Why Effective Communication Is Important In Business?

Why Effective Communication Is Important In Business?

While the businesses emphasize on delivering an excellent product, they fail to recognize the impact of effective communication on their project success & revenue. A research by Twilio founds that 81 % of customers criticize that there are breaks in communicating with their business partners, but only 34% percent of businesses admits room for improvement.

Today’s evolving technology takes business communication through a wide range of opportunities - over e-mails, chats over apps and meeting over in-person or the phone. However, miscommunication still occurs. Effective communication is something more than communicating information between clients, teams, and companies; they should be delivered responsively.

A good company may not receive complaints from the clients related to code quality, ethics, and performance of developers, but in a few cases, it will be related to poor communication. Here, we will be highlighting the power of effective communication in business and the best practices to implement the same.

Costs of Miscommunication

Failure to communicate properly in even the smallest way can have disastrous consequences, including huge delays in deadlines, financial losses, business failures, lost profits, and tense business relationships.

How expensive the poor communication in terms of human and financial costs is equally frightening. In a survey conducted by the Economist Intelligence Unit & Lucidchart, the respondents rated the cost of communication breakdowns as follows:

Costs of Miscommunication

Causes of Communication Chaos

Ineffective communication will not only impact the enterprise internally but also extends externally. Understanding the communication breakdown in a business relationship can keep you out from all these headaches.

The chart depicts the few reasons that cause communication breakdowns:

Causes of Communication Chaos

Examples of communication Chaos in a business relationship

  • Long messages waste time, as they are tough to concise what it means and expect a long reply.
  • Conversely, short messages also waste time as they are likely to be misinterpreted and invite more enquiries
  • Infrequent communication between stakeholders, clients, and team members is another pitfall. This makes an interruption in sharing the project objectives, timely measuring the project deviation, taking appropriate action and staying on top of the development
  • The absence of timely and prompt response sometimes holds the process and keeps others waiting which may delay the project deliver
  • Overloaded emails become confusing, inefficient and bad for productivity. The message that can’t be completed within three email exchanges creates a long thread of back and forth messages. Live conversation can solve the issue quickly.
  • Immediately sending responses, but without any value won’t be enough to take the conversation forward and substantially cause less attention & low productivity.

How are the leading businesses making good client communication experiences?

Businesses are bridging the communication divide with three clear segments: the right channel, the right information and the right time.

Responsive communication

As an entrepreneur, you should eliminate the communication chaos to reduce the time you spent on them and concentrate on conversations, actions, and thoughts that will lead to success. Best practices to ensure effective communication are:

Regular update

 Sharing information frequently with the team and clients will empower them to be updated anytime and prevent them from thinking left in the dark. Instead of sending occasional emails when there are any issues, it is best to schedule a weekly update meeting or a daily stand-up meeting. The usual highlights in the update are:

  • Yesterday’s /previous week Completed tasks
  • Budget spent, as well as remaining on each stage
  • Planned tasks for today or the following week
  • Any blockage that slows down the work and what would be its impact on the project

This strategy makes the invisible visible and gives you an idea of what is working and what is not.

Be conscious, be complete and get your facts right

Any message you communicate needs to be clearer rather than making recipients assume things or coming back for clarification. This will reduce the time being wasted. Avoid adding too many details on the single message that will dilute the attention. The complete message avoids communication iterations, tons of back & forth and waste of efforts & time on both ends.

Choose the best way to communicate

Email is the most overused medium of communication today. However, it helps businesses to record conversion for later use. To thrive in business, it is important to find the right tool that effectively collaborates with teams in real-time so they can answer as well as share information. Chats on apps like Slack or HipChat for internal discussions, calendar apps for meeting scheduling, Dropbox or Google Drive to store or share documents and phone or live conversation for urgent matters ensure effective communication.

Benefits of Effective Communication Strategy

Practicing responsive communication in a business relationship can boost your productivity and profit as they ensure each part of the project is progressing seamlessly together. Productivity to businesses generally means obtaining the maximum returns for the time and effort invested. Research by Watson Wyatt stated that companies that follow effective communication had received 47% higher returns over 5 years.

Here are the benefits of effective communication that boost the overall productivity of your business.

1. Make Intentions Clear

There is no longer a guess on priorities or assumption on measuring the achievements. When the team communicates efficiently, the information is smooth and free. The entire team has a better understanding of what they need to do, how their effort contributes to the project success and how it works in cooperation with the others’ work.

Everyone synchronously works with how the project is functioning and how it needs to be completed effectively. If there is any change in the general structure, everyone in the team will know right away the impact it has on the workflow.

2. Enhance transparency and trust

Another way that responsive communication improves productivity is by using transparency. Frequent updates, involving everyone in decision making and using open communication channel ensures transparency. Being transparent provides the information that you need to understand what is happening at the time you need it. It avoids unwanted surprises. The transparency builds trust that leads to an enhanced workflow that eventually opens the door for greater achievements.

3. Reduce Costly Errors & Increase Revenue

Ensures the development team is equipped with the resources and support they required to perform their roles accurately. The issues that block the team from moving forward are resolved promptly in an effective manner.

Hence, no need to keep asking for rework and it allows the team to be more productive. As it gives more confidence in team performance, you can widen your involvement in new solutions and find innovative ways to reduce Business as Usual (BAU) costs of your existing services.

4. More Innovative & Collaborative

“An idea is only a seed; it takes a cross-functional team to bring it alive.”-

Judy Herbst, Worthy Inc

This effective business communication approach holds the key to idea generation. This two-way conversation medium offers a safe and centralized environment for cross-functional team collaboration and sets forth ideas & brainstorms with their peers. It supports to implant a culture of innovation when you recognize their best ideas.

More ideas generate greater opportunity, growth, market share, innovation and eventually, profit.


Responsive communication is not just about transmitting information and ideas. It is about mitigating issues and creating a healthier work relationship. Communicating the right information in a clear and timely manner leads to higher performance and fewer bucks at risk. It is crucial when it comes to a colleague and client relationships, company culture, team development, and employee engagement.

Clear and effective communication can aid you to build a positive work environment, which will do wonders for your business. We, at Clarion, are ingrained with responsive communication in working culture. We have been able to delight the clients with a responsive and timely update through the right channel.


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