As kids we all played the game of telephone.  Whether it was because we lived in a day where we didn’t have actual cell phones and angry birds in our pockets, or that there had not yet been an injunction on the production of lead based toys, which caused us to believe that such an unbelievably boring game might actually be fun.  Whatever the cause we all played the game.  The purported “fun” of the game was to see just how distorted a message could become when passed through a chain of people.  The longer the message and the longer the chain of people, the more egregiously the message would be distorted in the end.  “The teachers will crack any minute” becomes “The teachers will crack any minute purple monkey dishwasher” and “Sega Genesis or Game Gear” becomes “Mega Pegasus for Reindeer.”  This may be a less than thrilling way to pass the time if you are with a group of friends, the power goes out and all your phones die, but in business the game of telephone is a killer. 
When you look at the time and effort it takes to get a product or concept complete it can be quite extensive, even when done efficiently, so adding unnecessary reporting lines or “telephones” to the mix will only serve to delay the process, create cost overruns and what’s worse is cause the delivery of a final product that does not meet its intentions.  Of course, the bigger the product/process and the more “telephones” in between the more damaging and expensive this game will become.
In order to keep your process effective here are a few suggestions:
Keep your ears clean – It’s not enough to just listen, but you have to comprehend.  As advanced and structured as our language is, two people can hear the same thing and come away with two very different interpretations.  On top of that, people aren’t always sure of exactly what they want especially when it comes to processes they don’t understand.  So, you have to get to the root of the issues and find out what they really need by asking the right questions in the right way.
Keep reporting lines minimal– It is good to get a healthy amount of input into decisions, but if there are too many people with too much input a simple project can become more bloated than your uncle on thanksgiving and subsequently veer off target.  Also, make sure that those you have positioned toward the top are decision makers and know that they will be held accountable, because those with nothing to lose always seem to have lots of “good ideas.”
Keep the line open – Part of the problem of the telephone game (and what makes it “fun”) is that the originator of the message won’t know how their message has been interpreted until the very end and they have no chance to correct it along the way.  If you are tasked with improving a product for your customer based off of customer input then be sure to check in with them throughout the process.  Even if you get everything clear up front it’s always wise to touch base at intervals during the project.  The same goes for your decision makers and on down; just because you explained what was expected of somebody doesn’t mean they will produce exactly what you were looking for.  

In the end, communication is key, but you have to know which types of communication are most effective and with whom they are the most crucial.  Communicate with the right people and in the right way and the value of the message you send up front will be maintained in the end.