6 reasons why communication is important for business

Raghunath Reddy, Executive Vice President and Head IT, UTI Mutual Fund, explains why effective communication is the cornerstone of any organisation. By Satyaki Sarkar

Raghunath Reddy has been working in the technology industry for two and a half decades, and during this time he has undertaken a variety of responsibilities including application development, database and network administration, software development, system administration, etc. At UTI Mutual Fund, Raghunath is responsible for creating the company’s technology vision. He leads all aspects of information technology deployment, handling IT infrastructure, information security, application development, monitoring, vendor alliance, and architecture.

Raghunath feels that when it comes to any kind of a professional environment, communication is one of the most important factors determining success. Whether it’s internal or external, good communication is an essential part of a leader’s repertoire. Here he tells us why business leaders would do well to hone this skill.

1. Develops and maintains relationships
“Relationships with peers, subordinates, superiors, etc are not only built but also maintained through regular positive interaction with others. Effective communication forms the strong base of your relationship. And regular communication helps maintain them. If effective communication is lacking, you will not be able to maintain close relationships or develop new ones. A leader that communicates well creates a team that performs well, in all departments of an organisation. Also when employees are able to converse efficiently with each other there are fewer misunderstandings. And even if misunderstandings are there, they will be resolved in an amicable manner. As a result employees are more productive.”

2. Fosters innovation
“In an organisational context, good communication certainly promotes innovation, as employees feel more comfortable openly communicating new ideas, which can lead to advancement and development. In addition, if the staff is unable to effectively express themselves, not only will they feel unsure about themselves and their work, they will not be able to add any value. As a result, work will suffer, innovation will cease, and person’s potential will be underutilised.”

3. Helps in team building
“Effective and engaging interactions among employees aids in building an efficient, productive team. Each and every team member must be able to communicate well with each other in order to work together. They need to be able to understand and communicate important factors like expectations, difficulties faced, and the means to solve them. Internal communication is key to a cohesive team. Additionally, good communication on the part of the leader tends to boost employee morale, as they gain confidence and motivation when their leader communicates clearly, frankly, and with purpose.”

4. You can manage your employees better
“It is extremely important for leaders to have good communication skills, as only then can they inspire their team with a strong vision and motivate them to reach the set goals. This skill also helps leaders have frank conversations with their employees, whether it’s about their responsibilities, issues faced, problem solving, etc. As an effective communicator a leader can give constructive feedback, understand an employee’s goals, help him/her achieve them and thereby build a personal relationship. This helps build a stronger, interconnected team.”

5. Promotes transparency
“Effective and regular communication, both internal and external, keeps the company transparent as employees are completely aware of all the workings and there are no hidden secrets and clauses that can be used against them. So they feel confident and have more trust in their leaders, and thereby their work. From a customer’s point of view, it is even more important, as a customer who feels that an organisation might not be claiming the truth will slowly lose faith in the company and its products. Effective, clear communication builds trust and goodwill among the organisation’s clients, customers, stakeholders, extended sales force, and so on. This is why transparency is key to a company’s success.”

6. Helps your company grow
“Lack of communication, within and outside the organisation, can lead to the collapse of any enterprise. Without proper marketing and clear communication, most organisations will struggle to survive. An improvement in service quality or deliverables can only happen through clear communication through which the organisation learns the needs and desires of its customers, as well as what it can do better to satisfy those needs. If the company interacts well with clients and promptly attends to their needs, then the customer-company relationship strengthens. This in turn leads to better business and therefore success.” 

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