Workplace misunderstandings cost billions

A Recent article on the website Management Issues   – Workplace misunderstandings cost billions seems to be spot on when you take a look at the recent SABC and Landbank debacles that are making headline news in South Africa.

A study by employee assessment firm Cognisco has argued that while organisations are often aware of the costs of misunderstanding, just one in three ever takes any action to close the gap.  Apparently misunderstandings between workers and managers cost firms $37bn a year, yet few firms trouble to do anything about it.

It defines such misunderstandings as actions taken by employees who have misunderstood or misinterpreted (or were misinformed about or lack confidence in their understanding) of company policies, business processes, job function or a combination of the three.

And by ignoring the issue firms put themselves at risk for compliance, public safety and legal problems, it added. The primary cost of such misunderstandings was unplanned downtime, followed by poor procurement or buying and, in the most serious cases, the case of making settlements to industrial tribunals.

In the case of the SABC the Board and the suspended CEO have been in and out of court challenging one another. In the case of the Landbank, the ex-CEO is now involved in a spat with the number one stakeholder – Government.

Both cases seem to indicate lack of understanding of governance principles and independent management.

This got me thinking. How do we avoid misunderstandings in the workplace?

Here is what I believe is absolutely essential strategies and tools to use to reduce workplace misunderstandings.

1. Employee Orientation

What do you call thus process in your organization? Induction or Orientation? Is orientation of a new employee a structured or a laissez-faire process?

It is absolutely essential that a new employee undergoes proper induction. Many studies point to the fact that the first 30 days in an employee’s career with an organization, is the most important time. It is the time that work habits and attitudes are formed.

It is quite interesting to take a look at how military forces around the globe treat this period. They do not call it orientation or induction. They call it indoctrination, which is a totally different process altogether. They do not leave it to chance.

2. Policies and Procedures

Having well documented policies and procedures in place, that has been effectively communicated to all employees are vital.

3. Leadership Training & Development interventions

Training managers and executives in governance and other leadership subjects is an absolute must. Yet many senior managers are appointed, it is immediately assumed that because they have MBA’s and past experience that it is not necessary for them to be exposed to internal training interventions.

4. Understanding the importance of Individual and Organisational Reputation

Why would Warren Buffet say to managers:”If you lose money I will understand, but if you damage our good name I will become ruthless!”. He understands and values his own and company reputation.

As long as executives do not understand the nature and value of their own and organisational reputation, they will not manage that asset appropriately.

5. Understanding Labour Relations

Understanding the legal procedures when it comes to workplace dealings is not sufficient. Many managers believe that they can manage employee stakeholder processes only through legal action. Research shows that this is not enough.

6. Effective Communication

Executives like any other staff member needs education & training in intrapersonal, interpersonal and organizational communication skills.

Workplace misunderstandings such as the SABC and Landbank examples impact on organisational reputation and do not communicate a positive message about the organisation’s ability to build relationships.

After all, who wants to work for an organisation at WAR with itself!