Why businesses succeed or fail

Good communication is the driving force to why businesses succeed or fail. Communication is the transfer of information from one place, person or group to another. Each communication includes at least one sender, a message and a recipient. In today’s world we have numerous ways to communicate. News comes to us on a 24 / 7 basis via radio, television and the internet. People are calling, texting and emailing others. There are many vehicles for sharing information such as Facebook, Twitter and LinkedIn. With all these means, communication, especially in business remains a big and important issue.

Communication should be a simple process, but yet it isn’t. The sender usually uses a mixture of words and non-verbal communication. The recipient gets the input and should provide some response to it. If there is more than one recipient this might get more complicated. Two or more people may read very different things into the choice of words and/or body language. It is also possible that none of the recipients will have quite the same understanding as the sender.

Good communication is not only an exchange of information. It also plays a part in why businesses succeed or fail.

It is also a thorough understanding of the information.  Then, some ensuing action can take place. Too many times, the understanding of the message is either ignored or misinterpreted. No resultant action takes place. In such a case, good communication has not taken place. This is not good if you want a successful business. This is the reason why many businesses succeed or fail.

This has happened too often in my career. On several occasions, I passed along information. The receiver claimed that they didn’t take the time to read it or didn’t understand what was sent to them. They didn’t do anything with it.

In one instance I was working with a client on a plant layout project. The company was upgrading their operations. They wanted to improve what was a poor flow of materials through their plant. They were making decisions on what changes to make to the operations. They were to provide that information to me. I would then factor in what to include in the new operation and lay out the facility.

At first the information flow was good. They identified what equipment was and was not needed. They gave a general listing of new equipment. They also identified what types of materials would be located where. We were off to a good start.

After that, communications went downhill.

No specific information came about the new equipment. The amounts of stored materials were not defined. I was on a tight deadline to create the layout plan. Without the needed information, I could not provide a proper layout. Promises were made that the information would be provided. Time ticked by and yet nothing came. Many messages were sent to the Plant Manager, requesting the information. A meeting to resolve this was also requested. There was no response.

In desperation I told the company’s Vice President about the problem. He promised to resolve the situation. He didn’t and more time ticked by. Then, out of the clear blue, the VP sent me a scathing letter. The project was late and that it needed to be completed immediately. I was dumbfounded. He was aware of the situation and yet was blaming me for the fact that things were slipping.

To address the situation I had a meeting with him and the Plant Manager. The entire story was discussed. Both acted as though they were unaware of the many requests for information. They also failed to acknowledge their earlier promises to deal with the problems. New promises were made and were kept. The project was completed. But, there was now a bad feeling on both sides.

Communication or a lack of it was the big stumbling block.

The Plant Manager was to blame for not providing the information he had promised. I was also to blame for the situation escalating. It is a habit of mine to follow up on communications I send within 24 hours. I ensure that people have received the information that I have sent, read it, and are taking some action. It is a shame that this extra effort is necessary. But, something that may be important to you is not to someone else. If you want to ensure that you get what you need, do not assume that what you send will be read and a disposition taken. So, blaming the receiver for inaction, while justifiable, is not an excuse. Follow-up is a mandatory action to take.

In this situation I did not follow my own policy about communication. I should have pressed the matter more. I got complacent and relied on promises that were not kept. You may feel that what I did should have been enough. Unfortunately in today’s world it is not. For some reason people do not follow through. That does not excuse you from this. I learned from this and follow up regularly on important communications.

There are many keys to running and maintaining a successful business. They also play a part in why businesses succeed or fail.

These include things such as:

• Commitment – The company’s leaders ensure objectives are set, and a plan is in place to achieve these. Organizations should not start down the path until this is done. Or they risk initiative failure. Failed initiatives may cause employees to question future ventures.

•  No excuses – Excuses are not acceptable for initiative(s) not completed.  Something deemed important is either important, or it is not. If not, then don’t start it. If it is, then do what it takes to get it done.

