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Why is Business Communication Important?

Whether you are in foodservice, logistics, construction or anything in between, one constant problem hampering corporations across the United States is the lack of business communication: aka transparency. For instance, how many of your employees know the financials of your company? How many know the actual end game of their department? Do you have critical numbers your managers track? Can all employees name them?


Woman writing in spiral notebook

It all boils down to transparency and communication. While a lack of transparency might be beneficial when answering the question “How do I look?” this only bogs things down in a business setting. There’s nothing fun about having a project signed off on only to be completely rebuilt right before shipping. Why wasn’t there transparency and communication from the get-go? That would have saved hours of labor and thousands of dollars in development. Transparency matters…

It saves time (which is cash), energy, employee psyche, and it saves you from tying up your best people. If your employees know where everyone stands, then more would get done. Productivity would reign supreme! Sounds like a nice fairytale, but it could be the norm in your business and frankly should be if you have your bottom-line in mind!

Why Business Communication Matters

Research out of Kansas State University found that when employees are happy they are more productive and less likely to leave their job. Professor Thomas Wright explained, "Simply put, psychologically well employees are better performers. Since higher employee performance is inextricably tied to an organization's bottom-line, employee well-being can play a key role in establishing a competitive advantage." This is because happy employees are better decision makers and demonstrate better coworker interaction traits which increase the happiness of even more employees. Think of them as the keystone to a successful and happy workforce!

Business communication is a KEY method for decreasing employee anxiety and increasing happiness. With over 41% of employees experiencing anxiety in the workplace, we need communication tools in place to help them “don’t worry, be happy!” U of T Scarborough and Rotman School of Management Professor Julie McCarthy explained, “High levels of workplace anxiety will lead to emotional exhaustion and this will ultimately affect job performance…” and your bottom line. Interested in that?

Through his consultation work, Professor Wright developed a method to show the actual business savings tied to your employee well-being… Say you have a manager who makes $65,000/yearly. Wright found that if this employee is unhappy or really distressed, you can lose as much as $75 a week in productivity and that’s per person. Do the math! Have 75 employees? That equates to roughly losing $5,625 in productivity per week or $292,500/year… Not worried about that, huh?

Laptop, tablet, and cellphone on table

Is Communication Lacking at Your Office?

You obviously want happy, more productive, loyal, dedicated employees or you wouldn’t be reading this article. It all starts with opening the lines of business communication! A study published in International Journal of Productivity and Quality Management found that one of the top indicators of an employee’s job satisfaction is communication between employees and upper management! If this is lacking, then it’s probably pretty obvious.

One way to determine if you need more communication among your hierarchy can be found in this quote by D. Keith Denton of the Department of Management (Missouri State University), "If there is a high level of engagement, the leader can expect that members of the group will express their feelings, concerns, opinions and thoughts more openly. Conversely, if trust is low, members are more likely to be evasive, competitive, devious, defensive or uncertain in their actions with one another." Your employees would likely benefit from more communication and that usually starts at the top.

Transparency Between Boss and Employees

Across corporate America, you will find that many employees have never talked extensively to their CEO (if they’ve even met), much less brought ideas to his/her desk. How accessible are you? When was the last time someone from the bottom of management came straight to your desk with a suggestion? What if that suggestion was out of this world and would crush the competition but they are afraid to take it to you? That would be the exact opposite of ideal, right?  Instead of going through multiple corporate levels of managers who forget about their email or send it to the wrong person… Can they just take their ideas to the top? This makes complete sense, right?

Being inaccessible as a CEO leaves many of your employees thinking, “What do they do up there in that 3,200 square foot office?” Or you sit there thinking, “Why does it even matter how productive I am, I’m simply a cog in the corporate machine… they don’t care about me...”

CEO Communication

Woman watching speaker

As CEO you are out there creating business, forming partnerships and reducing production costs… but your employees don’t necessarily see that. It all boils down to a serious lack of business communication and transparency. As a CEO or a senior leader you need to continually and effectively communicate the happenings of the company. What direction are we headed? How do each of us affect the company? What’s in it for the employees?

Everyone is more apt to go the extra mile when they have some skin in the game and aren’t simply there to pick up a paycheck and a few paid holidays… Why not communicate this? How hard would that be? How hard would it be to simply write a weekly email about what’s going on in corporate this week and recognize those deserving? These are exactly the lanes that will drive loyalty and your employees going the extra mile!

Opening the Lanes of Communication

So this begs the question, if you want more transparency in your office, what do you do? For starters, are you vertically or horizontally integrated? How many managers are between you and the ground floor? That’s just the tip of the iceberg we will cover in our 10 part series. We will expand on these 10 methods to make the office more communication friendly:

  1. Quarterly Newsletters
  2. Intranet / Social Groups like Facebook Groups
  3. A comfortable setting where employees can congregate
  4. Informal social outings
  5. Monthly huddles
  6. Open book management
  7. Birthday/anniversary emails/bulletin boards
  8. Open door/email policies
  9. Clear goals that depict expectations
  10. Talk to employees

People with open notebooks and pens

Business communication isn’t rocket science. It’s about being true, honest and upfront with your employees. Denton of the Department of Management at MSU explained that simple face-to-face communication is and will always be the most effective. As he said, “It is the only place where true dialogue can and does occur."


As you can see being transparent isn’t just about taking "Business Communications 101". It’s about implementing simple, small steps in order to make your employees happier, more productive, and overall healthier.  This correlates to an improved bottom-line, a growth mindset and an overall better place to work that you can be proud of steering! Try, fail, learn, communicate, and grow together!

Come back for our step-by-step series on how to perform each of these 10 methods as we improve your business communication together. They don’t have to be massive formal efforts like we will lay out but every step towards clearer communication matters!