The evidence is in plain sight. Good internal communication (IC) creates high levels of employee engagement, which in turn lifts organizational performance outcomes.
High employee engagement creates around 22% higher organizational profitability and 21% higher productivity, as well as 65% lower staff turnover and 10% higher customer ratings, according to Gallup research findings. Gallup defines engaged employees as those who are involved in, enthusiastic about and committed to their work and workplace.
Improved financial performance and change management results
Effective internal communication and financial performance are strongly related, according to Change and Communication ROI Study reports by Towers Watson (now Willis Towers Watson) over several years:
“Companies that are highly effective at communication are 1.7 times as likely to outperform their peers.”
The Towers Watson surveys found that highly effective companies integrate internal communication strongly into their change management process compared with companies that get poor results from change management activities.
Stronger internal and external reputation benefits
Perceived concern for employees’ well-being was one of the three key areas of responsible behavior that contributed to an organization’s reputation as a top employer of choice to potential employees, according to a 2018 research report by the Reputation Institute. Internal communication would be a big contributor to these perceptions, as the report notes good perceptions of responsible behavior provide a significant opportunity for culture and workplace promotion, especially in a highly competitive job market.
Internal communication promoting your employee value proposition helps to keep staff onboard, reminding them why they joined, strengthening their commitment to stay, and prompting them to refer others to the organization, according to a 2018 Harvard Business Review article. (An employee value proposition (EVP) is the unique set of benefits an employee receives in return for the skills, capabilities and experience they bring to their employer.)
Australia’s Nigel De Bussy emphatically found that employees are the most valuable stakeholders of large organizations, contributing more to corporate financial performance than any other stakeholder group, including customers, communities, suppliers and shareholders. His research measured how strongly orientation towards different stakeholder groups influences financial performance. The coefficient for orientation between employees and financial performance was 0.84 compared with much lower values for customers (0.36), suppliers (0.35) and communities (0.32). The coefficient for shareholder orientation was minimal at 0.08.
Also, top consultants, business writers, and change management advisers are starting to acknowledge that employees are the key stakeholder group – and their individual needs should be addressed as a priority rather than treating them as objects – with the process of managing them termed coldly as ‘human capital management.’
At least one workplace improvement the COVID-19 pandemic has generated is that employers have been obliged to give greater consideration to the wellbeing of their employees. Examples of some of the beneficial initiatives employers can introduce in the workplace are outlined in the timely article by Kate Templeton on how to increase the happiness and productivity of employees. Worth reading. Also, many employers now recognize that better employee communication is extremely important to the future of their organization.
So why did the 2020 Gatehouse State of the Sector international survey find that the value of internal communication is spurned by many organizations? The 1,000+ respondents represented organizations in 33 industries from 45 countries, ranging from fewer than 1,000 employees to more than 50,000 employees each.
The 2020 Gatehouse survey found a low amount of resources committed to IC activities. This is highlighted in the low staffing and budgets allocated to the IC function. The biggest organizations are spending less on communicating internally than in 2019. Survey responses on IC budgets in the 2020 Gatehouse State of the Sector report:
Reflecting the same lack of respect for employees, were the survey results reported at a 2019 international conference in Bahrain by Kevin Ruck. The “listening to stakeholders survey” found:
Yet organizations have more success with engagement, and improved business performance when they treat employees as stakeholders of their future and the company’s future, according to the 2017 Gallup State of the American Workplace report.
It is staring us in the face. Better internal communication (IC) is needed to be made by senior managers, by middle managers and, ironically, by internal communicators themselves to create higher levels of employee engagement. Simply put, engaged employees produce better business outcomes than other employees — across industry, company size and nationality, and in good economic times and bad, according to the Gallup 2017 report. Yet Gallup research since 2000 has shown only one third of US employees are engaged in their work.
Gallup’s 2020 figures show about 13% of US workers are actively disengaged and causing problems to workplace productivity. An actively disengaged employee costs their organization one third of their salary in lost productivity. That means an actively disengaged employee who makes $60,000 a year costs their company around $20,400 a year. In the meantime, an average of 53% of US workers are not engaged. They merely show up for work to do the minimum required – again, an opportunity cost.
