Calculating the High Cost of Poor Communication

Business presentations and meetings exist for one reason: to move business forward.

And they ought to do that effectively and efficiently. But do they?

As it turns out, in far too many cases, no.

Backstory
Some time ago, I delivered a keynote address at a conference. The presentation focused on some of the ideas in our new book, The Orderly Conversation: Business Presentations Redefined.

The audience was made up of individual contributors, managers, and senior leaders. I asked them to think about that last business meeting or presentation that they had either led or participated in. Then I asked them, “Was it effective and efficient?”

Not a single person in that ballroom raised their hand. Not one.

The Cost in Numbers
After the conference, I started thinking about how much time, energy, and money are wasted every day, week, month, or year by ineffective and inefficient meetings and presentations. Then I started doing some math.

Using round numbers from Wikipedia (I know, I know…), the average household income in the US is $51,939. That’s roughly $1,000/week or $200/day. Assuming an 8-hour day, the average American is making $25/hour.

Had I only googled “average hourly rate,” I would have seen this site that says the US average hourly earnings is $24.53, so I guess my math is sound. Keep in mind this is the average of all workers across the country. I’m sure the average hourly rate for many of the people at the conference was considerably higher. But let’s stick with the average figure for the sake of this discussion.

Let’s assume that there were 8 people at a meeting you attended yesterday. The meeting lasted an hour and was led by Brad, one of your direct reports. Brad’s a great guy, but he came to the meeting unprepared. He wasn’t clear on what he wanted to accomplish. He rambled on and on, jumping from topic to topic. The other attendees were distracted and took the meeting off-topic at times. At one point, you stepped in to redirect the meeting back to Brad. It was a frustrating meeting and, unfortunately, typical.

Let’s assume that the meeting was important and that Brad’s goal could have been accomplished in 30 minutes had he been prepared and managed the process better. So that’s 30 minutes (or .5 hours) wasted, multiplied by 8 people at the average hourly rate.

.5 hours x 8 people x $25/hour = $100 wasted yesterday.

$100 wasted x 52 weeks = $5,200 wasted per year.

$5,200 wasted x 10 business units = $52,000 wasted per year. That’s equal to the average salary of one person.

Staggering, isn’t it?

The Cost of Diminished Trust and Goodwill
Now let’s look at it from a different angle. Yesterday’s meeting wasn’t unique. In fact, as you think about it, it’s status quo for Brad. You’re starting to notice that others are reluctant to attend Brad’s meetings. As a result of his inefficient meetings, he’s lost the goodwill of his colleagues, which is having a negative effect on his reputation.

Now, let’s say that Brad talks to you about how he’d like a promotion. In the new role, Brad would have to have the skills to set direction, communicate expectations, and manage a weekly status meeting with senior leadership. With his current skill set, you realize you can’t trust him to take on the new role.

Now what?
My colleagues and I believe that far too much time, energy, money, and goodwill are squandered through ineffective and inefficient business communication. It doesn’t have to be that way, though. People simply need to (a) understand the damage caused by poor communication, (b) rethink their current approach, and (c) get comfortable using a new set of tools.

Learn more by picking up a copy of The Orderly Conversation: Business Presentations Redefined or by calling us to set up a skill-building workshop for your employees.

I also encourage you to do your own math; I’ll bet the cost of training your employees will be less than maintaining the status quo.

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About the Author: Greg Owen-Boger

Greg Owen-Boger has been with Turpin Communication since 1995, first as a cameraman, then instructor, account manager, and now vice president. Schooled in management and the performing arts, Greg brings a diverse set of skills and experiences to the organization. Greg is one of Turpin’s facilitators and coaches and holds a Bates ExPI™ (Executive Presence Index) coaching certification. When he’s not with clients, he manages the day-to-day operations of the company. Greg is an active member of the Association for Talent Development (ATD) and was the 2015 President of ATD, Chicagoland Chapter. He is a popular speaker, frequent blogger, and the co-author of “The Orderly Conversation: Business Presentations Redefined,” “The Virtual Orderly Conversation,” and Effective SMEs: A Trainer’s Guide to Helping Subject Matter Experts Facilitate Learning,” all written with Turpin’s founder, Dale Ludwig.

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