4 Types of Business Communication and How They Benefit Your Business

Business communication is crucial for the success of any enterprise. However, the very term communication can be quite broad. Every piece of information or memo is a form of communication. A complaint, feedback, an order, an interaction with a supplier, all of this is communication in one form or another.

Now, to understand why it matters and how to improve it, we must first segment all these types of communication into appropriate categories. Generally speaking, there are four major types of business communication.

• External
• Internal downward
• Internal upward
• Internal lateral

All four categories sound quite self-explanatory. Still, there’s more to it than it first appears. Each comes with challenges, as well as unique opportunities for improvement. With that in mind and without further ado, here are the top four types of business communication and how they can benefit your business.

1. External

External communication occurs between the members of your organization and some external business or entity. This is communication with customers, prospects, partners, or strategic vendors.

In the internet age, your employees can use free means of communication, but still, some use a phone system. By setting up a small business phone system instead of a default setup, you’re increasing communication safety. You’re also getting by a lot cheaper this way. Overall, it’s a scalable solution that you should never dismiss.

Given the sensitive nature of this communication, it’s important that you brief it in the onboarding stage. They need to learn how to be firm yet polite and what they can and cannot share with external entities.

Remember that they also need a sort of clearance to access certain contacts. Sure, you can get trainees to talk to customers but having them speak to partners unsupervised is not the smartest of moves. While this may seem the simplest of the four, it’s the most consequential. Therefore, it deserves the most attention.

2. Internal Upward

Internal upward communication usually comes from a subordinate to a manager. In other words, as the name suggests, it’s the type of communication that moves up the hierarchical ladder. This type of feedback is the best way for the leader to find out what’s happening in their company.

There are, however, a few problems with internal upward communication. First, a direct line to the top is possible only in small businesses. Imagine if every single employee of McDonald’s (2 million of them) had access to the CEO’s phone.

This is why internal upward communication usually works as a chain. This means the employee has a direct line to their immediate superior, who passes their information. Still, for obvious reasons, you need mechanisms to bypass this line (in case of an employee-manager conflict).

Another problem arises from fear. People are as good at giving feedback as you are at listening. You’ll shoot yourself in the foot if you can’t take constructive criticism or hold grudges. This way, people will avoid talking about problems even when they are too big to ignore.

3. Internal Downward

Internal downward communication comes from a manager to a subordinate. The organization is the same as what we’ve discussed previously; only it’s another way around. This is the key form of giving instructions and orders. While having an established method of communicating orders is good, it’s even better to adjust to the situation.

In his art of war, Sun Tzu said that if the orders are unclear, subordinates are not at fault for not executing them. The most important thing about internal downward communication is that it’s unambiguous. So, prepare a speech or an email and ask someone for feedback before sending it out.

You must appeal to your subordinates to speak out if any part is unclear. Since some are ashamed to admit they have doubts, you should also read their non-verbal communication. It’s even safer to assume that they got something wrong and check up on them every once in a while.

Ideally, you want this to be communicated in a written form (emails are great). This is because some people don’t respond well to being put on the spot. Speaking now or never can be quite intimidating. Give people time to review the information and reread it if necessary. Then, you will get much better feedback.

4. Internal Lateral

Internal lateral communication happens between peers. The difference between the above-listed two is that it’s far less formal. Sure, downward and upward communications can also be informal; however, this is often not a good idea. First, there are many reasons why fraternizing with employees is a bad idea. Second, informal upward communication can sound disrespectful.

The means of internal lateral communication usually don’t differ much from private conversation channels. If they share the same office space, most communication is verbal. Still, colleagues can communicate via social media or company IM tools like Slack. However, if sensitive information is shared, it’s vital that you establish the mandated communication tool.

Good internal communication will improve team unity better than most team-building activities. Even more importantly, this will increase your retention rate by quite a margin. Even those who would leave for a better offer might stay considerably longer because of the collective.

Also, make sure you do all you can to facilitate internal lateral communication. This doesn’t have to be informal and is crucial to any team project you’re coordinating. Make sure that this communication runs smoothly.

One more thing, it’s important to point out that hybrid workplaces (remote workers and office workers together) need a digital space where they can all come together.

Wrap Up

In the end, communication is deeply personal, so it’s best left to develop organically. For business communication, however, it’s essential that you set some framework. This way, it will develop along the most effective lines. Remember, nonetheless, that you can’t control everything (nor should you). By understanding some of these basic principles and challenges, you’ll already be on the right path to getting the most value out of it.