What Does Poor Communication Cost You?

You know as well as I do that there is a lot of waste in business communication, but we should try to do better than that. Can we put a price tag on what communication costs you and your organization?

When financial advisers help people get control of their finances, the first thing they do is make them track their spending. That’s usually an eye-opener and it’s a crucial step to motivate real change.

I’d like to do the same for you as your lean communication adviser—to give you a little added push to improve your own communication, and if you’re in position to do so, to encourage changes in your own company that will take a surprising amount of waste out of daily communication.

Let’s focus on the two biggest sources of waste in business communication: meetings and email.

Between the two, they can take up about 60% of your work hours.

A study by Bain says that meetings take up 15% of an organization’s collective time. That number sounded low to me when I first came across it, and that’s because the percentage climbs as you move higher up the ladder. One study found that top executives spend approximately a third of their time in formal meetings, and that doesn’t count the time on phone meetings or business meals, so it could be up to 40% of their time.

Peter Drucker said, “One either works or meets. One cannot do both at the same time”.  But let’s give meetings the benefit of the doubt and assume that the time you spend in meetings contributes to the productivity of your real job, and then subtract the percentage of time that meetings are found to be productive. In one study, respondents surveyed estimated that 50% of the time they spent in meetings was wasted. So if you spend 40% of your time in meetings and half that is wasted, that takes 20% off the organization’s productivity right there. Insert your own numbers to do the math.

But it doesn’t stop there, not when you consider the hidden ripple effect that some meetings can have across the organization. How many meetings have you gone to, just to prep for higher-level meetings?

That Bain study I just mentioned analyzed the Outlook schedules of everyone in a large company to figure out the actual impact of the company’s weekly Executive Committee Status meeting.

• To prepare for the meeting, senior-level participants spent 7,000 hours annually. Meeting with their unit heads. 7,000 hours

• Unit heads meet with their senior advisers to prepare for those meetings: 11 unit heads x 1,800 hours = 20,000

• Senior advisers get information from their teams: 21 team meetings averaging 3,000 hours = 63,000 hours

• The teams need to spend in prep meetings time synthesizing the information: 130 meetings x 1,500 hours = 200,000 hours

No wonder John Kenneth Galbraith said, “Meetings are indispensable when you don’t want to do anything.”

The next largest chunk of time taken out of your day is dealing with email, which takes up about 28% of your time according to a survey by McKinsey—let’s just say 25% to keep the math simple. What percentage of those emails are waste? One article in the HBR estimates that 80% of emails are wasted. A survey by Atos Consulting in the UK says respondents spent 25% of their total time writing emails that add no value.

Bill Jensen, the author of The Simplicity Survival Handbook, says 80% of internal communication shares information that does not require action, and there is no consequence if you ignore it.

So, if 80% of a quarter of your time is wasted, that’s another 20% of your total productivity.

With just meetings and emails, poor communication sucks 40% right off the top of your productivity.

By now it should be pretty clear that there is a huge amount of waste in business communication, but at the risk of talking past the close, let me cite just a couple more statistics that relate to real work: getting projects done on time. The computing Technology Industry Association ran a poll in 2007 in which 28% of respondents said that poor communication is the #1 cause of project failure. And the Project Management Institute in 2013 said that for every 1B spent on a project, $75 million is at risk due to ineffective communication.

When you add all this together, not to mention the cost of errors and misunderstandings, it’s clear that at least half of business communication either does not add value or actually subtracts value. If those numbers aren’t enough to motivate you, I don’t know what will.