• Set the plan and work the plan – Once the plan is set, don’t deviate from it. How one handles this is the difference between why businesses succeed or fail . All plans are not perfect and need modifications as they proceed. Many companies start down a road, and a new initiative or way of doing things occurs. They change course and a new initiative begins.

The umbrella over each of these is communication. And good communication is why businesses succeed or fail.

Without proper and ongoing communication, problems will arise that could have been avoided. Even when corrected, it costs time and money that could have been spent on more productive things. This can be the difference in why the business succeeds or fails.

A favorite client of mine, wanted to develop a five year operational strategic plan. They had never done this before. They needed someone to establish the first plan. One of their employees would follow the work. He would then be responsible for developing future plans.

In developing such a plan it is important to discuss developments with the following departments:

• Sales
• Marketing
• Engineering
• Operations Research and Development
• General Management

By doing so, the developer identifies all needs and wants of the various departments. These are then shared with the others so a priority of needs is established.

This was the path used in developing the initial plan for this company.

After meeting with many people from each department the following was discovered:

1. There were 250 initiatives going on in the company.

2. Each department had little or no idea of the initiatives in the other departments.

3. Personnel did not have knowledge of the initiatives in their own department.

4. Many of the initiatives were in conflict with other initiatives. Talk about a lack of communication! Without this study no one would have known what was happening in the other departments. As initiatives bumped into each other, conflicts would arise over which to use or not. Countless time and dollars were being spent on items in conflict with each other. If the wrong ones were implemented, they could damage those which were important.

Poor communication does not happen only in large organizations.

I have seen this occur even in small companies. People who sat five feet from each other failed to communicate important information. One client took three days to move orders from Customer Service to Operations. They were within arm’s reach or each other.

So what do we do about this? First, it has to start at the top. Business owners and executives must stress good communication, daily. This means that they have to practice what they are preaching. We call this “Walking the talk”. If they do not, they will not see this practiced by their employees. Employees know what is important and will act accordingly. If they feel that their leaders are insincere, they will ignore their directives. This can be a major reason why businesses succeed or fail.

When leaders do stress the importance of improved communication, certain employees will resist. It is important that there be ramifications if this happens. Good communication is not a choice. It is a business must. There are employees who will see there are no consequences for not communicating. Once that starts, it will happen more and more. So, it must not be tolerated.

I had an employee who was brilliant at product development.

He felt that because of his knowledge he was invaluable. But, he refused to share his knowledge with others. We discussed this and I told him that by doing this he was not invaluable, but a liability. If he was the only one with certain knowledge and something happened to him, the company was in trouble. His value was in sharing his knowledge. That is what made him so valuable. He never thought that way. So, he then spoke to others who told him the same thing. He changed his approach and gained a new found respect from his colleagues.

As a consultant, communication between myself and my clients was critical.

Basic rules between any consultant and the client are:

• Set up clear expectations of both how the project should progress. Make sure you are both on the same page. Checks should occur throughout the engagement.  If something is not right, immediately address and correct the problem.

• Ronald Reagan said that you should “Trust, but verify”. This is a good practice to follow. The client should not take the consultant’s word that things are fine and are proceeding as planned. There should be proof through studies, analysis, update reviews and the like.

• Many consultants like to throw around “Consultant speak”. It may be because they typically use certain terms, acronyms, or such. Both sides should be clear on what is being said.

• Business conditions change. When they do, these need to be communicated quickly. Otherwise, the consultant is proceeding according to a wrong plan. 

• Communicate, communicate and communicate. This cannot be stressed enough. The consultant has been given a very important assignment.  The outcome will make a difference to the company. He or she is entrusted with assisting the client to make this happen. If the client loses that trust that is something that is hard to recapture.

Great communication is essential to a successful business.

Poor communication can ruin it. This is a major reason why businesses succeed or fail. Take the time now to honestly review where your company’s communication stands. Make sure it is great. If not, contact me and let’s work on making it great. You and your business will be the better for it.