What is Business Communication? Why Do You Need It

Illustration of People Standing for Business Communication

The way we communicate with others is such a habitual part of us that we rarely stop and think about it. This translates into business communication too. Organizations, after all, aren’t faceless entities, but groups of real people.

Effective communication affects processes, efficiency, and every layer of a company.

In this guide, we’ll cover all you need to know to set up a successful business communication process.

What is Business Communication? The Definition

Business communication is the process of sharing information between people within the workplace and outside a company.

Effective business communication is how employees and management interact to reach organizational goals. Its purpose is to improve organizational practices and reduce errors. It’s important to work on both your communication skills and communication processes to achieve effective business communication. 

The importance of business communication also lies in:

  • Presenting options/new business ideas
  • Making plans and proposals (business writing)
  • Executing decisions
  • Reaching agreements
  • Sending and fulfilling orders
  • Successful selling
  • Effective meetings
  • Providing feedback to employees and customers

Related: State of Business Communication Report Reveals Shocking New Trends in 2020

All organized activity in a company relies on the process of business communication and your communication strategy. This could be anything from managerial communication to technical communication with vendors.

And once communication becomes unclear, the company’s core systems risk falling apart. Data shows that 60% of internal communications professionals do not measure internal communications. Potential reasons include not knowing where to start, the next steps, or how to calculate ROI.

Why is business communication important?

Strong communication strategy in a company will likely result in higher employee engagement. And companies with connected employees in the workplace have seen a spike in productivity of up to 25%.

Companies with an engaged workforce see a 19.2% growth in operating income over a 12-month period. Those with low engagement scores earn 32.7% less.

How much more successful would you be if you had better employee engagement?

And how can you ensure a business communication process that will make it possible?

Check out the Business Communication Report
1,000+ professionals share actionable insights.

Types of Business Communication

Let’s first differentiate the main types of communication in a typical organization.

First, we have internal business communication.

Internal business communication can be:

  • Upward communication: any communication that comes from a subordinate to a manager. Or from another person up the organizational hierarchy.
  • Downward communication/Managerial communication: anything that comes from a superior to a subordinate.
  • Lateral communication/Technical communication: internal or cross-departmental communication between coworkers

Then, there is external business communication.

External business communication is any messaging that leaves your office and internal staff. It involves dealing with customers, vendors, or anything that impacts your brand.

You can sort all communication in this spectrum into four types of business communication.

  1. Getting and receiving instructions and assignments both upward and downward. This includes an effective delegation from one person to another. Most problems in business begin with unclear communications in this area.
  2. Sharing and discussing information, including information sharing that goes on in meetings. When communication fails in this area, it causes tasks to be done improperly or not at all.
  3. Giving feedback, correction, and discipline to people who report to you so that they can have the knowledge and the tools that they need to do their jobs better. Giving great, actionable feedback is a key skill for anyone in a leadership position. Non-verbal communication and body language also play a role here.
  4. Problem-solving and decision-making meetings and discussions. These are considered among the most important discussions for any organization. This involves higher critical thinking and better communication technology.
  5. Public relations can even be considered a form of external communication that is important to your communication strategy. 

Which Business Communication Methods Does My Business Need?

The answer largely depends on the size and preferences of your business. There’s no one-size-fits-all solution. One thing is for sure: you will set yourself up for success by only using business communication methods you need and will actually use.

For example:

You want a forum board, so you and your staff spend weeks finding the best solution and setting it up.
After a while, you learn that no one is using it because they get their answers quicker from their team or documents. An unnecessary solution has cost you valuable time and money.
Or you install a quality video conferencing system, when in reality you only need a reliable business phone system to run your remote meetings.
Every business will use web-based communication. All the other methods, however, will depend on individual company circumstances. Take the time to mindfully consider the value of each for your unique situation.

Problems That Effective Business Communication Can Solve

Clear and effective business communication is critical for teams, employees, managers, and executives to perform their jobs and fulfill their responsibilities.
Without the right processes and tools in place, the flow of information is interrupted and people are left in the dark. This can lead to serious consequences for the company, from unsatisfied employees and customers to lost profits.
Transparent flow of information is an obvious overarching goal of a business communication process. But what are some deeper problems that successful business communication solves?

1) Email overload and lack of everyday productivity and clarity

In many workplaces, people are simply overwhelmed with the number of messages they receive in a single day. In his book Message Not Received, Phil Simon said the average person receives 120 to 150 emails per day.
We easily misplace or completely overlook a crucial piece of information. With a business communication system in place, companies can reduce digital distractions and create space for ideas and thinking.

2) Horizontal and vertical communication silos

Often times, teams and departments don’t exchange essential information. Other times, there’s no easy way of reaching out to a department manager when there’s an issue inside a team. These silos form easily and often without anyone noticing, but can easily be remedied with a communication plan in place.

