By Antti Tenhiälä and Fabrizio Salvador
Informality has become ubiquitous in modern organizations: The use of first names for everyone, including executives, is the norm, as are casual dress, flattened hierarchies, and self-organization. Business communication has grown more informal as well. We keep things casual so we can be fast and flexible and get things done. We email, Skype, Slack, and Yammer.
Formal, protocol-guided communication — such as face-to-face meetings or teleconferences, where leaders from different business units use standard agendas to review concerns and coordinate responses — is increasingly seen as an old-fashioned bureaucratic time sink.
Informality helps an organization’s daily operations run more smoothly, to be sure. And unnecessary meetings that serve no real business purpose can plague a workplace. But no one would argue against the value of formal, reliable communication in, say, aviation or the military. In those mission-critical contexts, protocols for a communication’s timing, content, and participants ensure clarity, transparency, and accountability.
Prompted by those models, we decided to study companies that manufacture high-tech machinery — businesses that need precise, cross-functional communication to get the job done. Our data shows that overreliance on informal communication can harm performance because it is often imprecise and erratic, and that formal communication offers specific, crucial advantages that no company should overlook.
Over the course of two years, we studied 73 manufacturing sites encompassing 163 production processes for customized industrial machinery and instruments. We analyzed both ongoing informal communication (such as emails and phone calls) and periodic (typically weekly) cross-functional meetings with standard agendas and prespecified participants. On-time delivery — a critical performance dimension in this industry — was our primary measure of communication effectiveness.
The results showed that processes that used periodic protocol-guided meetings had a consistent performance advantage over those that relied solely on informal communication. Indeed, use of formal communication protocols improved the rate of on-time delivery by an average of 5 to 8 percentage points, representing substantial value for the companies we studied.
About the Research
This article is based on a two-year research project conducted at high-tech-machinery manufacturers in 18 countries across Europe, Asia, and North America. We analyzed formal and informal communications among managers from sales, product design, engineering, production, and procurement. The companies we studied produce industrial cranes, special purpose elevators, factory automation systems, weapons and fire control systems, and other high-tech machines and instruments. Operational communications in this industry often center on customer-initiated changes to order specifications and delivery dates, engineering modifications to product designs, resource availability issues in production, and the logistics of shipments from suppliers.
Our primary performance measure was on-time delivery rate. Secondary measures included the ability to promise delivery by customers’ initially requested dates and speed of order fulfillment. In comparing the influence of formal versus informal communication on these measures, we statistically controlled for other major influences on delivery performance, such as raw materials delays, internal quality issues, machine breakdowns, and delays caused by customers.
Overall, use of formal meeting protocols (rather than solely informal communications) to address product specification changes improved the rate of on-time delivery by, on average, 5 percentage points. When the communications were about customer-requested delivery-date adjustments, use of formal protocols improved on-time delivery by an average of 8 percentage points. The advantages of formal communication were statistically significant — and similar in magnitude between the primary and secondary performance measures.
Recognizing the Value of Formality
Only 45% of the organizations in our study relied on formal meeting protocols. The most widely used communication channel was email (used by 71% of the organizations). When we interviewed managers, they often said that they chose email primarily because it offered speed and flexibility — and that they opted against recurring meetings mainly because staff resisted them.
Informal channels are indeed speedier and more flexible than formal communication, and they can be useful when the matter at hand is truly novel or complex enough to merit a rapid back-and-forth discussion. But when you’re in the weeds of daily operations, tasks can seem more novel and complex than they actually are. Furthermore, if you opt for an informal exchange, you risk connecting with the wrong people (perhaps because the right people are not readily available), delivering or receiving inaccurate or incomplete messages, and getting distracted from the current interaction by competing priorities. As a result, reliance on informal communication often leads to delays, rework, contract penalties, costly expediting efforts, and disappointed customers.
For example, we observed that critical messages were sometimes held up or even forgotten because stakeholders did not immediately respond to one another’s ad hoc requests. In other cases, individuals sought guidance on decisions but — after their informal messages ricocheted around their organizations — moved forward on their own, having never received a clear yes or no or a proper assessment of downstream implications.
Formal modes of communication, in contrast, give all relevant stakeholders opportunities to air their concerns, as specified by a protocol. Establishing a protocol takes effort and necessitates overcoming the common assumption that formality means drudgery and inertia. But in settings where communication errors can be costly, formal protocols can be a rock of reliability because they:
- Allow people to connect with the right stakeholders at the right time.
- Standardize messages to ensure that they are complete, and provide standardized procedures for follow-up.
- Promote accountability for tasks, because responsibilities are explicitly transferred to specific people.
- Embed lessons from previous interactions and meetings to ensure that learning is cumulative.
The health care sector is learning this lesson. According to The Joint Commission, the largest medical services accreditation agency in the United States, up to 80% of serious medical errors stem from miscommunication between caregivers. Patient handoffs between intensive care units and operating rooms, for example, are essentially cross-functional meetings that demand precise exchanges of information. It’s not surprising that hospitals are making substantial efforts to improve communication in such instances, and standardized protocols have proved to be a particularly effective means of doing that. Leading health care providers, such as the University of Pennsylvania Health System, have developed stepwise protocols to standardize what these exchanges cover, which parties should be present, and who is responsible for transmitted information.
