Teaching the ABCs of Business
Guide: Small Business Communications
                  By John D. Collins
It is often said that communications cause 80 percent of the problems in business. This guide has been written to help business owners and their organizations avoid or prevent a number of communication problems. It also represents what I have learned about communications in over 37 years of communicating in a business context. I am still learning. One of the key elements in communication is listening. Leaders must constantly practice their listening skills because listening is at least one half of "communication". - JDC

The following is a guide for communicating in small businesses, often where family may be present and active.  This is not meant to cover all communication issues but to provide guidelines and practical tools with which to improve communications in your business. Effective communications is something you have to work at to achieve.  Everyone in the business must be willing to work at it in order to make communication effective.  With practice it will improve.

Special considerations for family working in family owned businesses - Leadership requires working to improve communications.  Good communications are extremely critical in businesses where family members are functioning as employees.    The behavior and communication practices of owners and management set the tone for the organization, good communication practices by managers and family members will promote good communications and positively influence the rest of the organization.  Conversely, poor communications between family members or between managers will make communication less effective and will likely result in an organization with poor communications.

Family members should keep family and domestic issues separate from the business and business issues separate from family affairs.  When at work, family members should act and communicate like employees.  Leave discussions about work at work.  Likewise, family issues or domestic problems should be left at home or discussed after business hours. 

The majority of management problems are either caused by or are made more serious because of poor communications.    Businesses that work to improve communications will encounter fewer management problems or will be better able to handle them when they do arise.

Communication is a key activity of leadership.  A leader must promote good communications and identify and remove all obstacles to effective communication in the organization. Communication must be effective in order to get the right information to the right people, at the right time, and at the lowest reasonable cost.  Anything that prevents effective communication should be corrected or removed or the business will become less effective, less viable, and ultimately less profitable.

Lines of Communication in a Functional Organization - An organization with an identified chain of command with clear lines of communication and authorities is a functional organization.  Everyone in an organization reports to someone and an employee can have only one boss. Communication generally follows the chain of command.  The Owner or President communicates to his or her Managers. The Managers communicate to their assigned Supervisors. The Supervisor communicates to her or his assigned employees.  The supervisor is the main communicator to his or her subordinates and represents the company to the employee. 

Having multiple supervisors creates confusion for the employee and results in poor communications and inefficiencies for the organization.  Having a functional organization based on the needs of the business, with clear lines of authority and communication, is essential for good business communications.  Violation of functional authority and communications will lead to a variety of communication problems and inefficiencies.  One supervisor should not tell another supervisor’s subordinates what to do. This violates the concept of functional organization and also creates confusion.   Likewise, an owner or family member should not give a directive to an employee who reports to another supervisor.  This discredits or reduces the effectiveness of the supervisor and demonstrates that the owner is not following the properly identified lines of authority and communication.

Also, employees don’t have to like each other in order to work together or to communicate effectively.  Negative feelings should be managed such that they do not impact work or communications.  Almost every position in a business must communicate with another employee during the normal course of the workday.   Even though two employees may not appreciate each other, they must not let these feelings get in the way of effective communications or workflow.

Meetings promote effective and efficient communications especially if they are brief, planned (have an agenda), held on a regular basis, and are to the point.  Meetings provide a regular forum for planning, for the exchange of information, for problem identification, for problem solving, and for monitoring activities and projects.  Projects can be prioritized and assigned to individuals with deadlines, which establishes accountability for achieving results.  Leaders, especially owners, should establish a meeting schedule and structure to meet the informational needs of the business.  Written reports can be shared to inform participants and to keep the meetings short. 

Owners and management can best keep informed about what is going on by receiving informative reports and by participating in meetings rather than by informally obtaining information from employees.  Often this information should be shared with others with a need to know.  Randomly “jumping an employee” for an answer can disrupt the employee’s work and can also violate the concept of functional organization if the person seeking information is not the employee’s supervisor.   If the inquiry is done unprofessionally, it can also be construed as bad manners.  Priorities for work should be established by the supervisor not the owner.  Owners should generally limit this kind of behavior.

