Internal communications in New Zealand

Perceptions around organisational and employee communications in New Zealand – a discussion paper

www.ideasshop.co.nz

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Introduction 3

Internal Communications – why it matters and where it’s heading 4

Raising the Bar on Internal Communications in New Zealand 6

Detailed Findings

Value 7

Strategic Versus Tactical 8

The Role of Senior Leaders in Internal Communications 9

Leading Internal Communications 10

Resourcing 11

The Internal Communications Toolbox 12

Internal Communications Strategy and Engagement Linkages 13

Measurement 14

Cross Cultural Communication 15

Contents

Published in October 2008 by Ideas Shop Ltd

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Today, it is well recognised that no company, large or small, can expect to be a high performer in the long term without energised employees who believe in its mission and understand the contribution their role will make in achieving success.

Internal communications, also known as employee communications or organisational communication, is a key contributor to the conversations that need to happen between managers and employees about the organisation’s strategy.

Done well, internal communications helps employees to understand the organisation’s vision, values, and culture. It may involve staff members in issues that affect working life and keep employees informed about key organisational/ management decisions.

Ideas Shop has been working with large and small organisations in New Zealand and Australia on internal communications and change management. Over the past decade there have been enormous changes in the quality, channels and sophistication with which organisations have viewed and implemented their internal communications.

To better understand the current state of internal communications practice in New Zealand, Ideas Shop invited internal communications practitioners from Auckland and Wellington to talk about how the internal communications function operates within their organisation.

A series of 52 qualitative interviews were conducted with key internal communications professionals and senior managers over the period March – June 2008. The interviews were conducted both face-to-face and over the telephone and ranged in length from five to 35 minutes in duration.

Respondents came from a range of sectors including telecommunications and ICT, central and local government, financial services, primary production and health. The majority of the organisations had staff of more than 1,000 and all had people spread throughout New Zealand. Some organisations were part of multinationals or had an offshore presence.

The key areas discussed were: leadership; strategy and planning; the internal communication function’s role; channel management; and impact measurement.

We also canvassed practitioners on contemporary issues, including how strongly internal communications are being used to assist in building employee engagement, and cross-cultural communication practices.

The results were compared with international research from Melcrum, Towers Perrin, IABC Research Foundation’s Best Practices in Employee Communication: A Study of Global Challenges and Approaches, and the work of Bill Quirke (Synopsis) and T. J. Larkin.

This report provides a snapshot of how the internal communication discipline is operating in New Zealand and a starting point for discussion among New Zealand public relations professionals about how we can improve.

The confidentiality agreement between Ideas Shop and the interviewees mean that neither the name of the respondents nor their organisations can be released. This anonymity was adopted to ensure the responses were frank and objective.

Introduction

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contributes to company success. But understanding on its own is not enough. Commitment comes from a sense of engagement – the winning of hearts as well as minds.

Engagement involves employees feeling a strong emotional bond to their employer, recommending it to others and committing time and effort to help the organisation succeed. In 1999, Gallup published research that showed engaged employees are more productive, more profitable, more customer-focused, manage risk better and less likely to leave their employer. But while organisations like to promote the idea that employees are their biggest source of competitive advantage, the reality is that most organisations struggle to leverage the different parts of the organisation as effectively as they could to recruit, motivate and retain capable workers .

Our research shows New Zealand internal communications practitioners are still more focused on tactics than strategy and primarily use written communications to deliver messages, rather than having the resources and senior management support to implement best practice methods that create two-way conversations. In addition their communications plans are rarely linked or developed alongside staff development and engagement strategies. Measurement is also ad hoc, with very few organisations achieving ‘best practice’.

The research reveals that these most likely stem from a lack of understanding amongst senior leaders about how internal communications can best contribute to business sucess. Most senior leaders saw internal communication as an

Organisations are typically keen to engage their people for a variety of reasons. They want to unleash the talent and energy of their people, give them strong personal ownership for delivering their goals, impart a sense that everyone is working for the same business and harness their drive to tap into discretionary effort and achieve extraordinary things.

They also want to create a buzz around the workplace so that people enjoy coming to work, feel it’s a great place to be and create a virtuous upward spiral of engagement and energy.

In 1994, James Heskett and his colleagues at the Harvard Business School published a paper titled ‘Putting the Service-Profit Chain to Work’. That research clearly showed the link between engaged employees, customer satisfaction and profit.

