Communication is the lifeblood of an organization. It influences company culture as well as bottom-line results. While no one would debate the importance of effective communication, very few companies truly prioritize it and commit to enhancing communication across the organization.

So, why is effective communication in business important? The following reasons should get you fired about up improving business communication in the new year.

1. Strengthens Relationships

Effective communication between employees is essential for building and maintaining strong relationships at work. Strong working relationships provide the foundation from which your business can grow and have been proven to drive better performance and business outcomes.

The National Transportation Safety Board found that 73 percent of the incidents in its database occurred on a crew’s first day of flying together before they had the chance to get acquainted and learn how best to work together.

Additionally, a NASA study found that fatigued crews who had a history of working together made about half as many errors as crews that were made up of rested pilots who had not flown together before.

2. Boosts Employee Engagement

When companies set out to improve employee engagement numbers, the biggest impact they can make is by evaluating their communication strategy.

Consider these questions:

  • Do employees receive clear instructions on what is expected of them?
  • Do they get constructive feedback from management?
  • Are employee’s voices heard?
  • Are employees aligned with the company goals and vision?
  • Do employees know how they contribute to company success?

Could you give a ‘yes’ to all of them? If not, it’s time to take a closer look at how often leadership and management communicate with staff and what messages they send. While there are multiple layers to cultivating highly engaged employees, effective communication will make a huge impact.

3. Builds Trust

effective communicationTrust is a foundational building block of relationships, both professional and personal. When employees trust each other and leadership, they are more invested in seeing the company succeed and work harder to their achieve goals.

Without effective communication skills among leaders and management, it can be quite difficult to build trust. Transparent communication is key, as is continual development of communication skills.

Learn more: Building Trust Through Communication and Inspiring Loyalty as Well as Leading Effectively

4. Facilitates Innovation

Whether teams are in the same room or dispersed across the globe, good communication skills are crucial. Employees must feel comfortable openly sharing ideas, working through options together and challenging each other. When brainstorming devolves into tense arguments, there is no way for teams to effectively innovate.

5. Drives Productivity

Research by Watson Wyatt found that companies who communicate effectively had a 47 percent higher return to shareholders over a five-year period. Leaders can inspire employees to do great work through open, honest, and transparent communication that validates all the effort employees put in. While there are many factors that influence productivity, such as processes, technology, and org structure, communication forms the foundation.

Up Next: 4 Ways to Improve Team Communication for Business Success

ABOUT Kristen Wells

Kristen is the senior manager of corporate communications at PTC and editor of Field Service Digital. She is passionate about elevating the stories of women in field service and improving communication between the field and the office. Prior to ServiceMax, Kristen held content marketing roles at startups such as Zinc and cielo24. Kristen holds a B.A. in Communication with an emphasis on Professional Writing from the University of California, Santa Barbara.