Clearing the fog: How to fix organizational confusion

Organizational confusion is an invisible tax on every aspect of a business. Leaders often underestimate how much time, money and energy are wasted when no one is on the same page and ambiguity reigns – to say nothing of the costs associated with lost opportunities. Unfortunately, internal confusion is a common challenge encountered by companies.

Understanding why confusion happens, why it’s so costly and how to prevent it is a big step toward cultivating a more focused, resilient workplace.

Make no mistake – business clarity is not just a “nice to have.” It’s a strategic, competitive advantage in a fast-moving, complex business environment. It’s also entirely within a company’s sphere of control, making it one of the fastest, most effective ways to improve long-term business performance and success.

In this blog, we’ll discuss:

• What organizational confusion means for most businesses.
• The various costs associated with workplace confusion.
• The common drivers of confusion.
• The symptoms of confusion – and if they are present within your organization.
• How to determine the underlying causes of confusion and eliminate it.

What is organizational confusion?

Imagine a group of people rowing a boat – but they are all rowing in different directions. This leaves the boat circling around aimlessly, perhaps temporarily facing one way before being jerked another way and even tilting wildly from side to side, but ultimately not really going anywhere. Meanwhile, everyone on the boat grows pretty annoyed with each other and, as a result, morale evaporates. Eventually, everyone gets tired and stops putting in effort. The boat is left adrift, ending up in a destination no one wanted in the first place.

This is the essence of confusion in the workplace.

Organizational confusion is defined as a breakdown in clarity, understanding and coordination, preventing people from working together toward common objectives and achieving success. This dysfunction happens when:

• Leaders are misaligned in their goals and priorities.
• The company has failed to set goals, strategies or priorities at all.
• No one can agree on their shared mission, vision or purpose.
• Leaders act inconsistently, saying one thing and doing another, which sends mixed messages to employees about the right actions to take.
• Decision-making authority or chain of command is unclear.
• Communication between leaders and employees – or among team members – is infrequent and insufficient.
• Transparency is lacking.
• Processes and procedures are not established or well understood.
• Employees are not clear on their roles, responsibilities or priorities, or how they fit within and contribute to the larger organization.

In which ways is organizational confusion costly?

Lack of clarity may not show up as a line item on a budget, but its negative impacts on businesses are direct and widespread.

Operational costs

These costs can be summed up as dings to efficiency, productivity and even compliance.

• Work slows down significantly because people often have to stop to clarify steps, reverse course or correct or redo tasks
• Decisions or approvals are delayed, because no one knows who has the authority to push an initiative forward
• When they do not communicate well or coordinate their efforts, teams end up working in silos, where they duplicate work or pursue solutions that do not complement each other. This can lead to wasted funds, redundancies and undesirable rivalry and friction between teams.Unclear expectations can lead to more mistakes and poor quality.Errors can result in compliance issues.
• Without alignment, strategic drift can happen – meaning that actual execution of work strays from the intended organizational strategy as people focus on the wrong things, resources get allocated in less-than-optimal places and the organization moves away from its desired direction.

Employee costs

These costs are felt in the form of impaired relationships with employees and reduced retention.

• Employees can get really frustrated under the constant stress associated with working amid confusion – always feeling uncertain about their work and frequently having to course correct or fix issues. This erodes trust and confidence in the organization and its leadership, and leads to employee burnout, reduced morale and disengagement.
• When employees feel this way, they become motivated to leave the organization, eventually increasing turnover. There are many hidden costs associated with high turnover, from the loss of institutional knowledge and skills of valued team members to the time, resources and funds spent replacing employees, including recruiting, onboarding and training new workers.

Customer costs

These costs are felt in the form of impaired relationships with customers, diminished customer loyalty and reputational damage as word spreads externally.

• When team members are not aligned in their approach, training or knowledge, customers can receive conflicting – and sometimes incorrect – information.
• When team members are unclear on how to solve problems or who has the authority to offer certain solutions, customers have to deal with slow response times and issue resolution.
• Confusion allows details to fall through the cracks, leading to inconsistent customer experiences such as errors, service gaps and variations in quality.
• Customers may demand refunds or rewards to make up for errors or poor service.
• Customers may decide to do business elsewhere, which

Financial costs

Money can be misspent because of confusion, hampering the profitability of businesses.

• Project costs can run higher due to inefficiencies.
• Delays, misallocation of resources, employee turnover and customer churn can all lead to revenue loss.
• When strategic planning is overlooked, companies can waste funds by letting employees focus on certain initiatives over other higher-priority, more profitable endeavors.
• Different teams or departments can make redundant investments or purchases, unaware of what their peers are doing in tandem.
• Instances of non-compliance can result in investigations, fees and other penalties.
• Companies can miss out on opportunities for growth and expansion because their focus is elsewhere and no one is working in coordination. Where could an organization be if its leaders fixate on the right things and do not wait a few years to take certain actions? It’s hard to measure, but lost opportunities can be quite impactful over time.

