Behind an organization’s success is a team that talks to each other—and not just about how their day has been or what they had for lunch. Robust internal communication means information moves seamlessly across teams and among individuals to resolve issues, fill gaps in workflows, and build camaraderie.
There are four main types of business communication based on how information flows, e.g., from C-suite executives to team members and everything in between. When optimized, effective business communication can improve employee engagement, productivity, and customer relationships.
Role of Business Communication in Successful Entrepreneurship
Business communication is defined as the flow of information within and outside an organization. It allows an organization to streamline its operations starting from its internal workflows down to customer service.
You can see it in action when an executive sends out a company-wide newsletter, a sales assistant resolves a client’s issue, or even in a team’s group chat. These occur naturally in any organization but you need to make a conscious effort to maximize their effectiveness.
Whether you’re a big or small business owner, a manager or a regular team member, you can benefit from optimizing your business communication in the following areas:
Employee Engagement
Beyond the level of satisfaction, employee engagement is also related to the meaning that employees find in the work they do. Communicating the organization’s core goals to employees and showing how they contribute to reaching those milestones improves engagement and performance by up to 10%.
Employee Productivity
According to a McKinsey Global Institute report, improved communication through social technologies can increase the productivity of high-skill knowledge employees (e.g. managers, sales representatives, lawyers, etc.) by 20%-25%. Especially with the increased adoption of remote work, online collaboration tools streamline workflows and give employees fast access to information. This way, they can get more work done in less time.
Customer Retention and Satisfaction
Effective business communication also improves client relations. As defined earlier, communication in business also occurs outside its core team, i.e., external communication with customers and the general public. A Gartner research has found that 60% of customers feel more connected to brands they trust. They tend to be more loyal to companies that are transparent in terms of changes, customer testimonials, and product offerings.
Customize Your Virtual Team Based on Your Needs
4 Main Types of Business Communication
Strategic business communication goes beyond sending out surveys for employee satisfaction or announcing birthdays. Organizations must now develop methods to engage their employees.
Below are the four main types of business communication and corresponding tips to optimize them:
1. Upward Communication
This type of communication refers to the flow of information from team members to top-level executives. This allows management to stay up-to-date on what’s happening on the ground. Consequently, managers can address the issues and needs of their employees before they escalate.
Upward communication includes situations such as:
- An HR specialist conducts a focus group with employees to discuss department-wide issues and sends reports to upper management as a reference for their decision-making.
- Annual employee surveys are disseminated to gauge satisfaction and make changes accordingly.
- Company executives allot time in a meeting for employees to provide feedback or suggestions.
PRO TIP: As the main driver for information sharing from employees to executives, managers can…
- Use accessible communication channels (e.g. Slack, Telegram, Trello) to encourage formal and informal interactions
- Create surveys, internal forums, or Q&A sessions to gather honest feedback
- Squeeze time for an open discussion and feedback sharing during meetings
- Allow employees to conduct performance reports of upper management alongside their employee performance reviews
2. Downward Communication
In contrast with the previous item, downward communication starts from upper management to the team members’ reports. Through this, company-specific instructions, standards, and policies can be disseminated effectively to the rest of the team.
Businesses also use downward communication to delegate tasks efficiently and inform employees of important updates (e.g. changes in their scope of responsibilities, revamped policies, product launches, etc.).
Examples of downward communication include:
- A company’s CEO conducts a meeting to discuss their performance from the previous year, new goals for the following year, and what steps to take.
- Upper management sends a company-wide newsletter to announce new sick leave policies.
- Managers conduct performance appraisals to give feedback and discuss areas of improvement.
PRO TIP: To maximize your downward communication, managers can consider the following…
- Use the appropriate style of communication when disseminating information. If the company is making major policy reforms, you can update the employee handbook to keep existing and new employees updated. When discussing job description changes, written communication via email or messaging apps might be ideal as it opens space for questions or clarifications.
- Be honest about how a particular change (e.g. two departments merging, adding ad hoc responsibilities, etc.) can be challenging to foster a healthy and trustworthy relationship with leadership.
3. Lateral Communication
Lateral business communication occurs among departments or employees in the same hierarchy or status across various departments. It’s also necessary for information to flow through same-level employees to reduce conflict and achieve common goals. Typically, employees communicate with each other in a more casual manner compared to the previous types, which often strengthens teamwork.
Lateral communication happens in situations such as:
- A marketing team conducts a meeting to brainstorm potential strategies for an upcoming campaign.
- Coworkers converse in the team chat to clarify the next meeting’s agenda.
- A business operations team member informs the engineering team that a client is having technical issues with their app.
PRO TIP: Employees and managers of the same hierarchical level can…
- Utilize project management tools (e.g. Asana, Basecamp, G Suite) for seamless interdepartmental communications.
- Communicate through phone calls or video chat to respond to an urgent concern or misunderstanding efficiently.
4. External Communication
Lastly, external business communication happens when internal information gets shared with entities outside the organization such as customers, partners, vendors, city offices, and the general public. As opposed to the previous items, this type of communication directly affects the business’ client relations and public perception. When done effectively, it can contribute to the overall growth of your business (i.e. increasing customer retention and satisfaction, attracting more stakeholders, etc.)
Here’s how external communication occurs:
- A company presents a sales proposal to potential investors.
- A marketing team sends out newsletters to its existing email list about an upcoming product launch.
- A company website has pages dedicated to its product offerings, client testimonials, and terms and services.
PRO TIP: For optimal results, businesses can…
- Do extensive research on their target audience to craft the most effective messaging.
- Create blog content that’s straightforward and offers value to readers regarding your business’ advocacy, products, and services.
- Hire remote workers to delegate customer-facing tasks. As an example, Magic Assistants are well-equipped to take on phone and chat support, quality management, and customer retention.
By utilizing each type of business communication, you can craft a strategy that will help you stay ahead of the competition and grow your business from the inside!