Written Communications are usually perceived to be more objective than verbal communications. Something in writing doesn’t go away.  Written communications should be used to document and communicate important messages like: position assignments, memos, policies, procedures, guides, operational manuals, position descriptions, tables of organization, summaries of personnel actions, employee manuals, training outlines, etc. Update and evolve written documents to meet your informational needs. Short reports are good ways of getting the information you need to run the business to the right people so that they can use the information to make informed and timely decisions.

Emotion can cloud a messageCommunication is a two way street.  Every message has a sender and a receiver.  For the communication to be effective each party must be on the same page or each should be open to giving and receiving a clear and understandable message.  A straight forward message should be clear, to the point, and should be delivered without excessive emotion, especially negative emotion.  Negative emotion can cloud even the clearest message.  If you are too “angry or worked up” to deliver a clear or unemotional message, wait until you are cool and calm to deliver it.  Keep emotions in check – Maintaining an even, cordial tone when communicating encourages listening and comprehension.  Even when the situation calls for the delivery of a negative message, such as a reprimand, avoid shouting or other menacing behavior because that will usually thrust the receiver into a defensive or flight mode – i.e., feeling threatened, the receiver will focus on finding a way out of the uncomfortable situation and he or she will not be intently listening to the message.

Listen carefully Both parties involved in communication, senders and receivers, need to pay attention to what the other is saying to avoid misinterpretation or lost information.  Be sensitive to cues that the other party does not really understand.  Simple replies such as “I guess I know what you want”, “okay” and head nodding may be rote responses coming from someone who is actually disengaged from the communication and thinking about something else.  Again, it is important to confirm understanding, especially in instances when conveying critical or more complex information or directives.  

Mutual Respect As related earlier, owners, management, and family in the business help set the behavioral and communication tones for the business.  Their behavior sets the business’ standard for work pace, business practices, compliance to policies, and especially how employees interact and communicate with each other.  MUTUAL RESPECT must be encouraged and practiced between all employees and especially family members.  Family members and managers must set a positive tone for communications in the organization by exhibiting mutual respect for each other and for other employees.  Communication reflects this respect and behavior.  Owners should expect their employees to mutually respect each other.  To not do so, will negatively impact communications in the workplace.  Each person may have a different view point but each should respect the view point of others. 

Get off to a good start with new employees -  Make sure your trainers, supervisors, and business office staff are positive influences and good communicators.  They must take the time necessary to orient new employees so that they get off to a good and positive start. This is important for understanding organizational policies, work rules, benefits, job expectations, office procedures, field procedures, work processes, safety policies and procedures, work flow, etc.    These individuals set the tone for the organization.  If a new employee gets off to a good, positive and productive start and the employee feels welcomed, it benefits the entire organization.    Good positive starts also help prevent excessive turnover.

Distractions can prevent or limit effective communications – When conducting an employee evaluation or a disciplinary counseling session, hold the session in a quiet place and prevent distractions.  Interruptions during important and sensitive discussions can have a negative impact. At the very least a distraction such as a phone call during such a session tells the employee that they are not as important as the phone call.

Decision making and communicating decisions - Decisions should be made at the level where the corresponding authority to make such decisions has been delegated by ownership and management.  All decision makers are accountable for their decisions. Even the President or CEO has to report to ownership or the board.   The only person who has the organizational responsibility to review or “second guess” decisions is the decision maker’s direct supervisor.  While others in the organization may have an opinion about a decision, publicly criticizing decisions of others is inappropriate behavior.   If you believe that a decision should be reviewed, take it up through the chain of command.

When extremely important decisions or those that affect the entire organization need to be made, such as a plant closing, they should be made for business reasons and within the proper chain of command.  If the decision involved the input of a group of decision makers, the final decision should be delivered by the group as a group decision without dissention or second guessing by those who participated in the decision. 

