What are the components of a successful company? Most would likely say efficient operations, steady sales, and effective leadership are all key factors. As companies grow, management tends to focus on the big items like marketing and sales. While this makes sense, less obvious but equally important factors like an effective internal communication strategy are often overlooked.
If internal communication issues are left to fester in silence, they can become sleeping giants that cause internal strife or even take down entire corporations. As you’ll see in the following examples, what may seem like mistakes of greed or hubris are simply the result of not having the right internal communication tools in place.
1. Yahoo Workforce Management: Removing the Human Element From Employee Reviews
After causing dissent in their ranks by requiring all remote workers to go back to the office, Yahoo caused even more internal disruption when they began grading workers on a curve. Instead of continuing with the standard employee reviews, Yahoo started forcing their managers to give a certain percentage of their employees failing grades, even if their performance was satisfactory.
This workforce management strategy doesn’t observe internal communication best practices. In fact, it’s what many workforce management experts say has contributed to the continuing decline of Yahoo. Word of the forced rankings began to leak quickly to the press via Yahoo’s internal communications platform, where managers complained about having to give arbitrary rankings to employees that deserved better.
2. The Enron Collapse: A Failure to Communicate
The story of Enron’s brutal downfall was quickly written as a tale of greed and malfeasance. However, a study of the problems that led to Enron’s collapse revealed multiple failures by management specifically when it came to internal communication tools.
Among the internal communications best practices that Enron failed to address, the study highlighted the fact that management didn’t maintain “adequate communication to be informed of organizational operations” and an “openness to signs of problems.” This lack of communication from management to employees, and lack of listening will doom any organization.
To stave off this kind of internal communications malfunction, it’s important to keep a regular dialogue going between management and employees. Team communication apps are a virtual and mobile channel that can accomplish this by ensuring employees are empowered to provide feedback without fear of retribution.
3. The WorldCom Accounting Scandal: A Lack of Safe Internal Communication Tools
In the largest accounting fraud perpetrated before Bernie Madoff’s Ponzi scheme, WorldCom was forced to declare bankruptcy after inflating their assets by $11 billion. It took internal auditors working secretly and late into the night to discover the fraud and report it to the SEC. If WorldCom had given their employees an anonymous secure internal communications platform to report wrongdoing and supported whistleblowers, perhaps this disaster could have been averted.
Workforce management leaders can avoid these PR nightmares by observing internal communications best practices, and influencing management to keep internal communication channels flowing and transparent for their employees.
By implementing modern internal communication tools to create a dialogue between employees and management, they can drastically reduce the odds of career-ending blow-ups and bring company issues to light, so they can be handled responsibly.