Miscommunication can cost companies millions of dollars per year. A survey of 400 companies cited an average loss per company of $62.4 million a year due to communication blunders. These errors can happen across many fields, but this article will focus on examples of miscommunication in business.
In today's evolving global business climate, proper communication between companies, clients and consumers is paramount. Failure to communicate in even the smallest of ways can lead to huge delays in project deadlines, tense business relationships and lost profits. Being able to adequately understand, avoid and remedy miscommunications in a business setting could save a business from all these headaches.
Modern day business communication can take place through a variety of avenues, including over e-mails, through social media and in meetings over the phone or in person. Even with an extensive selection of communication platforms, miscommunication can still occur. This article will explore some of the more common causes of miscommunication in business and the disastrous effects they can have.
1. Lack of Context
In a business setting, context is the background, environment or framework surrounding an event or occurrence. Context gives tasks and responsibilities meaning and serves as clarification. When a report needs to be disseminated, context for that task would include which report, where it needs to be sent and by when, as well as who is tasked with sending it. Without context, a mistake can occur during the communication process, which can leave consumers confused or upset at the end result.
One example of a lack of context in communication came from Yellow Pages, the company that publishes telephone directories. In a 2015 marketing campaign, more than 250 billboards across Canada advertised the use of their app to find "the best cup of coffee" or "fast fashion" in the neighborhood. Unfortunately, one ad erroneously promoted the Korean dish Bibimbap using an image of noodles instead of rice. Photos of the ad were shared across social media, and Yellow Pages quietly issued an apology on social media in response. Soon after, the entire marketing campaign was terminated.
Lack of context can be dangerous and lead to damaging business relationships both internally and externally. In addition, failure to account for context diminishes brand trust, which is how people perceive a brand’s products or services. In this case, the ad designer’s lack of cultural context led to a damaging moment for Yellow Pages. To prevent this cause of miscommunication, all those involved on a project should be given ample time to ask questions and review their work. Consider involving a subject matter expert to ensure the project will come across effectively.
Assumptions in business communication occur when various factors are thought to be true but are never confirmed, which can take place at any stage of the product life cycle. Making assumptions is commonplace in business for strategy and decision-making, but those are typically standardized. In some instances, like when it comes to what consumers want to taste, it’s best not to assume.
In the early 1990s, the beverage industry was focused on developing clean and natural products. Pepsi tried to take advantage of this fad by releasing Crystal Pepsi, a clear and caffeine-free version of the traditional drink. Initially, the novelty of the drink reaped a profit, but the success was short-lived; consumers avoided Crystal Pepsi in part because it didn’t have the traditional Pepsi flavor. Less than two years after appearing on shelves across the nation, Crystal Pepsi was retired from production.
Crystal Pepsi’s manufacturers warned then-COO David Novak about the possibility of the drink's failure, and he admitted he ignored their advice. Pepsi's erroneous assumptions about consumer interest paired with a lack of research or factual evidence resulted in the loss of millions of dollars. To avoid a fate like Crystal Pepsi, business leaders should listen to their team’s input and perform market research to back up their assumptions before moving forward with a product or decision.
3. Vagueness or Ambiguity
Vagueness and ambiguity occur when a message is not fully delivered, the sender leaves out valuable information or the receiver fails to ask clarifying questions. Ambiguity and vagueness enhance the difficulty of a task, and they diminish the ability to make decisions and solve problems. Not being able to solve the problems of customers can have a costly impact on a business.
According to the Michigan Attorney General’s Office, as early as 2004, certain General Motors employees were aware of ignition switch defects that could result in airbags failing to deploy and vehicles stalling. However, the ignition switch problem was labeled "customer convenience" on internal documents, so the issue was not fully addressed. Committees tasked with reviewing it interpreted the vague "customer convenience" as a simple issue and not a dangerous defect. In 2014, GM announced a recall for 2.7 million cars, and three years later, GM agreed to pay $120 million to settle claims in relation to the flaw.
GM’s lack of clarity led numerous people to overlook a serious problem. Ultimately, this miscommunication cost the company millions and, more importantly, the trust of consumers. For businesses looking to avoid vagueness, they should be upfront in both internal and external communications, clearly identify problems and use specific, concrete language.
4. Excess Communication
One of the leading causes of miscommunication in business can be attributed to excess communication. When information is sent in multiple messages over a long period, or important information is buried in a long message, the key take-aways can be easily missed. This can result in miscommunication later in the process, which can have a disastrous effect on a product or service.
Multiple researchers on information overload have estimated that excess information could cost the U.S. economy anywhere from $900 billion to $1.3 trillion in annual value. A study of office workers in Ottawa, Canada found that they often experienced miscommunication with their bosses through e-mail. E-mails are usually the culprit of overcommunicating because they're easily composed and sent. The frequent miscommunication for the Canada employees necessitated follow-up e-mails and conversations that forced timelines on projects to slow.
The poor communication in the Canadian offices could have been avoided if the e-mails were edited to contain only relevant information formatted in an easy-to-read layout.
5. Wrong Medium for Audience
Because business communication takes place on a variety of avenues, it’s crucial to select the correct channel for both the audience and message.
In internal e-mails sent to employees, Neal L. Patterson, the CEO for Cerner Corporation, allegedly unleashed a diatribe, "berating employees for not caring" about the organization. It’s reported he threatened layoffs, hiring freezes and even shutting down the employee gym. The e-mails were reportedly only intended for the company’s 400 or so managers, but they made their way to all 3,100 employees. After the e-mails leaked to the public, the company’s $1.5 billion stock market valuation fell 22 percent in three days.
Patterson later said his e-mails were only intended to fire up his managers to work harder but that he wished he hadn’t sent them. Though his goal may have been to boost productivity, Patterson’s exaggerated requests created an “atmosphere of fear” in the company. In hindsight, it may have been better to hold a conference call with managers or meet with them in person to more clearly express his desires.
Miscommunication is Costly
From missing context to using the wrong medium, these causes of miscommunication in business can lead to disastrous outcomes, not only in regards to the bottom line but also internal morale. Studies have shown that companies can lose millions every year due to communication errors, and intangible impacts include a loss of focus, lack of innovation and drop in morale.
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