Collective Ownership – When there are multiple owners, it is important to exhibit a unified front when making and communicating important business decisions.   Generally all owners (or family members involved in management) should participate in making significant decisions, such as a plant closing or an acquisition.  Owners (and family members) should use the collective “we” when making related announcements about the decision. Use a phrase such as, “We have decided to build a new facility or we have decided to close the downtown location”. It is important to do this to demonstrate that all owners are in agreement on these important matters.  Once the family makes the decision, the entire family owns it.  Even if you didn’t completely agree with the decision you now own it and must support it.  Don’t undermine family members by second guessing.

Family Councils - Periodically it is good for a family in business to get together to have “family only” discussions about the “business of the business” or to plan for the future of the business.  This could be in the context of regular Corporate Meetings of Ownership, periodic planning meetings to set and measure business direction and goals, or just a session to inform or iron out differences.

Praise in public – criticize in private.  This is a good communication practice for managers and especially for family.  Praising in public is a motivator for employees as it acknowledges achievement. Criticizing in public sets a negative tone, can embarrass the employee, and can create barriers to effective communications. In the case where a supervisor is wrong, it can create the perception that the supervisor is rash, judgmental, and unreasonable. If warranted, criticizing an employee should be done in private and in a constructive manner to be effective. Generally, the employee must be offered a chance to improve their behavior. Another supervisor can be present during the counseling session for documentation purposes, but a supervisor should not criticize an employee or family member in front of his or her peers.  Beyond following this simple rule, remember to stay focused on the intended message.

Family members criticizing each other in public can create the impression that the family is not getting along and may not be unified.  If the discussion was not about work, it is even worse because it brings family problems to the workplace.  Such discussions are a distraction to other employees, can make them anxious, can render the family members less effective, and generally just don’t belong in the workplace.  Family members must remember that when they are at work they are first and foremost an Employee and not an Owner or a member of the owner’s Family.  Effective communications are expected from all employees and especially from employees who are family members.

Disagreements or Conflict Resolution – Families and businesses must have a way for individuals to work out conflicts or disagreements in a positive manner or at least without any lingering ill will.  Good communications must be practiced often and encouraged whenever possible.  Disagreements and conflict will occur from time to time and must be resolved quickly before they are allowed to fester or disrupt the organization. Consider the following to do so:

Formal Grievance or Conflict Resolution Policy - Taking conflicts up the chain of command until they are resolved or reach an authority figure who issues a final and binding decision is an effective way to resolve disagreements. This allows everyone involved with the situation to have their say.  A decision can be rendered to provide a final solution to the disagreement by an authority figure in the organization. 

Grandpa Klosner’s 75/75 Rule - My grandfather who lived to be 103 years young, believed that if two individuals each gave in 75% of the time on disagreements they could get along. When he was sharing this with me, I pointed out that this was not mathematically possible. He then grinned and offered the observation that I didn’t understand this concept because I was not yet married.  His point: you don’t have to win every battle.  If the decision or agreement will not negatively impact the organization or violate a law or work rule, then “go along to get along.”  Try for win/win outcomes if at all possible or at least those where there is no real loser.

If necessary use someone outside of the organization, who the two parties trust, to mediate a resolution to a significant disagreement.

Whenever disagreements between family members happen and can’t be resolved at the organizational level where they occur, the parties should spend time away from the business to work out their differences and to improve communications and their relationship.

Communications with Customers - If an owner or manager communicates poorly with customers then it is very likely that her/his employees will do the same or at least assume that good customer communications or good customer service is not important.  Poor customer service or serious problems with customer communications will kill a business. Train your employees on how to acknowledge and address customers.  Train them about how to answer common customer questions and issues.  Have good written fact sheets, pricelists, and other written material available to inform and educate your customers in a uniform way.  An effective web site can be used to inform and standardize communications with your customers.  The website can also allow your customers to communicate with you at a time that is convenient to them.  However, if you use your website to communicate with customers you must provide timely responses to their inquiries and orders.

