Effective communication among all parties, internal and external, is a trait of successful organizations in every industry. But achieving this is often easier said than done. Particularly challenging are situations in which similar words have different meanings for different people, even within the same company.

Take, for example, that phrase that all contractors love to hear: The job is done!  To the construction company owner, this might mean all invoices have been paid and he or she can evaluate the project’s profitability. It might also signal that the owner can move his or her focus to the next job, or perhaps use the completed job in conjunction with marketing initiatives. It might even signal it’s time for a vacation.

But the same words may have a different meaning to the accounting department. Accountants ask “Is the job done?” because they’re focused on completing the books and producing schedules. Ultimately, these feed into the contractor’s set of statements and also affect the company’s balance sheet and income statements. This has far-reaching ramifications for the business, particularly if the answer to the question is ambiguous depending on one’s viewpoint. For a job to be complete from the accountant’s perspective, all costs must be in, at which time an accurate snapshot of the project can be taken.

The project manager may have yet another perspective. For him or her, job completion may signify that all work has been completed except the punch list. The work can now be billed, but is the job done? Even if the work is finished, all costs may not be in. Therefore, the answer to accounting’s innocent question may be “no” from one perspective and “yes” from another.

This simplified scenario demonstrates the ease with which parties can miscommunicate even when answering seemingly simple questions. Failure to understand other participants’ points of view can result in finger-pointing, ill feelings, and even poor strategic decisions.

Suppose, for example, that the project is considered closed by the accountants, yet bills continue to trickle in. This may distort the company’s financial picture, for both the project in question and future months. Budgeting and profit/loss pro formas may be skewed, causing unusual monthly income statement spikes. And in today’s troubled economy, lending and bonding relationships may be negatively affected by volatile monthly statements. The list of possible ramifications can grow dramatically from there.

Team Building
One way to avoid these situations is to participate in team-building exercises. Investing time in explaining each group’s perspective can go a long way toward keeping the organization well-coordinated and operating smoothly.

Field personnel need to understand the meaning of accountants’ questions and how their answers affect the bigger business picture. At the same time, accountants may need to learn how to ask questions differently and communicate more clearly to field personnel.

Educating everyone about the entire job process will help ensure accurate estimates of revenues and costs throughout a project. People generally focus on their immediate tasks at hand, so it makes sense to go the extra mile to make sure everybody understands the bigger picture. Having everyone speaking (and understanding) the same language will help the entire organization achieve its objectives.