remains just gossip, but the situation could develop where a competitor might use that information to harm your business.

Quite often customers learn of your crisis through rumors, and then panic because they are not sure you will be able to continue supporting them. If the customer gets concerned enough, and you have not kept them informed regularly about what is happening, they are very likely to simply switch to your competitor.

You should, therefore, pick out key customers and sit down with them, either in person or by phone (preferably both), and have an open and frank discussion with them.

Tell them something of the crisis, and emphasize the steps you are taking to assure them that they will be getting a quality product or service on time.

One caveat. Sharing information about the crisis, how you are turning the business around, and periodic progress reports should never be done in a negative manner. Like any good leader, you should be candid and honest (no smoke and mirrors) with your appraisal of the current situation.

Even more important, you should exude confidence and control. It is important to emphasize the positive—even if you seem to be repeating yourself—and convince everyone around you that the job can be done, is being done, and will have a successful conclusion.

Nothing will hurt your business more than a negative attitude—you will lose employees, customers, bankers and finally, your business.

On-going Business Communication

The importance of effective business communication never ceases. A leader must continue to lead, and this involves good communication. The old standbys of planning retreats or some other form of special planning sessions are still a good idea.

I like to use a good outsider to act as meeting leader, or coordinator. This allows me to participate as a contributor rather than being in charge of the meeting.

Whether you admit it or not, effective business communication—actually, the lack of it—probably played an important role in the development of your crisis, and communication will play an even more important role in getting your enterprise out of crisis.

Effective business communication is an art form and the more you practice it, the better you will get, and the more successful your business will be.

To help you improve your effective business communication skills, I have prepared a Checklist of questions you can review to determine if you are missing any important areas of communication. You can access this Checklist here.

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Every owner of a business-in-crisis faces the possibility of closing their business. This always hangs over the head of a business owner and simply makes matters more worrisome. To explain what it means to properly close down a business I have a prepared a report titled "Closing a Business.

This report should ease some of the tension created by the unknown. You can access the Closing a Business report here.

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Proceed to Closing a Business report

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