Internal and External Communication

There are many different types of communication that take place within business units, all of which are crucial to operations. Communication is important firstly to make internal processes run as smoothly as possible. In addition, significant communication takes place with outside organisations and partners. Let's take a look and find out more about why communication is so important.

What is effective communication?

Effective communication improves business efficiency. The exchange of information between individuals or groups, either within the business (internal) or outside the business (external) is called communication.

Poorly communicated thoughts can be misleading, so communication should be effective. Effective business communication allows for employees to understand their roles and responsibilities, easy access to information, coordination between different business units, and the establishment of trust between employees and management.

Example of a team meeting, Wikimedia Commons

Types of communication

There are several types of communication, all of which are used in business on a daily basis.

1. Internal communication happens among employees of the same business.

2. External communication happens between employees of a company and external entities (employees of another business, customers, external stakeholders, etc.).

3. Vertical communications: in hierarchical businesses, if a message is communicated from a higher level to the lower level or vice versa, this is called vertical communication.

4. Horizontal communication is communication between the same levels of a hierarchy.

5. Formal communication refers to the official messages and statements sent by an organization.

6. Informal communications is the casual conversation that happens between colleagues or unofficial conversation for which the organization is not liable.

Another aspect of communication is one-way and two-way communication. In two-way communication, the receiver can respond to the message from the sender, while in one-way communication, the receiver cannot reply.

The importance of internal and external communication

Internal communication occurs within an organization, while external communication takes place with parties outside the organization. Both types of communication play a very important role in the efficiency and branding of the business.

Importance of internal communication

Internal communication may vary from a single email sent by management explaining a new policy, to a general meeting, or a team meeting to decide changes in a product. Internal communication is necessary to:

1. Keep employees well-informed - Organisations must communicate employees' exact roles and duties for an organization to achieve a common goal. Workers like to know about the plans of the organization and do not like to be kept in the dark.

2. Provide holistic view to employees - News about achievements or problems faced by different departments is shared with employees so they can know the reasons behind changes to the company. This increases interdepartmental efficiency.

3. Set an organizational structure - Regular communication between employees provides the same knowledge and value across departments. When done properly, this cultivates an organizational culture of trust.

4. Create a platform for feedback - Internal communication allows employees to provide feedback, discuss an issue, or contradict opinions. Two-way communication is necessary for the improvement of product or business processes.

Examples of internal communication

E-mail correspondence:

This may include updates within teams working on the same project, communication from the HR department to employees, or important communication about the company’s future from the CEO. Many companies now use integrated software for email communication, work planning, and coordination. Some examples of this software include Microsoft Office and Google Office suites.

Team meetings:

Daily team meetings to catch up on the work everyone is doing are common in many companies. Some companies have a long tradition of general meetings, called ‘Town halls’ in startup vocabulary.

Oral communication:

A formal discussion about work planning between two employees may be oral, but it holds the same importance as written communication. For example, a restaurant manager informs the waiter to clean a table in the far corner of the dining area.

Importance of external communication

Organizations have to communicate with customers, suppliers, government agencies, and many others on a daily basis. Communication with outside organizations is, as the name suggests, external communication. This serves the following purposes:

1. Communicating information: Businesses communicate about news, new contracts, or developments with external stakeholders.
2. Branding: Proper external communication is important for image building. All channels should follow a proper strategy to create uniform branding and image.
3. Potential customers: Businesses communicate with potential customers via emails, social media, or advertising. External communication must clearly communicate a unique selling proposition to customers.

Examples of external communication

Email and newsletters:

Many companies communicate regularly with customers via emails or newsletters subscriptions. These emails can be informative and do not always sell something. For example, Sainsbury’s provides information about healthy eating habits to their customers.

Social media:

Social media is a new-age external communication medium. Many organizations find it helpful to use social media platforms like Facebook, Twitter, Instagram, etc. for communicating as well as for gathering feedback from their customers.

Press releases:

Companies use press releases as a form of external communication to reach out to stakeholders via an official statement. For example, they can declare news of the merger of two brands via press release.

Internal and external communication strategies

Internal and external communication go hand in hand. When a business conveys something internally to its employees, it does not come as a shock to employees when conveyed externally. Also, employees may reflect positively about the information in the external world.

How do you create the best internal communication strategy?

1. Involve employees
2. Review current strategy
3. Set realistic goals and timeline
4. Track success using key performance indicators
5. Proofread communication before sending it out to avoid confusion
6. Use internal communication tools like Slack or Microsoft teams for fast communication.

Examples of successful internal communication strategies

TED: Average human attention span is 15 to 18 minutes. Hence, all TED meetings are maximum of 18 minutes.

Netflix: Netflix has an internal communication strategy of a small online meeting between board members and management in which quick questions are discussed and stored for later.

Amazon: Amazon provides information to their employees in messages less than 100 words, as people do not tend to read emails longer than 100 words.

How do you create the best external communication strategy?

1. Define objectives and mission statement
2. Know your audience
3. Deliver value
4. Choose a platform for communication
5. Involve employees and customers
6. Go online with internal communication strategy
7. Track success.

Examples of successful external communication strategies:

Newsletter subscription from Tesco: Tesco supermarkets share information about running discounts on different groceries.

Use of Twitter by Elon Musk: Elon Musk created a huge increase in businesses when he tweeted that Tesla would accept Bitcoin as payment.

Press release: energy companies in the UK informed customers via a media release that energy prices will increase in 2022 by around 50%.

Communication is essential for all businesses as it improves project performance, delivers values, and improves employee and customer relations. Businesses can choose from a number of plans to improve both internal and external communication, thereby bettering the overall efficiency of the business.