It also pointed to a single important factor in employee engagement, the one thing that underpins it all - open communication. Employees have to feel informed of, and involved in, a company’s direction in order to support and actively promote whatever that direction may be.

It is in fulfilling this function that communicators can make the biggest impact in any organisation; while it needs to run deeper than just the internal communications department, corporate communicators can play a huge role in a company’s engagement efforts.

If organisations are to engage their people, they must ensure everyone understands the key business issues - the ‘why’ as well as the ‘what’.

They must also ‘make the connection’ to show how individual success

Internal Communications – why it matters and where it’s heading

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output and ‘soft stuff that is nice to have’. Most did not fully recognise the extent of their role in driving effective internal communication.

Most senior leaders tend to be focused on the ‘hard’ measures, delivering the required outcomes on time, on budget, and on target. The ‘soft’ stuff is all too often done as an aside, or left to human resources. Awareness raising is required to ensure senior leaders realise that the soft strategies foundation of hard strategy success.

In contrast, communications practitioners recognised the importance of senior leadership buy-in ownership of internal communication as significant to success, particularly around communicating and embedding organisational strategy, or significant organisational change.

They would also like to involve senior leaders more in the day-to-day communications and start to shift the communications from ‘delivering messages’ to have richer conversations with staff.

The perceived lack of value for internal communications amongst senior leaders is not unique to New Zealand. Watson Wyatt research in 2006 showed employers devote far more resources to top-down communication (management emails, newsletters) than to upward or two-way communications (employee meetings with senior executives, focus groups). A mere 4% of companies surveyed rate their upward communications programmes as “excellent” and just 27 percent rated their performance in this area as “good”. Less than half regularly measured their communications, either formally or informally.

The result is a missed opportunity both in terms of productivity and profit.

Internal Communications – why it matters and where it’s heading

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International research is clear that improving the effectiveness of internal communication has a direct link to increasing organisational performance and engagement, and therefore market value.

Good organisational communication creates more engaged employees, who create more loyal customers, who in turn create bigger profits.

The following five steps are crucial if we are to achieve more effective internal communication in New Zealand organisations:

1. Clearly link internal communication delivery with organisation and business/ organisational benefit.

2. Involvement of internal communications specialist advice during strategy development rather than at the end of the process, particularly around employee value proposition/ internal brand, engagement and change management.

3. Strong linkages between human resources and internal communications; and internal communications and external communications.

4. Specific expectations around internal communications practice – including the role of people managers, link to reward, and agreed measurement.

5. Implementing cost effective and robust measurement around internal communications.

Raising the Bar on Internal Communications in New Zealand

+ Adding local context to news/ information + Encouraging and sharing feedback + Providing a route-map through complexity + Role model for vision, values and business priorities

From

To

+ Information is power + Command and control + Ring fencing any crisis + Waiting until the ‘solution’ is ready

The challenge is for senior managers, internal communicators and human resources professionals to work together to develop and implement effective communication programmes and measurement mechanisms that will make a difference to the performance of their organisation.

The changing role of line managers in internal communication

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Senior managers understood in principle the value effective internal communications can deliver to the success of their organisation. However, the majority of respondents (75%) did not believe internal communications was as good as it could be in their organisation. The reasons cited for this included skepticism within the organisation, issues around delivery, lack of internal communications resource and underdeveloped communications channels. Leadership was only cited a couple of times as a core issue.

The majority of managers said internal communication was generally left to an internal communications function to develop and implement through agreed channels (newsletters, intranet etc). Leaders perceived their role as primarily “delivering to staff what our internal communications manager produces”.

Few involved their internal communication practitioners in the strategy development process. In fact, a number noted that external relations staff were more often involved.

This combination of factors seems to be contributing to the fact that internal communications practitioners are heavily focused on the tactical aspects of their role and are not involved in the front-end strategic planning around the issues/ announcements that will affect staff.

It will also be contributing to a lack of cross-functional alignment between human resources, internal communications, external communications and business strategy teams.

Detailed Findings – Value

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Most internal communicators consider their output to be right in the middle of the Strategic-Tactical continuum, with most saying they spend less time on strategic issues than on the tactical side of their role.

