- Business failure has more to do with communication than most people realize
- Pivoting communication to avert predictable obstacles is simpler than it seems
- Preventing missteps requires honest assessment of where communication is being ignored
Businesses fail all the time. In fact, nearly all businesses are in jeopardy of failing at virtually any time, because it only takes one mistake to head over the cliff. I believe that most of those failures or potential failing decisions can be connected back to communication problems. I’m not saying that all business failures are results of communication directly (though many are), I’m saying that every failure and mistake has a communication component at its core. There’s nothing humans have ever created that did not involve communication. Humans create failures, therefore, poor communication plays a role in every business’ failure.
When I talk with entrepreneurs or seasoned business leaders about their mistakes or failing businesses, it always comes back to communication in some way. However, they don’t always realize this, until I point it out. When I ask ‘why are you failing?’ or ‘did you fail?’ they usually reply that they didn’t pivot or pivot correctly, they point to flawed business models, poor hires, pricing or cost issues, poor timing, overspending, being out-competed, burnout and lack of revenue.
And at surface level, those are all legitimate reasons. But when you look below the surface, you realize there were communication challenges and/or missed communication opportunities along the way that may have prevented any of these failures. These failures all are related in some capacity to underdeveloped soft skills: communication. Developing communication skills and a supportive culture that embraces open communication is the most proactive way to avoid failing all together, and the best reactive way when a leader realizes they are starting to fail.
Let’s unpack this a little.
When looking at the list above, one might think, ‘how does a flawed business model relate to communication?’ It’s simple. Did you seek out feedback and talk it through it with experts in a range of areas? Were you open to feedback? Receiving feedback is the best way to find holes in a plan. We can’t always see issues when we are too close to an idea. We are often too stubborn to take feedback, or simply defensive, when others may not agree that our precious plan is 100% perfect. Feedback is a major component to competent communication and few people are able to accept it well.
What about overspending or poor timing? Both of those are research and problem solving issues. Research and problem solving skills are soft skills. They require us to critically think, study, collect data, read, interpret and brainstorm. These are all foundational communication skills. Many business leaders don’t take the time to take a deep dive into issues, potential problems, or existing problems when they first appear. They try to move as quickly as possible and make decisions without having all of the information, and this always leads to trouble.
When the proper and necessary research is done, a more informed decision can be made and a better plan and the right messaging will be created. Information gathering and creating a proper plan and messaging to activate change is all communication related. And as to anything related to lack of revenue or pricing, that’s all sales, which means it’s all persuasion and audience analysis. And yes, you guessed it, these too are communication skills.
Let’s think about a tangible (and nostalgic) example of a company that failed: Blockbuster. The company celebrated many years of success, but as we all know, a business model built around renting VHS tapes and DVDs was not sustainable as technology advanced. No matter how exciting it was to walk into a Blockbuster on a Saturday night in 1992 and have hundreds of movies to choose from, having thousands of options at our fingertips while sitting in our pajamas on our couches will win every single time.
When you research why Blockbuster failed, every article lists things like not embracing technological change, being risk averse, being unwilling to disrupt its business model, as well as having a corporate culture that didn’t support innovation. No matter how we look at this case study, communication is a key factor in all of these reasons. But Let’s just zero in on corporate culture for a moment.
Blockbuster’s culture was built around the idea that they were the undisputed king of video rental. That was true and they had a powerful reign, but like many rulers, their reign eventually ended when they became drunk with power and ignored the needs of who they were serving. Blockbuster’s culture was too rigid, and they didn’t create a space where employees were encouraged or felt safe to disrupt, ask questions, be creative, or speak up. There are multiple reports of several executive team members recognizing the problem early on, but not speaking up out of fear of backlash. Naturally, this type of communication culture makes the company more likely to break rather than bend. Remember, for a company to weather a storm, it has to be able to move with the storm rather than against it.
Their communication focused on the status quo and who they were rather than what they could be.
They got too comfortable, they didn’t take proactive measures to research shifts in technology, customer needs and desires, or opportunities to diversify and pivot. They missed not just one signal but many, somehow failing to see what was changing around them, as the rest of the world saw it as clearly as possible.
As companies like Redbox and Netflix entered the scene, Blockbuster began to lose momentum and profit dropped. By this point, they’d already lost because they didn’t adapt to the industry’s evolution, though they had every opportunity to bend, rather than break. There’s always risk involved in adapting your business model, but to survive, we have to change – or at least be willing to try. Competent communication skills are the best way to help a business take calculated risks with well-developed plans, because sticking one’s head in the sand – as Blockbuster did – absolutely guarantees failure.
We often ignore communication’s role in business practices because it is part of everything we do. Because it’s a constant, it’s easy for it to fall into the background and take a back burner when we are in constant reaction to mini or major crises. We take it entirely for granted, when it’s as foundational as paying the bills.
I believe that communication needs to not only be front and center during a crisis, but also front and center all day everyday.
Most leaders jump to process improvement rather than communication improvement when there is a threat, potential failure or loss of revenue. But instead, we should start with auditing a business’ communication before making any changes to your business processes. Often, the process didn’t work because it was not properly communicated to those who needed to hear it. Taking the time to analyze the problem and get feedback will determine if it’s a messaging issue or process issue.
Competent communication is the one thing that can help you be as proactive and adaptive as possible. Businesses that are not proactive are not able to pivot, adapt, or evolve. Proper communication is what stops a small hit from becoming a fatal one. Communication keeps organizations flexible in our ever-changing world.
It should also be noted that running a business is a relational activity. We often forget about how powerful creating and maintaining meaningful relationships are with the people who work for you and who you work with. Through those relationships we can build a supportive and innovative company culture, where teams can better forecast turbulence, feel safe to point out potential problems or actual errors and where feedback is given and accepted openly. This can’t be underestimated, because if you go to the trouble of hiring and empowering smart, skilled and thoughtful people, they need to be able to speak honestly in order to contribute to a company’s success.
Businesses around the world are in the middle of a massive reckoning, as people assert that they want and need more from their jobs than just a paycheck. People are realizing that they’re an organization’s greatest asset, and with that realization comes power.
By creating a company culture that cultivates competent communication, leaders have the power to create a space for employees to feel included in the solution. This meets employee needs, and in return, leaders are taking a proactive role in avoiding failure. It means creating a culture that embraces feedback and can pivot and evolve with ease, as the landscape shifts, needs change and as technology advances.
It’s important to remember that there’s no one size fits all solution to upgrading communication, but the same tools can be used in every situation. Communication is a vital component for innovation, and as we know, a lack of innovation results in failure. Therefore, failure is a result of poor communication, it’s as simple as that. Taking the time to develop your own and your people’s communication skills is the best way to avoid failure. So why do businesses fail? Their leaders take communication for granted.