The Gallup State of the American Workplace 2017 report found that only 13% of employees strongly agreed the leaders of their organization communicated effectively with the rest of the organization. What’s more, only 22% of employees agreed the leaders had set a clear direction for the organization – and only 15% of employees strongly agreed their leaders made them enthusiastic about their future.
Poor downward communication from the top
Leaders need to understand and improve the manager experience at their company, according to a Gallup analytical report in 2019. Being a manager has its benefits, but it can also be a challenging role within an organization. Managers have more authority, but they can also feel more lost. Managers report being less clear about expectations and experiencing more stress than those they manage. Considering managers have high influence on their teams — they account for at least 70% of the variance in team engagement – their own experiences with your company can affect your entire workforce.
So while 76% of middle managers say they are expected to communicate and engage their teams with company information – typically updates on business performance and priorities, key departmental updates, business initiatives, and business/organizational strategy – it is remarkable that 24% say that they are not.
While two-thirds (66%) of middle managers felt they have the ability to engage and inspire their reports when briefing them on organizational strategy, only 31% felt very confident in communicating this information to their direct reports. This lack of self-confidence is surprising and raises a number of questions –if managers feel they have the ability, what is contributing to their loss in confidence?
The communication skills of many middle managers are very poor, according to a 2016 Harvard Business Review article. This is a concern because such managers play a key role in internal communication and engagement, with a high level of visibility and local influence. But they are not given the attention they need to play their part in the communication mix.
The article noted an Interact survey conducted online in 2015 by Harris Poll with 2,058 U.S. adults — 1,120 of them were employed, of whom 616 were managers — that showed a stunning majority (69%) of the managers said they were often uncomfortable communicating with employees. Over a third (37%) of the managers said that they’re uncomfortable having to give direct feedback about their employees’ performance if they think the employee might respond negatively to the feedback.
The survey results also showed that many managers are uncomfortable with becoming vulnerable, recognizing achievements, delivering the “company line,” giving clear directions, crediting others with having good ideas, speaking face to face, and having difficult feedback conversations in general.
Yet engagement depends greatly on middle manager communication skills
Managers are central to a culture of engagement. As noted above, they determine at least 70% of the variance in employee engagement.
Gallup analysis has found regular meetings with a manager are critical to an employee’s engagement.
“On average, only 15% of employees who work for a manager who does not meet with them regularly are engaged; managers who regularly meet with their employees almost tripled that level of engagement.”
Gallup also finds that engagement is highest among employees who have some form (face-to-face, phone, or digital) of daily communication with their managers. Managers who use a combination of face-to-face, phone, and electronic communication are the most successful in engaging employees. And when employees attempt to contact their manager, engaged employees report their manager returns their calls or messages within 24 hours. These ongoing transactions explain why engaged workers are also more likely to report their manager knows what projects or tasks they are working on. It’s not complicated!
At the same time, as prominent US PR and crisis adviser Jim Lukaszewski observes acidly, managers at all levels need to take more notice of employees individually – their concerns, their fears, their doubts, their uncertainties. “You know the company has problems when they refer to their employees as human assets or human capital. The dehumanization begins when the human assets arrive at work. The main problem is, these assets actually feel things, need things and talk back. But, who in management is really listening for those things. Where is the humane, people-oriented language, customs and emotional connection which most employees seem to need?”
Poor middle manager communication skills have been reported as one of the biggest barriers to success for several years — only a quarter of respondents viewed their middle managers positively on their communication skills. And yet very little continues to be done to tackle the problem. Disappointingly, the Gatehouse 2020 survey results show that providing communication training and coaching remains at the bottom of the list of IC team responsibilities — with around 60% saying they are ‘never’ or only ‘occasionally involved’ in this:
Above image: Gatehouse 2020 State of Sector report.
The 2020 Gatehouse report shows IC planning is absent in far too many organizations around the world. Only 65% of respondents develop written communication plans for key campaigns, and particularly damning is the fact that only 55% of respondents had prepared a written communication plan for a 12-month calendar. A staggering 15% of respondents admitted they don’t conduct any formal planning at all. How can their role be respected by senior management when they don’t produce a tangible comms plan in support of their work? After all, IC funding is controlled by the organization’s annual budgeting and planning process, and so if IC is not integrated into that process, increased IC funding becomes even harder to justify. The survey results show only minor improvements from 2015 to 2020, as in the table below. Overall, the IC approach around the world seems piecemeal and problematic:
Digital tools are only making IC jobs more complex, despite all the hype about them. The Gatehouse survey found about one third of respondents were intending to improve digital channels as one of their priorities in 2020. Unfortunately, such tools have only muddied the waters to date – as almost 40% of respondents reported that their internal technology wasn’t fit for purpose, and has therefore has become a significant main barrier to success. Increased use of digital channels almost inevitably leads to more noise — which ironically is the number one blocker to successful internal communication.