Use “Thank You” frequently to demonstrate your appreciation to your employees, fellow workers, customers, and vendors.   Everyone likes to know that they are appreciated.

Ensure that your phone or answering system is customer friendly.  Ideally you phones should be answered by a friendly and informed person.  Your first contact with customers is usually on the phone.  You only get one chance at a first impression, make it a good one!  Use scripts if necessary to properly train your primary phone answerers.  If you use a phone answering system, make sure that the questions that direct the caller are thoughtfully done so that it doesn’t take a rocket scientist to get through to an appropriate company resource.  Ask the primary phone answerer to always “SMILE” when they pick up the phone.  The smile usually transfers into a warm reception or greeting for the person calling. 

The frequent use of “you and your” personalizes written and verbal communications to your customers and those you want to influence.  It reinforces the impression that you are interested in them and helps build your relationship.  Don’t overuse it, but think of the frequent use of You as “Vitamin U”, when communicating with your customers and attempting to grow your business. 

Implied Communications

Choosing not to act is an action - Employees respect leaders that are decisive and don’t procrastinate.  To hold off on making a decision, especially one that is obvious or is expected, sends a message to employees that the decision maker is indecisive, doesn’t care, or is afraid of making decisions.   If an obvious decision must be delayed, share when it will be made to keep your employees informed. 

 How a supervisor communicates or what he or she says (or does not say) can imply favoritism. Favoritism (real or perceived) is the impression that an employee is favored in decisions or that discipline or corrective action is selectively or unevenly administered by being used on some but not on others. Some employees may imply that they are in the “know” or that ownership or management shares information with them that is not shared with others.  Occasionally employees may imply that they are in the know but are not.  Some may misuse authority or are not willing to share it or share it selectively. Other supervisors may develop a clique and form a “controlling faction” within an organization.  This implies that to be successful you must belong to this sub-group.  Such employees are troublemakers.  These examples feed favoritism and must be avoided. Favoritism real or perceived must be prevented as it can discourage good behavior by otherwise productive employees or drive good employees away.  Favoritism will kill positive morale.

Be direct when communicating.  Use terms that you know are familiar to the other party. Resist any temptation to embellish or “craft” the message in a way that may obscure the main idea being communicated.

Situational Leadership and Communication Styles – An effective manager must be able to use all management and communication styles effectively based on the needs of the situation and the people being managed. Review the Operating Procedure on Effective Leadership which describes various management and communications styles. 

Employees who are good communicators, positive influences, and excellent teachers usually make good Supervisors and Managers.  These skills directly translate to building and maintaining quality relationships, developing subordinates, fostering good morale, and communicating effectively.   These employees are valuable for creating a positive corporate culture where everyone feels they are important and informed.

Confirm understanding.  To ensure everyone is ‘on the same page’, have the subordinate repeat back a directive or key information.  This ensures the receiver fully understands the message and gives the sender the opportunity to correct a misinterpretation or fill in a missing piece of information. When giving/receiving instructions or directives using e-mail messages, always ask for/send a reply message that acknowledges receipt and understanding of the message.  Written memoranda that direct someone to do something should also be followed up with confirmation of receipt and understanding.

Mixed Messages - Beware of sending mixed messages.  Including both praise and criticism in the same message will dilute or negate the intended effect.  To do so will likely confuse the recipient about your true message.

Confidential or Sensitive Information - Employees handling confidential or sensitive information should be required to prevent unauthorized disclosure of that information.  Documents and paperwork containing sensitive information should be marked
C O N F I D E N T I A L or PRIVATE and stored in a secure place or under lock and key.  Electronic files and folders containing sensitive information shall be stored in network locations with access restricted to a need to know basis and password protected.   

Material containing sensitive information must not be removed or transmitted electronically from the office without executive management’s approval. When it is necessary to take such material out of the office, it must be authorized by executive management and shall be protected in the same manner as described above.  These restrictions also apply to storing of electronic files containing sensitive information in laptop computers. 

