Making the Connections

Using Internal Communication to Turn Strategy into Action

Bill Quirke

• Publisher: Routledge
• Year: 2017
• Print ISBN: 9781138456020
• eBook ISBN: 9781351920650
• Topic: Business
• Subtopic: Business General
• Index: Business

Companies know that communication with their people is vital if the energies and the efforts of their employees are to point in the same direction. Making the Connections shows how to use internal communication to turn strategy into action. Bill Quirke demonstrates practically how businesses can use internal communication to achieve differentiation, to improve their quality, customer service, and innovation, and to manage change more effectively. He describes the why, the what and the how of internal communication - why business needs better communication to achieve its objectives, what internal communication needs to deliver to add value, and how organizations need to manage their communication for best results. This new edition contains a wealth of new material, with pragmatic advice and new case studies. Four new chapters cover how to develop internal communication strategy, global communication, engaging employees, and helping leaders communicate more effectively. Making the Connections is based on the extensive international experience of one of the most knowledgeable and leading authorities on internal communication. This thoroughly revised new edition explores the impact of new technology, regulation, globalization and the changing relationship between employer and employees on the process of internal communication.

I Turning Communication to Advantage

1 Getting More Value From Internal Communication

Business today faces a torrent of changes that redefines what is required of employees. Organizations are quickly discovering that they need more than simple compliance from their staff: they need – now more than ever – to engage their minds, creativity, energy and commitment. A business can only achieve its best when everyone’s energies point in the same direction.

This changes not only the assumptions on which internal communication is based, but also the job it is intended to do. Traditionally, internal communication has focused on the announcement of management conclusions and the packaging of management thinking into messages for mass distribution to the ‘troops’. However, its real place is at the leading edge of change. The value that it can add is immense – faster change, more flexibility and innovation, better quality decisions, better knowledge sharing and a more motivated workforce. Although, as a whole, leaders believe in the power of communication, even leading companies fail to harness that power to deliver the necessary results. Internal communication is vital to success and when done well can provide strategic advantage through aligning employee efforts, sharing knowledge and engaging their passion.

The purpose of this chapter is to lay the foundations for the remainder of the book. It highlights the urgent need to improve communication, the business pay-off for doing so and the gap that needs to be closed between aspirations and day-to-day practice. It also makes the connection between the business issues that senior management see as priorities and the importance of good communication in achieving them. It describes how successful organizations see the value of internal communication and highlights those areas in which outdated approaches have created toxic complexity.

Trapped in a Time Warp

The problem is very simple – although success depends on a new approach to internal communication, organizations are spending all their time and effort on an outdated one. Failure to change in organizations is due to the disconnect between the communication that the business needs and the communication it receives. In other words, internal communication is trapped in a time warp. ‘If cars had improved at the same rate as computers,’ says Bill Gates, ‘we’d have $25 cars achieving 1000 miles to the gallon.’ But if cars had improved at the same rate as internal communication, we’d still be walking in front of them with a red flag!

The way in which organizations have traditionally approached communication has been based on applying outdated rules – with disappointing and frustrating results. Companies are falling into a vicious circle. By failing to make a strong enough connection between business strategy and internal communication, they fail to plan and monitor progress appropriately. They then become increasingly frustrated by the failure of communication to deliver results. Organizations are short-changing themselves by not seeing communication through to the end – converting awareness into action. The real value of internal communication is to help deliver business ends by enabling employees to turn strategy into action. However, getting there means draining a swamp of communication confusion and complexity to create a path of coherence and consistency.

What is Changing?

The job which internal communication has to do has changed because organizations are facing unprecedented pressures to deliver in a rapidly changing environment. Research consistently shows that senior managers have five principal concerns:

• creating competitive differentiation;
• developing new markets and products;
• reducing cost and streamlining processes;
• restructuring, integrating an acquisition, making a merger work or divesting a non-core business;
• redefining the roles of the corporate centre and the divisions.

Organizations are discovering that business challenges like these can all be affected by the clear targeting and management of internal communication.

However, a ‘one size fits all’ approach will not work. Internal communication needs to be aligned specifically with the organization’s individual business strategy. Discussed below are four examples of how different strategies demand different internal communication approaches and how successful companies take the role of internal communication seriously.