3) Poor communication with remote employees

Remote work is here to stay. The State of Remote Work report from Buffer shows that the vast majority of employees would like to work remotely for at least some of the time.
They list collaboration and communication among the top three struggles when it comes to working remotely, proving the value of the right communication systems in place.
Related: Telecommuting Technology: The Essentials for Remote Work

4) Employee turnover/Low employee engagement

Losing the ideal people from your organization puts your ability to serve customers at risk. It’s also expensive.
Losing an employee can cost as much as twice their annual salary, but when companies do communicate effectively, they are 50% more likely to report turnover levels below the industry average.

5) Poor customer service

If there’s poor communication in an organization, two things happen when it comes to customer service. First, employees in customer-facing roles won’t have the information they need. Second, customers will sense low employee morale and have a negative experience.
In fact, one study found that employee attitude improvement impacts customer satisfaction, which then results in an increase in revenue.

What is the importance of non verbal communication in business? 

Non verbal communication covers so much ground – from your facial expressions to your tone in an email. Considering the vast majority of business communication happens asynchronously (meaning anything other than an 1-1, face-to-face meeting) via email, project management task boards, or chats…almost all of our business communication can be considered non verbal. Therefore, it’s incredibly important to work on your non verval communication as well. 

Top tip? Read something out loud before you hit “send.” This is a good gut check to hear how your message is coming across. 

5 Steps to Set Up Your Business Communication Process

Business Internal Communication Graph

A solid business communication process is essential for the happiness of your employees and customers. Ultimately, this leads to financial stability.
One report discovered 29% of employees believe their current internal comms tools aren’t working.
Here are some of the reasons they listed:

Irrelevant information, exclusion, dishonesty, and lack of access to key information is something your own workforce likely experienced, too.
A study by Salesforce found that 86% of executives, employees, and educators consider inefficient communication to be the reason behind workplace failures.
We can no longer ignore the importance of teamwork and chemistry and their impact on employee productivity, engagement, and advocacy. Here are the steps you can follow to ensure a successful business communication process.

1) Audit your current state of business communication and set goals

No matter the stage of your business, you need a business communication plan in place.
However, you will make it the most useful if you focus on the areas that need the biggest improvement right now, and work your way to all other areas later on.
For example, these might be some of the reasons your communication needs revisiting:

  • Low employee satisfaction or high turnover
  • Lower than expected outputs across the company
  • Fast growth which leads to losing track of information
  • Lack of information transparency due to remote work

You might experience more than one of these, or a completely different scenario. Identify it and set goals for your business communication process based on it. For example, your goals can include:

  • A specific employee turnover or satisfaction rate
  • Customer satisfaction rate
  • Number of projects completed
  • Number of interactions between departments

…and more.

2) Identify core groups in your organization and their relationships with each other

Look into the structure of your organization and all the groups involved in its ability to function.
Take note of every group that requires information to function. This should include:

  • Horizontal classification, i.e. departments (operations, marketing, design, human resources, sales, customer support, finance, and more)
  • Vertical classification: professionals in teams, team leaders, department managers, executives
  • External groups: customers, suppliers, partners, and more

From here, considering the work they do on an ongoing basis and the results expected of them. Map out the way they need to communicate in order for their jobs to get done.
Depending on your company size, this might be a large task, so give yourself plenty of time. Some of the main questions to answer are:

  • Which teams and people have to talk to whom on a daily basis? What about weekly, biweekly, and monthly?
  • What communication happens only when there’s an ongoing crisis?
  • How are managers and team leaders maintaining progress in their departments? How does reporting work?
  • Is there a knowledge library that has the potential to reduce unnecessary meetings and conversations?
  • Which projects and processes need approvals from other people in the company? How are approvals requested and facilitated?

At a minimum, these answers should give you an insight into the necessary amount of emails, messages, calls, meetings, and documents for everything to happen in the designated time frame.

3) Define methods of communication

Next, choose the methods of communication that align with your business communication goals, as well as the interactions between core groups in your company.
Review the list of methods of communication we discussed earlier and make sure to add any unique to your company:

  • Web-based communication
  • Telephone meetings
  • Video conferencing
  • Face-to-face meetings
  • Reports and official documents
  • Presentations
  • Forum boards and FAQs
  • Surveys
  • Customer management activities

Which ones of these are essential for your organization to reach its goals? What’s optional and might see resistance in adoption? Which ones create the risk of adding too many tools and should be simplified?
Be realistic about your specific needs.
For example, a five-person startup where everyone works in the same office will likely focus on:

  • Web-based communication
  • Face-to-face meetings
  • Customer management

A 50-person company that is fully remote will invest more resources into:

  • Phone and video conferencing
  • Document organization to be able to diligently track their processes

A large global enterprise will probably use all of the listed methods of communication and have dedicated teams for many of them.