Designing Communication Protocols
It is not necessary to set up formal protocols for communication regarding infrequent events. Informal channels are just fine for that purpose. For example, if a member of a procurement team must contact a marketing expert — an interaction we seldom observed in our research — it makes sense to use an enterprise social network platform to identify and connect with an appropriate person. To establish a protocol for that rare type of communication would be a waste of time.
However, formal communication is especially effective for common events. For instance, if the procurement team learns that a shipment from a supplier will be delayed — an event we observed frequently in our research — a formal communication protocol ensures that accurate information about the situation reaches the right production planners and sales reps. The planners must then speed up other orders (so that the orders affected by the shipment delay can be executed later), and the sales reps must contact customers.
When events are sufficiently frequent, the organization learns who should be contacted under what circumstances — lessons that a protocol can codify. The organization also identifies which errors and which types of miscommunication are most common, and a well-designed protocol can address those sticking points.
But why make a protocol for something that is already done repetitively? Again, a useful lesson comes from health care — specifically, from University of Iowa Hospitals and Clinics. A new cross-departmental communication protocol that standardized patient handoffs between emergency departments and operating rooms improved the quality of care while radically reducing lead times. “There are some things that you never think to plan for, especially things that you do every day,” concludes the team of physicians behind the new protocol. “They may seem too trivial or common to really organize, and afterward you often think that it could have gone better.”
Afterthoughts like that are invaluable input for the development of communication protocols. And such protocols ideally should be created jointly by people who collaborate regularly. When individuals develop communication habits on their own, their assumptions about best practices often do not align with those of their colleagues, and that can lead to frustrating situations fraught with competing expectations and unsynchronized efforts.
Getting people to develop and commit to a formal communication protocol is a considerable challenge. After all, most people prefer to craft messages in their own words and send them to whomever they regard as relevant at whatever time they choose.
Addressing the negative perceptions of formality is therefore crucial for motivating people to implement change. In some organizations, it may be effective to offer examples from military or health care settings, where formal communication is generally accepted as the proper mode of sharing information. An option with documented success in a broader range of organizational settings is agile management methodology. Agile has come a long way from its software development origins, with contemporary implementations ranging from banking to boardrooms. Although the approach emphasizes self-organization, at its core is a strict communication protocol for team meetings called “scrums.”
The scrum format is always the same (with most colocated teams standing up instead of sitting down). The participants and timing constraints (when, how long, how often) are prespecified, and the agenda is limited to three questions: What has everyone done since the previous meeting? What will they do next? What is everyone’s most pressing challenge? The scrum format may not be the perfect formal communication protocol for every organization, but it has the potential to appeal to people who bristle at anything that seems old-fashioned and bureaucratic.
A common argument against formality is that even frequent events have their own particularities that demand informal, unique communications. Take, for example, customers’ changes to orders, a common challenge in capital goods manufacturing. Sales staff routinely claim that their valued customers deserve fast, individually tailored responses to their requests for changes, and it may seem impossible to respond quickly when using formal communication channels.
Informal communication may indeed get fast attention, but it is prone to losing attention just as quickly. If all of the relevant information is not captured in the moment, and if conversations are forgotten, misunderstandings and mistakes may arise, and customer dissatisfaction and delivery delays increase. For example, the immediate gratification of swiftly confirming a customer order amendment may be undercut by the later discovery that the new delivery date cannot be met — because not all relevant parties were consulted or because follow-up was inadequate to ensure thorough, coordinated implementation of changes.
Collecting and presenting data on past miscommunications — and the resulting delivery failures — may help mitigate resistance to the adoption of formal communication protocols. In our study, formal communication was more common in organizations that approached process improvement systematically (sometimes with Six Sigma). Of the many benefits of data-driven problem-solving, one emphasized by managers we interviewed, is the simple fact that hard numbers can be irresistibly persuasive.
For example, one process at a robotics manufacturer we studied had unsatisfactory delivery performance. Although everyone was aware of the problem, improvement efforts did not initially focus on shortcomings in communication. A shift in focus did not occur until analysis of hard data showed that internal confusion about product-specification changes caused delivery failures more often than any external factor (even machine breakdowns and delays in shipments of components). Of course, such analysis alone is insufficient to prove the effectiveness of formal communication, but it does suggest a need for change.
Once a formal protocol has been piloted, comparative analyses can provide impetus for a wider rollout. One such analysis, at a manufacturer of industrial refrigeration systems, revealed that customer order amendments were twice as likely to result in delivery failures — and that their average cost doubled — when changes were communicated via email rather than in weekly meetings between production planners and sales personnel. Faced with stark numbers, even the most reluctant sales reps admitted that the convenience of email just didn’t matter.
Our aim is not to urge organizations to return to the days when every process was documented in triplicate or to make people jump pointlessly through hoops just for the sake of uniformity. It is merely to show, with evidence from our research, that informal communication has its limits and should not be blindly accepted as a best practice. Lessons from aviation, the military, health care — and now high-tech manufacturing — reveal that formal communication (like organizational hierarchy) not only has a place in everyday operations but also offers compelling competitive advantages that no forward-looking company can afford to ignore.
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This content was originally published by MIT Sloan Management Review. Original publishers retain all rights. It appears here for a limited time before automated archiving. By MIT Sloan Management Review