Using internal communication to create competitive differentiation

Tesco, the UK supermarket chain, aims to create greater loyalty among its customers and to increase the average size of their shopping basket. One enjoyable personal contact with staff per trip, their research shows, can earn lifetime loyalty from a customer.

Tesco employs 150 000 staff in 560 stores who need to deliver this experience to its customers. Since personal contact plays such a key role in customer retention, employees must understand Tesco’s brand promise. The job of internal communication is to create a deeper understanding of the brand promise among employees, and to help them translate it into specific actions for customers – opening up checkouts when queues get long, packing bags, helping shoppers take their shopping out to the car park and even providing jump leads when their car batteries go flat. Internal communication’s value lies in helping differentiate Tesco from its competitors and creating higher customer loyalty for higher profitability.

In the world of professional services, the big accountancy and consulting firms are federations which share a name and a culture. Now they want to build distinctive brands. Ernst & Young, KPMG, PricewaterhouseCoopers and Accenture are spending significantly on building global brands. Their investment is aimed at differentiating themselves and reassuring their clients worldwide, who feel branding is increasingly important in helping them choose from whom to buy a service.

These firms sell a diverse set of sophisticated services worldwide, but global clients expect consistent delivery throughout the world, wherever offices are located. Global branding carries with it the promise of global consistency.

Professional service firms have to develop a portfolio of standard processes differentiated by strong brand values, thought leadership and the ability to develop solutions for clients. These ambitions demand not only better management of the knowledge and learning within the firm, but also greater collaboration between employees. Creating value therefore demands that employees have an external focus, since it is knowledge of their clients’ industry issues which demonstrates a real familiarity with the business and helps win contracts. The challenge is for employees to combine knowledge and understanding of the client’s problems with the knowledge of the consultancy’s worldwide capabilities that could help solve them.

Ernst & Young, for example, uses internal communication to help them do just that. Its role is to help create an organization which is increasingly comfortable with continuous change, has higher levels of staff retention, increased project efficiency and knowledge management, and thus greater client value.

Using internal communication to develop new products and markets

GlaxoSmithKline (GSK) is a successful company in a very successful sector, with spectacular growth figures. Within the consumer healthcare organization, internal communication is clearly linked to creating shareholder value.

The company’s strategy is to exploit its portfolio of brands as effectively as possible. To do that, GSK applies global processes with a local face in individual markets. The aim is to drive greater innovation and creativity across the business, to reduce costs and to reduce duplication by sharing services. They also aim to standardize processes where possible, because it makes it easier to improve them and focuses time and effort on innovation in new areas, rather than on reinventing wheels that exist elsewhere in the business.

To GSK the importance of internal communication lies in helping develop a global business in which managers from each country understand and support a global approach and have stronger local ownership of global processes.

Using internal communication to reduce cost and streamline processes

Unipart manufactures and distributes auto parts to car manufacturers and a large supply chain for the replacement market. In terms of quality and productivity it is now a world leader. It has three key objectives – remove cost and waste, improve productivity and deliver outstanding customer service.

Unipart’s aim is for its 4000 employees to help achieve those objectives, as well as pursuing its core crusade of achieving 50 per cent more for 50 per cent less cost. Its key to achieving this is to target the supply chain.

The organization recognizes that there is a close interdependence between the suppliers in the chain. If there are inefficiencies, duplication and waste in the supplier at the bottom of the chain, these are inevitably passed upwards. Waste is then multiplied at each successive link, saddling the ultimate customer with disproportionately high costs. Beating the competition therefore requires a much tighter management of the supply chain.

Unipart has developed its own approach to supply chain management which involves working in project teams with suppliers to identify the hidden cost of transactions which benefit nobody and eliminate them, thereby reducing cost and inconvenience to both parties. This approach is in stark contrast to the traditional one of using purchasing power to browbeat suppliers into offering better deals.

However, to make this partnership approach work, attitudes and behaviours needed to shift within the Unipart workforce; they had to understand and buy into the ethos of partnership and let go of the browbeating approach. For Unipart the importance of internal communication lies in providing employees with the knowledge to do the job, the will to identify and make change, and the licence and permission to get on and do it.

All these organizations have adopted a similar approach to internal communication. They have approached it as a means to an end, rather than an end in itself, and they have:

• clearly identified their strategy;
• made the connection between the strategy and the specific attitudes and behaviours they need from their people;
• focused their communication on helping achieve those attitudes and behaviours.