4) Choose the right tools

There’s no handbook that defines which tools are absolutely best for each purpose.
Gmail versus Outlook. Google Drive versus Dropbox. Slack versus Nextiva Chat.
The battles go on, but your choice is entirely up to the preference of you and your workforce.
While we can’t give you a list of software tools and leave you be, we can share these tips when it comes to selecting the right tools:

  • Use cloud storage to preserve important documents and other data. Enable automatic sync and backup to avoid human error and forgetting to manually save information to it.
  • Use a single platform for emails and calendars.
  • Use a single tool for chat messaging. For example, if some people are using Slack and others Hangouts in their Gmail, it will create friction and slow down communication.
  • Implement an easy-to-use, reliable VoIP phone system if many of your meetings happen remotely.
  • Develop brand and editorial guidelines that detail the tone of voice and use of brand elements. This way, all communication is unified, internally and externally.

5) Document the process

Finally, take note of everything you do throughout this setup and turn in into a shared document visible to the entire organization.
This way, each employee can refer to an intentionally developed communication plan and decide on the best action for the situation they’re in.
The document will also help newly on-boarded employees easily grasp all the tools and best communication practices.
You can create a recurring calendar reminder for yourself and your team to revisit the document once a quarter. This way, you will ensure the plan is still serving its best purpose and update it if necessary.

Business Communication Channels

When business communication actually happens, it’s either verbal or written.

Communication takes place either in many forms – verbal or written, in-person or remotely, but it is critical to the happiness of your employees in the workplace.

Neither of these are better or worse for your company on their own and entirely depends on the context.

Written communication is great for keeping a paper trail of decisions and actions made as well as for putting together strategies and plans in place. Verbal interactions enable instantaneous idea generation and a more open flow of thoughts.

These are the methods of business communication applicable to some or all of the above scenarios:

1) Web-based communication

This includes everyday communication channels like emails and instant messaging applications (such as Slack, Hangouts, or even Nextiva Chat).

The benefits of emails and messages lie in the ability to lead private conversations in a busy office environment, as well as sharing a message with many people—from a few to hundreds—all at once.

2) Telephone meetings

Phones removed the location barrier to running productive, fast-moving meetings. It allows for better idea exchange thanks to the non-verbal communication (tone of voice) compared to written communication. Cloud phone systems can accelerate onboarding and overall team collaboration.

3) Video conferencing

Great video conferencing systems enable people at remote locations to run meetings that feel as close to in-person meetings as possible. They take phone meetings one step up.

4) Face-to-face meetings

In-person meetings can help a business move forward with ideas quickly. Research shows that in-person meetings generate more ideas than virtual meetings.

Related: Business Communications: The 10 Best Customer Service Examples

However, having a rock-solid meeting agenda is essential for effective meetings. 46% of employees rarely or never leave a meeting knowing what they’re supposed to do next.

5) Reports and official documents

Documenting activities that impact other people and departments is a crucial part of a well-oiled business communication system.

The ability to refer to a written document at any moment reduces the chance for confusion or disagreement and provides extra clarity in communication.

6) Presentations

Presentations supported by reports and PowerPoint slide decks are often how meetings with larger groups are conducted.

These are great for sharing new ideas in a way that creates space for questions and any clarifications.

7) Forum boards and FAQs

An internal area for employees to refer to frequently asked questions on various departmental topics and to ask new ones that will make them more productive and up-to-date on a matter.

8) Surveys

Both internal and customer surveys are an ideal way to gather feedback and ratings on important topics. Surveys facilitate a healthy cycle of feedback-supported improvements and open a communication channel between all levels inside an organization.

Related: 60+ Customer Satisfaction Survey Questions You Can Borrow

9) Customer management activities

This can include any customer relations activity. Examples include live chat support, customer relationship management (CRM) systems, customer onboarding process, customer reviews, and more.

Your Company Success Starts With Communication

Poor communication carries too many risks to an organization to count.

Great communication, however, brings an opportunity for outstanding employee and customer engagement. It creates clarity, more significant outputs, and growth in revenue and profit.

Related: What Is a VoIP Phone & How Does It Work?

Whether you have a business communication system in place or are yet to establish one, remember to:

  • Set and revisit your communication goals as a company based on the current state of communication in your company
  • Identify everyone involved in processes that make your company do its job, day after day
  • Analyze their needs to communicate with each other and identify methods that make the information flow possible
  • Look for the most appropriate tools and platforms that will enable the methods you identified
  • Share this setup transparently with the whole organization

As a result, you’ll see happy, productive people excited to work on projects and create meaningful results for the benefit of everyone involved.

Ready to invest in tools that can help improve your business communication? 

Nextiva’s business software helps organize your team’s communication by bringing it all into a single platform. No more shuffling around to find what you need, no more frustration flipping between screens. It’s all here in a single platform. This tool makes your work life more simple and helps bring all your communication into one view. 

Talk to an expert today to see how we can help simplify your business communication. 

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