Why Improving Internal Communication Matters
Outward appearances matter. That’s why businesses tend to prioritize crafting a polished image through external communications. Whether it’s customer interactions, dealing with external stakeholders, partner collaborations, and even vendors. However, what most don’t realize, is how internal communication is the second face to the same coin.
Internal communication encompasses everything from employee communications within a team to discussions and collaboration across the company.
A 2023 study by SaaS provider Grammarly and market research company, The Harris Poll, found internal miscommunication costs US businesses $12,506 per employee per year.
Poor communication has a ripple effect on your entire company. For example, when managers don’t communicate well with their teams, employees feel disengaged. This is more likely to increase absenteeism and reduce collaboration and productivity.
Internal communication vs external communication
Managers, employees, and business owners alike need to understand the differences between internal and external communications.
Internal communication encompasses any form of communication between any two employees, regardless of their seniority, engagement in operations, or employment status. This includes board members, freelancers, contractors, and consultants.
It can take various forms, such as email, a direct message on a communication tool like Slack, an announcement, or a one-to-one discussion. If it’s communication within an organization or involves sharing information not for the public, it qualifies as internal communication.
External communication, on the other hand, covers conversations carried out with people outside your organization. These can be stakeholders, clients or customers, partners, potential investors, governmental bodies, media, among others.
Various teams within an organization can communicate with external stakeholders. However, this role tends to be limited to marketing, public relations, sales, customer service, and business development teams. That said, all internal teams need to be well-equipped with the needed information about dealing with customers.
The common misconception that external communication is the sole revenue driver, is the reason behind the common neglect of the crucial role of internal communication and how it directly impacts your bottom line and overall brand perception.
One simple example is a mismatch between what a sales executive communicated to a company employee and what his manager was promised by another employee at a networking event.
Similarly, if your marketing and sales teams aren’t aligned, you may get many unqualified leads or miss out on qualified ones.
More importantly, employee motivation and productivity relies primarily on the effectiveness of internal communication.
For example, understanding the impact of their role in achieving the business’ primary goals is a powerhouse tool for boosting performance and achieving set goals.
Common pitfalls in internal communication
Understanding the unique communication challenges within your organization is crucial for crafting effective solutions and driving swift progress towards improved internal communication.
Internal communication software providers Staffbase, Beekeeper, and Tettra shared the top pitfalls their clients fell into. Their lists are quite lengthy but here are the top four and how to address them:
1- Providing sufficient opportunities to give feedback
Feedback reveals employee understanding of different roles, teamwork, and stress handling. Additionally, it combats demotivation and fosters engagement. However, this requires active actions from management.
A straightforward way to achieve this is open-feedback meetings after each project.
2- Lack of a proper internal communication mechanism
This mistake takes many forms, managers not providing enough information; constant changes that are sent on a group chat with hundreds of messages a day, or employees in different roles focusing solely on their own objectives, ignoring overall priorities.
Every step, role, milestone, and change should be well-documented and daily revised by every member involved in a given project. There are a myriad of project monitoring tools that help achieve that.
3- Poor onboarding of new employees
The quality of your onboarding process improves employee retention rates by 82% and overall productivity by 70%, according to market research firm Brandon Hall Group.
Onboarding employees is time-consuming and often cumbersome for everyone involved, and remote work adds a new layer of complexity.
By creating clear communication guidelines and easily accessible manuals, you can ensure a smooth transition and quickly integrate new team members into your communication flow.
4- Absence of team meetings and company news updates
Many have experienced unproductive meetings, lacking clear objectives and concrete outcome. Likewise, communication gaps, lack of meetings, and sufficient back and forth can be detrimental.
You can address this by setting clear goals and expectations for each meeting; ensuring company updates are well communicated through a unified network; and avoiding overwhelming employees with irrelevant details.
Examples of companies’ internal communication failures
While external communication breakdowns are often cited as a source of lost revenue, internal communication failures can be equally detrimental.
Here are two examples of companies that have suffered significant consequences due to ineffective internal communication strategies.
Yahoo’s conflicting statements
Global tech and media company Yahoo has had its fair share of scandals over the years, specifically for security breaches.
In 2016, Yahoo acknowledged a data breach from 2014, involving 500 million user accounts. Three months later, Yahoo revealed another security breach from 2013 that had affected twice as many accounts. A year later, the company said the 2013-breach had in fact affected “all 3 billion of its accounts.”
Conflicting statements are often the result of poor internal communication. A 2017 filing by Yahoo said the 2014 “incident” had not been “properly investigated or analyzed.”
It went on to say the company’s “Independent Committee found that failures in communication, management, inquiry, and internal reporting contributed to the lack of proper comprehension and handling of the 2014 security incident.”
At the time, Verizon, which was in the process of acquiring Yahoo, cut its offering by $350 million.
Radio Shack’s mass-fire
In 2006, electronics retailer Radio Shack showed poor internal communication when it fired 400 employees via email.
Not only did the company share life-changing news via email, it also failed to provide reasons for the lay-offs.
Forbes described the move saying “Laying off employees is never easy, but doing it via mass email is a new low in management and labor relations.”
The internal communication mishap turned into a global scandal impacting the brand’s image until the company went out of business in February 2015.
How to improve your internal communications
There are a few steps that can help any business audit and improve their communication.
1- Conduct a communications audit
To evaluate how effective, or ineffective, your company’s internal communications are, you need to begin with an audit. This entails a detailed look into how each task, decision, and goal is communicated and tracked.
Not only does a detailed examination help improve communication gaps and optimize performance, it also helps create a healthy corporate culture.
2- Create an internal communications strategy
Building upon the findings of the audit, a comprehensive internal communication strategy should be either newly developed or significantly revised.
This strategy will help establish clear goals, outline relevant guidelines, and proactively identify and address potential communication risks.
Additionally, the strategy will define effective crisis management protocols, specify the optimal communication channels for various scenarios, and clearly assign communication responsibilities within the organization.
3- Encourage bottom-up an top-down feedback
Develop a culture of regular feedback exchange. Employees benefit from receiving manager feedback, while managers gain valuable insights from employee feedback. Consider implementing quick internal surveys or polls, and even short questionnaires in smaller organizations, to gather diverse perspectives and identify areas for improvement.
4- Engage and communicate with remote employees
Remote or hybrid employees are the new norm for most companies. Internal communication processes should include them at every step, even in impromptu meetings.
5- Make sure employees understand your messaging
As a business, you’re likely to send employees announcements, messages, and directives. But sending is one thing and making sure employees grasp your messaging is another.
If you’re sending out directives or instructions, consider holding a virtual call with your employees. If your company has branches in several countries, make sure the call includes employees in different time zones and is recorded for those who didn’t attend.
Finally, both internal and external communication and messaging affect the company’s brand and image. Internal communication doesn’t just affect what employees do at the office, it affects how they treat customers, partners, sponsors, and other stakeholders.
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