Using Internal Communication to Gain People's Support for the Business Strategy

Organizations are keen for their employees to understand the business strategy but, more importantly, they want their people to help turn this strategy into reality by providing excellent customer service, continuous improvement and innovation.

A company thrives by offering customers something different and more valuable than its competitors can. It then has to ensure that its employees deliver on the promise it makes to customers and that employee values, loyalty and behaviour are all connected. Building an internal culture that creates unity and pride among employees acts as a competitive edge that is difficult for competitors to copy.

Indifference, however, can kill differentiation. Customers’ satisfaction is affected by their experience of the entire organization’s performance, so employee attitudes and behaviour are critical to retaining them. The Journal of Marketing cites the main reasons for customer defection as being employee-related. While only 9 per cent of customers are lured away by the competition, 68 percent are turned away by an employee’s indifferent attitude.

Providing a quality service or product to the customer and good communication are inextricably linked. Research shows that good internal communication fosters increased employee satisfaction. Better satisfaction reduces staff turnover, and higher staff retention is linked with higher customer satisfaction. Research carried out by the management consultancy, Bain and Co, reveals that satisfied customers are more likely to stay loyal, and that higher customer retention leads to higher profitability.

Organizations are eager to make the customer’s voice heard within the organization, to challenge internal viewpoints, create a greater sense of commercialism and re-educate employees about customers’ priorities. Yet, too often, the way in which they manage communication does not fit these aspirations but, instead, causes resistance and misunderstanding.

In one organization, senior management were frustrated at the failure of production workers to appreciate the true level of market competitiveness. While only 25 per cent of the board believed that customers were satisfied, nearly 50 per cent of first-line supervisors believed that they were satisfying customers. Worse, supervisors then reassured their team members that everything was fine – defeating the board’s efforts to sound a wake-up call to the workforce.

This disconnect between top management and those at the sharp end was due to a breakdown in the management chain and a failure to educate employees. This company is not alone: 80 per cent of companies reviewed by continuous improvement consultancy Peter Chadwick in the UK, France and Germany monitored customer satisfaction, but only 20 per cent made the information available below middle management. Information about customers and what they value is typically only circulated to 35 per cent of staff. Without such knowledge, how can those dealing with customers be expected to understand them and add value?

Innovation is Crucial to Strategy

Research by KPMG suggests that most of the UK’s largest businesses believe innovation to be crucial in creating an enduring and successful strategy. Management seems convinced that successfully introducing new products and ideas can help even mature companies revive their fortunes. This is borne out by a PricewaterhouseCoopers study of 800 large companies. The most innovative 20 per cent had generated 75 per cent of their turnover from new products and services in the previous 5 years. The least effective 20 per cent gained only 10 per cent of their turnover in that way.

Today’s pace of technological advance means that any gain in superior performance will be brief. Points of competitive differentiation – such as price, quality and distribution – are soon matched. No single innovation will yield a sustainable competitive advantage. The competitive advantage of companies such as General Electric grows out of the company’s culture – a climate that fosters continual innovations and keeps searching for competitive advantage. The question marks that have appeared over Marks and Spencer would have been unthinkable at almost any previous point in the company’s history and show that no competitive advantage can be taken for granted. However, if you get the culture right, sustainable competitive advantage by innovation and other means can follow. Good internal communication is key to getting the culture right.

Continuous Improvement

A KPMG study of a cross-section of 135 manufacturers worldwide over a 15-year period highlighted lack of quality as the single most important source of weakness in Western industry. It concluded that the most significant cost reductions are realized by improved cooperation and communication between the marketing and research and development departments. This approach leads to the reduction of waste through better process control, reduced engineering changes and improved product design. Creating this sort of continuous improvement culture requires better communication, for well informed and more widely educated employees.

Lack of attention to communication and involvement has undermined improvement programmes. Western manufacturing still lags behind due to the very limited success of its improvement programmes, most of which start with a bang, become bogged down and finally fizzle out. They fail principally because project leaders take too narrow a view and do not communicate with, and ...

Table of contents

• Cover
• Half Title
• Dedication
• Title
• Copyright
• Contents
• List of Figures and Tables
• Acknowledgements
• Preface
• PART I TURNING COMMUNICATION TO ADVANTAGE
• PART II LEADING CHANGE
• PART III PULLING IT TOGETHER
• Index