Less than half (48%) of respondents in the Gatehouse survey said their internal communication function (IC) is a part of an integrated corporate communications function. It makes sense to integrate because separate IC functions tend to become isolated from the external business environment since they usually report to the HR department, which by definition is focused internally and has different priorities much of the time from an integrated communication function. Also, use of digital tools these days means that key messages distributed internally also tend to go externally because just about everyone is digitally networked, which reduces the divide between internal and external communication. You have to be prepared to address both constituencies simultaneously, or else they are bound to inform each other…”What you tell your employees is what you tell the world.”
Courage needed for success in corporate affairs
Many of the recommended actions listed below will need communication leaders to persist in proposing initiatives with a certain amount of courage. A January 2019 article in the UK’s Communicate magazine pointed to European research which found successful corporate affairs directors need to be courageous and exercise good judgment in the face of the challenges presented by modern communication. The top traits were identified in interviews with corporate affairs directors, communications directors and corporate leaders over 18 months.
The drivers discovered as keys to success include:
These traits are certainly important in standing up for the importance of organizational communication, especially the downplayed IC area. They raise the question of how communication leaders show how communication adds value to the organization. When asked to provide answers to top executives, comms pros tend use various stories to reflect the complexity of the role. These range from defining communication goals and delivering communication activities to building reputation and boosting sales, to name a few. Communicators report mainly on day-to-day operations, key campaigns and easily measurable activities such as online statistics, which are tactical in nature.
But they seldom demonstrate that communication is also an ongoing strategic process that adds significant value to the company’s performance. A consistent story seems to be missing. It is little surprising then that corporate executives continue to view communicators as channel producers or service providers and relegate impact of communication to the most visible output.
Strategic outlook and business skills needed
(For corporate leaders to be receptive to the IC issues discussed in this article, it goes without saying that the comms leader and their team members need to demonstrate sufficient professionalism and strategic outlook. CEOs expect basic communication skills, but they also want practitioners to have “a firm understanding of the business, how it works, how it’s put together, and what its issues are.” This requirement applies not only to the most senior roles but to entry-level communication professionals who “need to improve their business skills and apply business acumen, including financial literacy, to their everyday job responsibilities.” Recruiters place business acumen among the top 10 most important skills/competencies for internal communication professionals, according to interviews with 10 global leaders in employee communication [page 125 of The Next Level Global Report, 2018.])
“The communication profession is the living embodiment of complexity. Communication is complex, fluid and often misunderstood. It is a function, but it is also a constitutive part of organisations and organising in a way that other professions are not. It is perfectly possible for organisations to operate without buildings, money or products, but it is not possible for them to exist without communication.”
– Professor Anne Gregory, former Chair of the Global Alliance for Public Relations and Communication Management
It is essential that stakeholders perceive the strategic nature of communication and its importance to the organization. This includes understanding the distinction between its strategic and operational contributions to corporate success. Reflecting on strategic contributions counteracts the tendency of communication to be perceived as an operational support function.
The importance of aligning communication goals with overarching business goals has been acknowledged consistently, yet this remains our most enduring challenge – today’s IC goals seldom seem to be linked to corporate strategy. However, new thinking has created a Communication Value Circle, which shows how communication adds value to the organization:
This Communication Value Circle has been developed by Mary Hills of the HeimannHills Marketing Group of Chicago and Dr Amanda Hamilton-Attwell of South Africa. Their model builds on the original model developed in 2016 by Ansgar Zerfass and Christine Viertman of the Institute of Communication and Media Studies, University of Leipzig, Germany. I have also discussed it in my article, “You can now clearly show how communication adds to business value.”
