According to the Bureau of Labor Statistics, approximately 1 in 5 new businesses fail within their first 2 years, while almost half will fail within their first 5 years. In other words, the odds for entrepreneurs to keep their companies up and running after 5 years are about 1 in 2 chances.
But why do businesses fail?
Experts have identified the top 6 reasons for failure, involving lack of financing, poor location, and ineffective business plan.
However, studies dedicated to business transformation and growth reveal alarming trends when it comes to failure. Indeed, entrepreneurs who can secure funding, develop a strategic growth strategy, and identify the best location for expansion face new and unexpected challenges regarding their communication. Growth brings new communication requirements which can slow down and even irremediably stop a business’s advancement.
Communication is instrumental in asserting your reputation, driving customers, and building brand awareness with new audience groups. Unfortunately, growth requires companies to bring their communication abilities to the next level, which is where things can get hectic. Below, we’ve reviewed some of the most commonly overlooked communication mishaps that could break small companies in their growth phase.
Not finding a marketing plan that resonates with your new audience
Business growth is synonymous with new audience reach, whether it is international, cross-state, or even generational reach. More often than not, companies establish a market plan that meets the needs of their primary audience group. Unfortunately, when the audience group changes, the marketing plan must also reflect on the transformation.
A small business that approaches an international market must get to know who its local competitors are and what the customers expect to avoid a marketing faux pas. Gerber, for instance, marketed baby food in Africa using a picture of a baby on the label. Unfortunately, the brand was unaware that companies in Africa prefer to choose pictures of what’s inside because many customers can’t read. Needless to say, the operation was not as successful as the brand expected. Gerber, however, is a large corporation that can survive the comms mishap. A smaller brand would not have been able to withstand the loss.
Inadequate pairing in the team affects business communication
Cross-team and cross-project communication are crucial to maintaining productivity and success at a business level. However, as the business grows, employees may move into new roles, and the team can also recruit new talents. How will these people work together?
While it is impossible to make teambuilding strategies a part of the recruitment process, many companies miss out on the opportunity to test personality and communication types. Tests such as Firo-B, Fundamental Interpersonal Relations Orientation-Behavior, or psychometric assessment can evaluate how an individual would react within the team and in a specific situation.
For example, a talented professional may be best suited for independent work within the team rather than collaborative projects as a result of their interpersonal preferences. Unfortunately, if the individual were to be cast for teamwork, they may not be able to deliver the quality expected.
Remote teams abroad struggle to fit culturally
When a business chooses to strengthen its presence in a new market, one of the preferred approaches made possible during the pandemic is hiring a remote team. Suppose an American company wishes to break into the European market. The CEO chooses to build a team of specialists combining the best of British talent. While this technique may seem like a good idea at first, there are several communication obstacles. Firstly, time zone differences can make it tough to stay on the same page. If a US leader manages the new team, task delegation and employee management could be made almost impossible due to time zones. Additionally, despite speaking the same language, the culture and approaches between the US and the UK are very different. An American team is more likely to cheer openly, while a British team tends to remain phlegmatic, which can lead to misinterpreting each other’s mood and intention.
Finally, work ethics may also be different, which can create gaps in expectations. With limited contact with the base, the remote team can develop its own culture, which may not fit the overall company’s view.
Furthermore, when the remote team’s first language is not English, a lot can also get lost in translation, regardless of people’s linguistic skills.
With a bigger reach comes bigger responsibilities
Small companies are not necessarily expected to react to world events. However, when a business has a significant market presence, the audience expects the brand to take a position on world issues.
The Russian and Ukrainian conflict, for example, has caused brands to receive a lot of backlash for:
- Not closing their operations in Russia soon enough or at all
- Not stopping partnerships and activities with Russian suppliers and contractors
- Not finding ways to support the Ukrainian population
- Failing to display the Ukrainian flag in their social media feeds
- Not taking a stance against Russia
- Etc.
Similarly, businesses with a bigger reach will also be expected to express their views on:
- LGBTQA+ rights
- Animal rights
- Environmental issues
- Gender debates
- Family issues
- And many more
Unfortunately, not publishing your views is not an option and can be just as devastatingly destructive as showing your support to “the wrong side” of any conflict. Yet, one of the most commonly overlooked and misunderstood aspects of business growth is the responsibility to inform, educate, and guide your audience, not only on the market but also with inspiring political and social messages.
Communication is the golden path to success. Yet, business communication is greatly affected by growth for a variety of reasons. Companies welcome new talents, approach new markets, and must accommodate international cultures. Their PR reach also evolves both in terms of wingspan and purpose. Growing brands are expected to act as a moral compass on the moral, showing good vs. bad decisions.
Understandably saying the wrong word to the team or the public can have a dramatic effect on the company. But it begs an important question that aspiring entrepreneurs must tackle before it becomes too late: Why are capitalist entities such as companies required to display enhanced communication skills at an international, interpersonal, intercultural, and moral level? Can profit and communication truly walk hand-in-hand?