In the latest communications effectiveness survey conducted by Watson Wyatt Worldwide, information from 750 companies representing 12 million global employees provides hard data substantiating the correlation between effective communication practices and improved business results.
“The relationship between effective communication practices and shareholder value is no longer anecdotal,” says Kathy Kibbe, west division communication practice leader for Watson Wyatt Worldwide, San Francisco. “This is our third communications ROI study and, when we look at the results, companies with the most effective employee communications programs provided a 91 percent total return to shareholders from 2002 to 2006, compared to 62 percent for firms that communicated least effectively. Additionally, companies that improved their communications effectiveness experienced a 15.7 percent increase in market value.”
Smart Business spoke with Kibbe about how CEOs can drive communications effectiveness within their organizations and the best techniques for achieving results.
What is the CEO’s role in influencing effective communications?
CEOs and other members of the C suite set the tone for communications effectiveness by creating a line of sight between the mission, vision and goals of the organization and the employees. Top executives recognize the role managers play in communicating the organization’s messages and how vital those managers are in driving a plan to improve communication. Our research shows that employees want to hear directly from their CEOs about important business messages. They also want their managers to translate those issues into their daily realities and managers need C-suite support to do that.
What were the secrets of the top performing companies?
Best performing companies keep their customers front and center as they communicate organizational change. Letting employees know how their performance impacts customers not only drives employee engagement, it drives financial performance. For example, we worked with a retail client to build an internal customer support center and our mission was to make sure that every employee in that call center had a strong sense of their internal customers as well as how their service to employees affected external retail customers down the line.
Managers can play a role in connecting the dots for employees who may not deal directly with end customers, such as IT professionals. In companies with high communications effectiveness, the IT workers know who their internal customers are and how their work impacts both internal and external customers. Also, when change is communicated, the discussion should focus on why the change is beneficial for customers, not how it will better serve the company.
How can CEOs support managers in their roles as communication leaders?
Managers are the interpreters of change within an organization. They give the change context, so it’s important that managers know not only how to communicate change but how to talk to employees about what the change means to them individually. It’s also important to involve internal groups, like communications and HR, in the design and execution of communications programs, especially around organizational change. In our survey, highly effective companies had comprehensive change management programs that engaged managers in the process; those companies reported that their managers were nine times as likely to enthusiastically implement new approaches to work.
How are the executives in the top performing companies measuring ROI?
These executives are measuring employee engagement as an indicator of communications effectiveness, and they are also tracking the scores within specific employee groups to see where they might have more localized issues. Some are also tracking employee retention and productivity increases as a way to measure communications effectiveness. After deciding which levers they want to move to drive shareholder return, CEOs can track the results and refine the organizational communication strategy.
The top performing companies also incorporate company branding into internal communications programs as part of their employee engagement and retention strategies. Internal branding allows companies to define to candidates the employment experience, how employees are expected to perform and what they receive in return.
Did the survey note any opportunities for improvement?
We’re seeing a downward tick in the number of companies that are soliciting employee input about major decisions, such as how work gets done. Companies are also becoming a little less transparent in communicating the reasons behind major changes. My sense from talking to clients is that they are not soliciting input because they fear an inability to act on employee recommendations. But sometimes having the conversation about why the organization can’t meet employees’ requests is just as critical. It’s this kind of respect for opinions and willingness to be open about the business that can drive real engagement. There are too many benefits to making employees part of the discussion to shy away from having the conversation.
KATHY KIBBE is the west division communication practice leader for Watson Wyatt Worldwide, San Francisco. Reach her at (415) 733-4334 or email@example.com.