The Communication Value Circle (CVC) identifies 12 dimensions (shown in the outer circle) that are grouped into four broad areas which corporate communication can directly influence to help achieve corporate success. These areas are (1) Social licence to operate, (2) Leadership, (3) Tangible assets, and (4) Intangible assets. At the core of the framework sits the corporate strategy, which should be the starting point for all organizational decisions. Tangible and intangible assets create corporate value, whereas room for maneuver and opportunities for development help to enable value creation (page 147 of The Next Level Global Report):
The Communication Value Circle (CVC) sets the position of the organizational communication function by:
The CVC describes value creation at the two levels of (1) corporate management, and (2) corporate communication. At the core of the framework is corporate strategy – the starting point for all decisions. The tangible and intangible assets shown create value. The ‘license to operate’ and leadership enable value creation. Tangible assets and ‘license to operate’ enable value creation. Intangible assets and leadership will facilitate future value.
The CVC can be customized to your company or market concept, and it still shows the components of the business where communication adds value, the value language to use, and the communication activities that align with delivering value. For communication leaders, proving communication value can be as simple as adopting the CVC framework, and walking your leadership team and other key stakeholders through the way it relates to your company or market context, and “talking the talk” of business value that the stakeholders are accustomed to.
The CVC enables communicators to spend time in understanding the concept, perhaps adapting aspects of it to some extent, and using it to demonstrate to corporate decision makers that the corporate affairs and internal communication activities have a strategic foundation that will give decision makers confidence to increase their support, especially funding to the comms area.
By reading the rationale behind the original model developed by Zervass & Viertman, you can see how this new tool explains the value of your work more holistically. It identifies 12 major communication goals that directly benefit the general corporate goals, thus ensuring alignment between business and communication strategy. Each communication goal in the CVC can be measured using established key performance indicators (KPIs) and research methods (page 143 of The Next Level Global IC Report).
Measurement of internal communication appears to be sadly underused. However, as effective IC outcomes are so important, a range of measurement recommendations are included below as practical initiatives. Communicators need to ensure the communication messengers (including middle managers), their messaging and channels used are actually contributing to employee actions that add to the bottom line. It is important to measure outcomes rather than merely awareness and information, which are only outputs in this process.
1. Ensure messages are delivered and understood
Always check and ensure that messages are being delivered and understood. Use employee research to benchmark the quality and effectiveness of communication delivered throughout your organization, and measure improvements during and after implementation. One time when I was public affairs manager with a hydro power utility, the CEO wanted to ensure an important message on strategic change was reaching the far corners of the organization (the hydro scheme was 100 km long). When I asked my team to check on the extent the message had reached such staff, we found a couple of the operational managers hadn’t bothered to brief them within the stipulated timeline – the CEO severely dressed them down for their lack of professionalism.
2. Include communication questions in employee surveys
Employee surveys overwhelmingly reveal that staff are unhappy with the quality of management communication with them.
If your HR department conducts a regular annual employee survey, seek to include questions about communication. Test the questions with a sample of staff to check if their understanding of your questions is accurate. A good survey will probe employees’ priorities and intentions to remain or leave the organization. The responses will show a correlation between poor communication and intentions to leave – a persuasive case to put to senior management
3. Conduct your own communication surveys
It’s difficult to find and retain good staff these days, and senior managers are much more conscious of the need to treat employees well or lose them, especially in high-tech organizations. Therefore, go straight to the people – get the facts from staff to support your case by conducting pulse surveys on employee communication. Senior managers are hard nosed and take notice of such facts.
Choose your timing carefully so employees don’t get survey overload from being polled too often. You need to include questions additional to ones about managerial communication, or probably you wouldn’t get management approval to conduct the survey. They are not masochistic – they are not going approve a survey that is entirely about their inadequacies!
Even in high-tech organizations you will find employees literally want to see more of their senior and middle managers. An abundance of electronic channels can’t replace face-to-face communication. The survey will reinforce this. All the same, you can ask the respondents about their communication preferences, which obviously will include electronic techniques.
Take the results of the survey to the executive committee or ask an onside senior manager to do this to persuade management to be more proactive with their staff communication. The results will make management take notice.
Speak to HR about building communication behaviors into the key performance indicators of all managers.
