Focus is important when it comes to running a business. Look at any advice-based articles on the web and you will typically find “make sure to focus” as one of the key points. It is important (obviously) to keep your head in the game and your mind on track, no matter whether you’re a small company just starting out or a big company trying to up their revenue.
But, although staying focused is a must for any B2C or B2B company, we’re here to tell you that it can be a little bit of a catch-22.
That’s right, despite what you may think, there is a line that can be crossed when it comes to the whole “staying focused” direction. A lot of the time you can be so intent on making sure your business is working that you forget the basic principles that can make or break your company. That is the communication that you carry out between you and your stakeholders.
Communication is the single biggest factor when it comes to whether your company is going to survive beyond the teething period. You can remain focused and committed on creating a business vehicle that will drive you smoothly to green pastures, but without communication there is still a big pothole which you can easily fall into.
Why Is Communication Important?
When we focus on something we often shut ourselves off to external noise, and that’s even more easily done within the business world. A lot of the time it can be just you, the facts, figures and contingencies, working on a loop and ignoring anything that could take your head out of the game, even if it includes your own stakeholders. Despite everything you are achieving, however, poor communication can be the difference when it comes to success or failure.
According to a recent survey, as much as 74% of businesses fail due to poor communication and ineffective leadership. This is why it is so important to keep it up. Reputational management agencies such as Percepto are growing more popular by the year, particularly due to the fact businesses are recognising their need for help and assistance in certain aspects of this area. The more businesses seek that help; the less chance there is of those businesses failing.
Who Are Your Stakeholders?
You might be thinking: well, of course we’re going to communicate with our customers, we don’t need a whole article to know that. But stakeholders do not just include your clientele. The term “stakeholders” includes your customers, employees, investors, suppliers and even the government. Anyone that has an interest in the operations and activities of your organisation is a stakeholder, and each one has to be communicated with decisively and as regularly as possible. To give you an idea of why it is important, here is a brief example of how poor communication can negatively affect each one of these areas and why you need to put in the work to keep it strong:
Customers
No matter if you are a B2B or B2C business, your customers want to feel seen and valued. They also want to be able to look through the wall that divides the space between you and them. Transparency is always crucial, especially in B2B. Poor communication can gradually make that wall opaque and lead your clientele to move away to a rival with more transparency and room for interaction.
Employees
There are a number of reasons why poor communication is inherently negative for an employee base. First off, poor communication can lead to misinformed customer service, which can then have a knock on effect with your customer relations. Secondly, lack of communication in the workplace is known to lead to higher employee turnover. According to employee-based surveys, the process of replacing an employee can cost 3x their salary, as well as garner a poor reputation in your specific field. Because of this, it is important to keep employees and provide good, communicative leadership.
Investors
Investors, much like the customers themselves, need transparency in order to stick around and remain invested. They can also be the key when it comes to your company’s future challenges and pitfalls. In this way, poor communication could not only damage your company’s funding but also leave you more at risk to issues that could have been averted with investor guidance.
Suppliers
Communication with suppliers is largely important due to how many parties are involved in each step of the supply chain. Keeping on top of communication can help you avoid lost or late deliveries, poor inventory planning, as well as higher storage fees. Each one of these aspects can negatively affect your business, which is why it’s important to keep on top of communications with this stakeholder and ensure operations run smoothly as a result.
Government
Many business executives have suggested that companies are far less robust in their management of government relations compared to any other stakeholder. The government has a significant effect on a businesses value. Whether it’s the passing of laws, implication of new policies, providing infrastructure or upping access to capital; the government undoubtedly has a hand in how your business will proceed, meaning communication and clarification will be integral in your navigation to success.
Overall, it is important to understand the significance of communication. Insular businesses will always fall shorter than businesses which keep in direct contact with stakeholders. So whilst you’ve got your head in the paperwork, make sure to lift it up as regularly as possible to keep your company open and accessible to everyone who is involved.