Why is organizational confusion so common?

Confusion rarely pops up overnight. Instead, it accumulates over time from a series of decisions that treat clarity as an afterthought.

The main drivers of confusion include:

• Poor leadership. In fact, this is the most common culprit – everything starts at the top of any organization, and confusion is no different. Whether it’s owed to insufficient training, inconsistent practices, limited communication among leaders or promotion of the wrong people to the ranks of management, lack of vision and conflicting directions fall squarely on leadership.

• No strategy. It’s a big problem with no one can answer the question: What are we trying to achieve together? If the organization’s direction is hazy or frequently shifts without explanation or communication, employees will struggle to prioritize the right tasks and take the preferred actions.

• Overly complicated organizational structure. Companies with excessive layers of approval, unclear reporting lines, overlapping roles and responsibilities and siloed departments will contribute significantly to confusion. Frequent restructuring can worsen the situation.

• Lack of documentation and frameworks. Without basic things like policies, standard operating procedures or even job descriptions in writing to provide consistency and serve as a formal guidepost for daily operations, the internal situation at any company can go haywire fast.

• A culture of avoiding accountability. When no one wants to make decisions and take ownership out of fear or to prevent conflict, everything grinds to a halt.

• Rapid growth. During such times, scaling organizations outgrow their human resources infrastructure and organizational structure. Leaders are often so busy focusing on expansion that intentional redesign of the organization is put off. Meanwhile, leaders overlook new teams, reporting structures, processes and other complexities.

How do you know if your business suffers from confusion?

If you wonder whether your business is in trouble, here are the major red flags to look out for:

• Employees frequently act uncertain or hesitant, and often ask for clarification.
• Employees express frustration with their ability to get work done and often do not know who to go to for questions or approval.
• Teams interpret and approach initiatives differently, meaning managers may be giving inconsistent direction.
• Most of the time spent in meetings is dedicated to discussing issues, but conversations circle continually. Decisions are never made and action items remain vague and unassigned.
• Ownership of projects and tasks is unclear.
• Deadlines are missed regularly.
• Projects stall.
• Productivity dips.
• Customers provide negative reviews or feedback.
• Turnover ticks upward.

How to identify the root causes of organizational confusion and eliminate it

1. Talk to employees

Learn from your employees about their experiences in the workplace. For a quick response, you can conduct a pulse survey or a focus group centered on the topic of confusion – where it exists and how they encounter it.

To continue collecting employee feedback over the long term, conduct annual employee surveys with questions aimed at detecting confusion. Examples:

Do you understand the organization’s strategy and the company vision?

Do you feel leadership communicates well and is clear about your goals?

How effective do you think leadership is?

2. Get leadership aligned

When confusion exists, in most cases it starts at the top. Bring leaders together as soon as possible for an alignment session. The outcome of this session should be absolute clarity on mission, vision, values, company culture and strategic priorities and goals.

Continue to have leaders meet for alignment sessions on a regular cadence.

3. Plan a course of action

Next, follow up with leaders to clarify the organizational structure, including roles, responsibilities, reporting lines and ownership of decisions.

Standardize core processes and the workflow between teams.

Establish a clear and consistent framework for communication on these topics across all levels of the organization.

4. Cascade the message down

Bring the next level of managers into the conversation about clarity so they can then communicate a consistent message to their teams.

Incorporate improved communication, transparency and building trust into leadership training to ensure these are skills that managers regularly use. Encourage them to communicate direction and priorities to their people regularly, including one-on-one meetings. (Research shows that organizations that treat leadership capability as a strategic investment consistently outperform those treating it as a secondary initiative. Additionally, trust in leadership is among the strongest drivers of company culture and is directly tied to turnover and retention risk, productivity and discretionary effort.)

It’s also a good idea for executive leadership to talk directly to frontline employees about the organization’s commitment to clarity in a townhall meeting and through other supplementary forms of communication, such as email.

5. Put everything in writing

Everything that has been discussed – for example, mission, vision, values, strategies, goals, priorities, standard operating procedures, policies, communication frameworks, organizational structure and reporting lines – should be documented for employees to reference.

6. Emphasize accountability

Tie leaders’ and employees’ performance to strategic priorities and accomplishment of personal goals. Conduct regular performance reviews and address any issues with misalignment quickly.

Frequently asked questions

Key takeaways

• Organizational confusion is a breakdown in clarity, understanding and coordination, preventing people from working together toward common objectives and achieving success.
• Confusion carries significant costs for businesses: operational, employee and customer related and financial.
• Dips in productivity and rises in turnover are among the two most common warning signs of confusion in your organization.
• To overcome confusion, get leadership aligned on strategic priorities and communicate a consistent message down through the organization.
• Business clarity is not a “nice to have” – it’s a must for engaging and retaining employees, maintaining productivity and performance, and enjoying long-term business profitability and success.

For more information about common challenges faced by businesses beyond clarity issues, download our free e-book: 7 most frequent HR mistakes and how to avoid them.