As a Founder with ambitions to scale your business and perhaps become CEO, it is hard to overstate the importance of effective communication on that journey.
You will have had a small team in the early days who could turn their hand to almost anything. As you worked on finding the product-market fit, communication just worked. You knew each other well and, in some cases, nearly felt that you could communicate by osmosis with that small, well-knit team.
As the business proves its validity, attracts investment, and grows the team, it needs to become more structured, and the need for a CEO becomes real.
Often, one of the Founders needs to upskill and step into the role of CEO for growth and scale. Alternatively, the business can consider hiring a qualified CEO to guide the growth, enabling the founders to take an executive role aligned with their technical expertise.
If you choose to take on the role of CEO, with backing from your team and investors, with all the things you have to think about, communication is often one of those things taken for granted.
The team is the number one asset any business has. Investors put their money and faith behind you and your team, but no team will perform to their potential without effective communication.
Here are a few thoughts on why it's important and how you can improve the effectiveness of your communication.
Why Is Communication Important?
There are many different audiences you will need to address as CEO. While each tends to require a different approach, their impact and importance to your business are no less critical.
The different stakeholder groups that make up a successful business—your team, your customers, your board, investors, suppliers, and support agencies—all have a part to play. They may all need slightly different communication approaches; however, what's critical is that they understand your vision and their role in the company and that you engage with them regularly.
So clear communication, generally from one source, the business leader, is crucial to keep everyone on track toward that ultimate goal.
Company Culture
A company's culture is vital to its success. However, it's hard for people, especially from the various stakeholder groups, to align with that culture if they don't know what it is. Communication is a critical element of a good culture.
As the CEO, you are responsible for setting the tone of the business through your communication. Together with your team in line with the values you've agreed upon, it should be clear what it means to be part of the business, what it stands for and what good looks like.
It is crucial that you not only understand the culture but also embody it. It is important to remember that so much communication is nonverbal; it's as much, if not more, about your actions as your words.
Staff Engagement and Collaboration
Listening is an essential part of communication, but it is often forgotten.
As a leader, you can't know and fully comprehend every aspect of your business. No business thrives without input from its staff, so being a good communicator is a two-way process. It isn't just about proactively communicating; you need to establish a process where staff can give feedback at the time and retrospectively.
So, a large part of your role communicating as a leader is to set the vision and direction of travel and then find a way to remove the obstacles to achieving this. You can only do this by listening.
Without a feedback loop, any communication you deliver to your team will likely miss the mark and turn them off rather than improve engagement.
Strategic Goals
Staff in failing organisations often report needing more guidance or direction.
A critical element of leadership communication is ensuring everyone, including all the stakeholders linked to your business, knows the company's key objectives and how their role aligns with them.
Good leaders ensure everyone knows they have a part to play and precisely how it relates to that North Star Metric.
Builds Trust
One of the benefits of excellent communication from good leaders is the trust it establishes. Your staff and other stakeholders will respect and follow someone who is transparent and honest.
If they trust their leader, they will go the extra mile and feel greater ownership over their work.
The impact of bad communication
We know the benefits of good communication, but what is the potential impact of poor communication?
Some insight from Gallup suggests that disengaged employees cost the UK £52-70 billion per year in lost productivity, one of the worst in Western Europe. Those disengaged employees are 2.3 times more likely to take a sick day and are at increased risk of leaving your company.
Another study highlighted that 33% of employees said a lack of open and honest communication significantly impacted employee morale.
Most importantly, however, is that 52% of employees said poor communication leads to higher stress levels.
The financial impact on a business is evident, but the effect that poor communication could have on your team's mental health is more troubling.
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What does good look like?
There is no ''one size fits all'' when it comes to communication.
A crucial element is the audience you are addressing. For instance, you will start to understand what works best with your team and how not to present ideas to your board.
You certainly won't get it right the first time or every time, but you will start to understand what works and what doesn't and build on this learning.
Here are a few common themes that work best for some successful communicators.
Be honest
Honesty and transparency are essential. Trust is earned, and employees, investors, and your board will all follow a leader they can trust. But you will quickly erode that trust if they feel you are holding back or being less than open with them.
There will always be occasions when you can't share certain sensitive information, but an open, honest style is always the best policy, even when it is challenging.
Also, a little vulnerability can go a long way in building trust. You don't know everything at this stage, but you hopefully realise you never will, so asking for support when you need it and leaning on the experts you bring in can foster trust and respect.
Clarity is Crucial
44% of employees surveyed by the Economist said they failed to complete a project because of poor communication.
As a leader, you and your leadership team are responsible for setting the company's direction and ensuring the rest of the business knows what that is so it can be easily communicated to their staff.
Communicating that vision and direction needs to happen in a fashion your audience can relate to. Drowning your employees in a barrage of stats and figures might not hit the mark. However, you will likely lose their support if you don't have the insight to back up your vision when you pitch to investors.
Listen, don't tell
Inclusive leadership inspires innovation, welcomes feedback and thrives on debate.
As mentioned, communication is always a two-way street. While you are setting the direction and the agenda, it is vital that you have an open communication style and that you listen to your audience.
By listening to and engaging your team, you are showing strength as a leader. If you are confident in the direction and comfortable with your position, you should feel relaxed about discussing any issues and welcome hearing them.
You are not trying to change their minds but to understand their point of view. This will help you establish a personal relationship with your team and appreciate and consider their position.
Understand your impact
As a Founder, you were known well and felt like part of the team. You didn't need to overthink your communication, and certainly not its impact.
As you move into the CEO role and your team grows, the impact of what you say and how you say it becomes more significant, which most Founders who move to the CEO role find quite unnerving at first.
For instance, while your CTO is on holiday, you may have asked what you thought was an innocent question of an engineer as you try to understand something ahead of a customer meeting.
However, when the CTO returns from holiday, they discover they've lost three engineering days as the engineer you spoke to thought you made a direct request and reassigned his colleague's efforts to get you the answers to your problem.
We know it's frustrating, and we also know that you can't quite believe you've had this impact. As the CEO of the business, you need to understand that people react to what you say.
You're no longer one of the gang!
You're the person everyone looks to for a clear sense of direction. You're also the person who has a significant impact on the lives of your team, including their job satisfaction, salary, and, therefore, their family.
They want to follow you, be successful, and help the business thrive. However, they need you to be considerate and deliberate in your communications and reflective of your conversations and impact.
Communication is vital to success.
When leaders look at their own, or their team's personal development, the importance of effective communication is often dismissed in favour of more tangible skills. It is often taken for granted.
But getting it right is a challenge. It can and will have a profound impact on your business, both financially and for your team's confidence to act, engagement level, and overall wellbeing.
So spend some time honestly assessing your communication skills, challenge yourself to take on a few of the lessons, and who knows, you might find the difference you are looking for.
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