Costly conversations: How lack of communication is costing organizations thousands in revenue

A new survey by Provo-based Crucial Learning, a publisher of courses in communication, performance and leadership, shows that conversation failures in the workplace are both rampant and costly.

How costly? Forty-three percent of respondents estimate they waste two weeks or more ruminating about an unresolved problem at work. And one in three employees estimate their inability to speak up in a crucial moment has cost their organization at least $25,000.

In addition to the price tag on conversation failures, the December study of 1,100 people by Crucial Learning found that employees are resorting to silence in alarming moments. Participants said the costliest conversation they avoid is when someone shows disrespect for another in the workplace — a conversation that didn’t even rank among the costliest conversations in a similar survey conducted in 2016. While this shift may indicate more awareness of workplace inequality, it also shows awareness doesn’t lead to action, study authors said. Even when people observe harmful disrespect, they fail to speak up.

According to the study, 29 percent more participants said their workplace cultures were more supportive of people speaking up now than they were in 2016. And yet instead of speaking up, they resort to a host of harmful, resource-sapping behaviors, including complaining to others (77 percent), doing extra or unnecessary work (63 percent), ruminating about the problem (57 percent) and getting angry (49 percent).

As a result, 43 percent of respondents say their silence has cost the organization more than $10,000, while 30 percent tabbed the amount at more than $25,000 and 19 percent admitted their reluctance cost at least $50,000.

The top five conversations people avoid include when someone is not pulling his or her weight (68 percent), when someone performs below expectations (66 percent), when someone shows disrespect towards another in the workplace (57 percent — also identified as the No. 1 most costly conversation), when someone doesn’t follow proper processes or protocol (53 percent) and when there is confusion on who owns a decision (53 percent).

In addition to the dollar costs, respondents reported secondary costs such as damaging effects to employee morale, relationships, corporate culture and project timelines and budgets.

Joseph Grenny, coauthor of the third edition of Crucial Conversations, said the pandemic and its revolutionary effects have amplified the importance of effective communication. Less than half (45 percent) of respondents say they or others are moderately skilled at holding these work-related crucial conversations and only 9 percent say they are very or extremely skilled at holding them.

As employee anxieties have grown and led to the Great Resignation and extreme burnout, organizations must invest in their employees’ interpersonal skills to build strong relationships and secure bottom-line results, Grenny said.

“One of the costliest barriers to organizational performance is unresolved crucial conversations,” according to Grenny. “If you can’t communicate with your leaders and colleagues, you can’t develop the relationships that are necessary to combat the hard times we’re seeing today. The ability to engage in dialogue is key to successfully leading through and beyond the pandemic.”