When working with sensitive documents and files, these materials should be shielded from view by unauthorized individuals and the files closed/stored when you are away from your work area.

Personal financial information - To prevent problems with confidentiality, it is also a good idea to keep personal financial affairs separate from your business’ financial affairs. Sharing personal financial information with employees places a burden on them regarding maintaining the confidentiality of it. If you need help with personal financial affairs from an employee, first ask if they are comfortable working with this information. If they are, then ask that they take extra measures to keep the data private.

Learn to say you are sorrySometimes misunderstandings or disagreements real or imagined occur.  Emotional baggage such as resentment, distrust, guilt, etc. can cloud communications and interactions for a long time.  These burdens can get very heavy over time, especially if the hurt feelings were significant. Learn to say “I’m sorry that you feel that way or I’m sorry that your feelings are hurt or I’m sorry that I hurt your feelings.” It will help clear the air, help repair the hurt, and allow effective communications to resume. 

DISCOURAGE BEHAVIOR THAT NEGATIVELY IMPACTS COMMUNICATIONS - Negative or poor behavior and language can result in poor communications, unnecessary disruptions to communications, or even reduce the public image of your company in the community.   These must be discouraged in your business:

·   Avoid the use of emotionally charged communications or phrases such as, “I am Collins Construction” –The use of this phrase or anything similar discredits everyone else in the organization (Unless your name is Collins and you are the sole owner).  Other family members and owners who are employed in the business might be hurt by such comments.  Comments like this also look poorly to employees and others outside the organization.

·  Avoid the frequent use of extremely negative comments, as these can set a negative tone for the organization.  At the very least it implies that the sender is a negative or unhappy person.

·  Avoid publicly second guessing the decisions of others, especially family members.

·  Avoid public criticism of employees by family members or other employees. OR Public criticism of family members by other family members or employees.

·  Avoid purposely misrepresenting or miscommunicating private discussions or decisions.

·  Discourage one employee from disrespecting or harassing another.

·  Avoid discussing confidential information with others who do not or should not have access to it.

·  Discourage behavior from employees who vary between passive and aggressive behavior when communicating.  This behavior isolates the “communicator” and will discourage employees from interacting and communicating with them.  Being non-communicative, ignoring attempts at communication, or off-putting (passive) and being nasty, unkind, blunt, or difficult (aggressive) when communicating are examples of this. A person who does this is trying to be in control.  This behavior can indicate that the individual has poor communications skills or is insecure in their position.    Anyone who actively practices this behavior would make a poor trainer, supervisor, or lead.  This kind of behavior discourages teamwork and smacks of favoritism if it is selectively practiced.  That is, if it is used on some and not on others (favorites).

·  Avoid gossiping or lying, especially to initiate a disagreement between others.

· Strive to use accurate information in reports in order to increase their value.  Short cuts in gathering or the use of inaccurate information, especially if observed by employees, sets a tone that you have low standards with regard for accuracy, and that it is not important.  


·  Family members and senior management set the tone for communications in an organization through their behavior and communication styles.  Therefore they should encourage and use good communication practices. 

·  Family members working in a business face a number of unique communications challenges because they are both employees and family members.  They can best solve this challenge by first being employees at work and secondly being family outside of work.  By separating these two roles, they have a better chance to do justice to both. 

·  A functional organizational structure promotes good communications as it establishes lines of authority and communication.  Effective managers understand and use a variety of communications styles.

·  To encourage good communications, leadership must identify and remove barriers to effective communications throughout the organization.  Supervisors must learn and practice supervisory skills in order to be effective and to advance communications within the organization.

·  Information theory is, “Getting the right information, to the right people, at the right time, and at the lowest possible cost.”  Anything that would prevent decision makers in your organization from getting the information they need to do their jobs should be corrected or eliminated.  

·  Your communications extend beyond your immediate organization and into the community through relationships with customers, subcontractors, vendors, other contractors, business professionals, governmental agencies, regulators, and others.   Improving your communications will improve your relationships with these entities and help grow your business.

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