4. Conduct your own focus groups
If you don’t have the resources to conduct a full-scale (quantitative) survey of communication, you can conduct your own 2-3 (qualitative) focus groups comprising about 8 employees in each location at minimal cost. Invite a cross-section of reasonably articulate and forthright staff, or you can ask HR’s assistance to identify names. If you aren’t able to attend the other locations, you can supply the questions to HR in the other places and ask them nicely to run the focus groups for you. You could also try a teleconference, but their value is limited because you need to see people’s faces for this activity.
The focus group participants are likely to point out revealing examples and common threads in the shortcomings of management communication. Use these results to hammer managers about their communication performance. Either record the sessions or make notes of some of the best quotes to put to management. But first guarantee to participants their identities will never be revealed to management!
5. Measure managers’ communication outputs and outcomes
6. Arrange staff ratings of their supervisor’s or manager’s communication skills
One effective way to rate the communication skills of supervisors or managers is to ask their staff to respond to a confidential questionnaire, according to a Likert scale, containing questions such as these:
Staff ratings of supervisors or managers’ communication skills can quickly be calculated and summarized from the responses to the questionnaire. Notice the statements are about behavior rather than merely about attitudes. It is much easier to change observable behavior than underlying attitudes.
Ideally, this type of survey would be conducted across your organization, or at least within nominated business units. Then the results could be tabulated into a table comparing all the managers’ results. The important thing then is to circulate the table to all managers and if possible discuss in a meeting in which they are all present. This will unleash powerful competitive peer pressure among the managers to do better next time.
The above measures relate to outputs rather than results. Results are really what matters, and simple measurement techniques can provide the mechanism to improve operational results. You can take the initiative and achieve impressive results by using measurement techniques to identify operational communication blockages and reach solutions that clearly improve profitability of the area.
Arrange interpersonal communication training
If senior managers place a higher priority on better, specific managerial communication behavior, with accountability measures built in, a more productive workplace will be achieved. Unfortunately, there seems to be a widespread assumption similar to driving skills – in the same way that almost no one admits to being a bad driver, almost no manager will admit to being a poor communicator.
Most workplaces need interpersonal communication skills training to be initiated, but it appears to be neglected in the training programs of many organizations. Suitable training can be organized for managers to address their weak communication competencies. You may need to initiate the training.
You can arrange training for managers on interpersonal communication skills, which should include topics such as:
Communication activities could include:
Coaching skills for middle managers
Coaching of staff is considered an important workplace skill for middle managers. My article on coaching staff for better results should help with understanding this topic.
Reporting in The Next Level Global Report, page 111, researchers summarized the results of in-depth interviews they conducted with internal communications professionals at 10 leading global organizations to better understand IC methods and best-in-class practices. The 10 companies interviewed were chosen because they are recognized as the global leaders in internal communication, as proven by inclusion on best-places-to-work lists, awards, and other industry recognition.
Additionally, the interviews helped identify 22 factors that leaders credit for their successful communication with employees across large, multinational organizations. The most important of these are listed below. The researchers found that communicators were largely familiar with the important factors, but did not widely implement them. “Respondents were also hesitant to claim they contribute to the success of the organization, are as effective as they could be in evaluations, and even that they have goals that align with the overall organization, meaning their own perceived effectiveness in internal communication is limited.”
As noted earlier in this article, respondents in the Gatehouse 2019 survey referred to confronting basic barriers to success such as:
These communicators also report a range of inadequacies in their own function:
These major problems imply:
Nearly all respondents in a follow-up study discussed on page 117 of the The Next Level Global Report identified 13 of the most important IC strategic factors. Most of these factors are recognized as fundamental to internal communication, and you can use the list as a guide for your own thinking on the matter:
If you develop a strategic plan to put to senior management pointing to the evidence that effective internal communication’s impact on organizational results, and the fact that more resourcing is needed to accomplish good results, you are likely to gain greater respect and support at that level. Emphasize that this is even more important since COVID-19 struck, because employees are feeling more vulnerable, anxious and uncertain than ever before.
More resources may not be allocated immediately, but keep up a systematic argument over time for this greater support. In addition to a detailed proposal, you can put your case with key points as an executive summary document:
The executive summary should be written tightly for busy decision-makers. The summary should be up to only 2-3 pages in length (write as tightly as you can!) and should briefly include the appropriate sections selected from the following:
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