Overhauling internal communications will be your greatest revenue-driver

A version of this article originally ran on Harvard Business Review

In a climate of inflation, economic uncertainty, and fully distributed teams, employees need clear, frequent communication from leaders.

The challenge: Many executives admit they were never taught how to do it efficiently, effectively, or profitably. And many more feel set up to lead in an environment that has radically changed: the in-person workplace.  

• Why it matters: It isn’t a question of commitment. Leaders spend three-to-10 hours per week preparing essential communications for employees, but if those communications are overlooked or ineffective, it’s wasted effort that leads to low morale, lost sales, and missed goals.

That’s costing U.S. organizations $2 trillion per year in time and productivity. So while it might feel like there are a dozen fires blazing, the bigger priority is addressing why they started to burn. Most often, it’s a breakdown in alignment and communication. 

The reward in stronger internal communications

Over 80% of employees would rather work for an organization that values open communication than one that only offers perks like free meals and great health plans. And while it may take time to revise your essential communications strategy, the leaders who invest in getting it right say they also pushed their business ahead in four significant areas:

1. Better employee engagement: Employees who get enough information to do their job well are 2.8x more likely to be engaged, and business units that have engaged workers report 23% higher profits.
2. Greater team alignment with leader vision: When employees get daily feedback from their manager, they’re 2.1x more likely to trust their leadership.
3. Stronger independent decision-making: In the workplace, faster decision-making and execution have a direct tie to higher returns.
4. Improved teamwork and collaboration: Nearly 80% of workers at collaborative organizations “feel well prepared” for challenges, and 55% report growth in their revenue — almost double what weak collaborators can say.

Put these together, and you have highly engaged teams making smart decisions quickly and collaboratively — a strong recipe for success, rooted in clear, effective communication.

The risk in getting internal communications wrong

“Quiet quitting” and the Great Resignation reinforce what happens when poor communication and softening culture lead to low morale and burnout. Unfortunately, internal communications is sometimes an under-invested-in area for organizations, leaving your business to struggle with…

1. Lower engagement. In 2021, for the first time in nearly 10 years, employee engagement dropped in the U.S. In 2022, it fell again to 21%, becoming what Forbes calls a “complex” issue where internal communications “plays a big role.” Boosting engagement requires leaders to remove “obstacles to internal information flow,” or they will continue to watch engagement, job satisfaction, and performance decline.
2. Weaker retention. The “intangible effects” of poor communication create a ripple that can put top talent at risk. Over 40% of employees say they’re likely or extremely likely to consider changing jobs in 2023. When you consider a company of only 100 employees loses $660,000 to $2.6 million per year in turnover costs, executives must provide the culture and clarity employees need to stay the course.
3. Decreased productivity. When communication fails, so do campaigns, projects, objectives — and sometimes even companies. Among employees, 44% say miscommunication and communication barriers lead to delays or failures in project completion, 31% say they’ve led to missed goals, and 25% say they’re a direct result of lost sales.
4. Fractured trust. A prepared team can more easily face the unknown and bounce back from unforeseen challenges. However, employees lose trust in leaders and their organization when communications are withheld, vague, or unhelpful. Only 7% of workers strongly agree communication is accurate, timely, and open at their workplace.

If employees can’t trust leaders to have a plan, communicate it well, and lead through uncertain times, the organization’s ability to function suffers. Employees begin to question the organization’s direction, mission, and goals — leading to doubt and misalignment. 

How to elevate your internal communications strategy

Top executives need an open line of communication with managers and individual contributors. That access and direct connection helps teams feel seen, heard, and respected as your organization grows — nearly 90% of workers with clearly defined goals say they could see themselves working at their company for the next year.

To improve organization-wide communications: 

• Survey your audience. Data has shown a gaping chasm between what leaders think teams value vs. what they actually do. Don’t take it for granted. Ask what insights colleagues are missing. See if updates are too long, wordy, or confusing. Take stock of what’s necessary and what’s adding to information overload. Then take action to fix it.
• Give each channel a unique purpose. When choosing where you should share essential communications, stick with reliable, searchable channels employees can read and revisit when needed. Nearly 70% of employees say they prefer email.
• Customize the context you share. Only 46% of employees feel like they have the context they need to do their jobs. But managers and department leads can only cascade and customize important insights when they receive them regularly from top leaders. Communicate your most essential messages, tailor them to your readers, rather than trying to be one-size-fits-all, and send them on a consistent cadence.
• Create feedback loops. Only 43% of employees say they have an easy way to share feedback on key communications they receive today. Adjust that reality to foster a more open culture where teams feel heard and included in the conversation. There are a variety of tools to gather feedback — surveys, polls — but adding time for feedback to 1:1s and other team meetings can help, too.

The bottom line: Ineffective communication affects your bottom line. Eliminate what you don’t need. Keep your teams focused on what’s essential. Deliver it in a clear, concise, and engaging way. Support the managers around you who need to customize and cascade it. Your teams will be more aligned and engaged because of it. And your organization will be stronger than ever.