Communication Breakdowns = Lost Revenue

Our recent survey of Leadership Report readers produced a bucket-load of content suggestions for future Reports. (Thanks to all who participated.) Several suggestions centered on using case studies to “help us get the kinds of measurable results you talk and write about.”

Today’s issue is in response to the requests for case studies received from the content survey. But before we launch into that, here is some background for readers who are joining us for the first time.

Most organizations have huge opportunities to improve business results by making sure their people have the right information at the right time to take the right actions that increase revenues and reduce costs.

Many organizational flaws are caused by communication breakdowns in the form of mixed messages (“My leader says one thing but my incentive pay encourages me to do something else.”), slow moving information that contributes to losing a sale and inaccurate and non-existent information, both of which can retard results.  Eliminating those breakdowns can kick performance up substantially.

Now, here’s a case study about multiple communication breakdowns that hurt a company’s performance and what happened to help it earn back their lost customers’ business.

CASE STUDY: HIGH-TECH COMPANY

The CEO of a high-tech engineering company was frustrated because on time delivery in one of his major operations was declining. Customers were shifting their business to competitors who could meet the customers’ delivery commitments. He asked us to help.

A two-day assessment uncovered the following:

  • Leaders were saddled with 15 key performance indicators (KPIs), hardly a number that would create focus or communicate priorities.
  • Sales people were slow getting order information to the production people. All too frequently the information was inaccurate.
  • Communication among parts inventory, assembly and shipping and receiving was egregiously slow.

Based on the information gathered and shared with the leaders, we took the following steps:

  1. Met for one day with the leadership team to reduce the 15 KPIs down to four that were related to improving safety, quality, service delivery and productivity.
  2. Helped an employee team representing all areas of the operation establish a disciplined and coordinated scoreboard and huddle process that focused on the four KPIs.
  3. Taught managers and supervisors how to conduct high performance huddles, manage the scoreboards, conduct root cause analysis and conduct problem solving exercises with their teams.
  4. Working with employees and the human resources department, we designed a recognition effort that celebrated teams and individuals when they hit specific performance goals.
  5. Eliminated root causes of the service delivery problem that was chasing customers away, then communicated our successes to customers who they had lost.

In less than four months, the on-time delivery increased from 70-95 percent. Quality improved 50 percent. Productivity went up 10 percent. Sales increased 30 percent as prior customers returned.

We also helped the company create a series of learning modules around this work so it could be replicated as needed in other operations in North America.

Key Takeaway:  The traditional communication approach tends to be activity-based. It focuses on formal channels such as banners, posters, newsletters, employee apps, email and town hall meetings. Our focus is results-based. It finds and eliminates the root causes of under-performance. The results are much more sustainable. Note that while traditional communication is focused first on activity, a much better approach focuses on the business goals first, then the communication barriers that drive the communication strategy which, if executed well, delivers improved business results.

 

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