“Depends on level of the manager and advisor working together, and/or specific requirements. We aim for the strategic advice level but often end with the doing - we are best with words! Some very good strategic thinking comes from the Comms team and this is recognised as such by many managers – but equally some managers just want the words and some advisors oblige and don’t push the strategy.”

Most internal communicators would like more involvement at the strategy and planning level. Many of the respondents commented on the fact that they were not involved in the planning and strategy stage of communications around a business decision, but rather were brought in after decisions were made to ‘make it happen’. Most have a desire for, and recognise the benefits of, stronger linkages at a strategic and planning level.

For those who were involved in strategy development, there was a clear sense that the involvement made it easier to manage external and internal risk, and build an effective communication programme.

They are also aware of the benefits of devolving delivery to people managers, both in terms of effectiveness and to drive greater employee engagement.

However, the current reality of the internal communications in most New Zealand organisations is around key deliverables, leaving little time for strategic input.

“There are not enough of us to avoid the tactical and we still get treated like a typing pool at times by senior managers.”

Senior managers were largely ambivalent about the necessity for their internal communications resource to be more involved at the front end of strategy development, although one manager had just started to include their internal communications manager and said there was a clear positive impact.

Detailed Findings – Strategic Versus Tactical

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There is a varied level of recognition that effective internal communications strongly relies on the engagement of senior leaders and people managers.

Managers did not fully recognise their own role in driving effective communication in their organisation. Instead, internal communication delivery is often seen as solely the responsibility of the internal communications team.

“Internal communication is not recognised at all as a key area of management expertise. With the establishment of our centralised unit it seems it is now seen as solely our responsibility and this is a weakness.”

As a consequence, for many organisations there is very little expectation of managers in terms of internal communications. The majority of internal communicators expressed some frustration at the lack of regular face-to-face communication between staff and managers and feedback mechanisms.

Some organisations have greater expectations of their managers and include communications outcomes in performance objectives.

“I have been able to have internal comms included in the orientation for new managers which felt like a major victory. I am continually pushing for the importance and selling it to managers but it is an uphill battle.”

Most internal communications practitioners either consciously or inherently understood the importance of senior leadership buy-in ownership of internal communication, particularly around communicating and embedding organisational strategy, or significant organisational change.

However, the perception of most senior managers spoken to was that internal communications is purely a delivery function. Although well utilised (often to the point where capacity is entirely stretched), internal communicators are working mostly on tactical outputs. There is no broad understanding of the strategic role that internal communications can play to positively impact engagement and ensure awareness and understanding of key company information.

“Some managers can have a narrow view of what comms provides (seen as media, writing speeches and publications, wordsmithing) – others recognise strategic importance and value-add.”

The lack of involvement of internal communications in the planning phases of projects is a clear indicator that most managers see it as a delivery function.

“They see internal communications as part of the end of the process when they are telling staff decisions and don’t feel they need to engage staff during the process.”

Detailed Findings – The Role of Senior Leaders in Internal Communications

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The group or function that internal communications is attached to varies across organisations. Most practitioners report into a corporate affairs or communications group. Other groups reside in human resources, public affairs, strategy, marketing and CEO support.

Leadership access is seen as more important to the success of internal communications in an organisation than where the function sits.

“Our place in the organisation works because the connection with management gives an understanding of strategic direction from the inside, reach, and the ability to connect with the right people and make things happen.”

Access to leadership is easier in smaller organisations or in the private sector where corporate affairs is usually incorporated within the leadership team.

A strong connection with strategy and planning teams and human resources were also noted as a real benefit in terms of the structural fit of internal communication.

“The link with strategy is really helpful. Previously my area sat within marketing and there are links with marketing but this current arrangement works better.”

The need for a strong link between human resources was a common theme, and noted by those senior managers interviewed:

“We probably don’t do enough in terms of linking our internal communications and HR strategies. At the moment, most of the internal communications is an add-on that comes at the end, rather than sitting down during the organisational development strategy process and saying, ‘what are our channels and how are we going to best get these messages out and embedded in our organisations’?”

The link between external relations and internal communications was also noted as important but not always as strong as it could be.

“I’m not sure our media relations people really understand what the internal communications team does or how we can really support them to actually build a better external brand presence. We have several thousand employees who are our best advocates but often our external and internal messaging are either not aligned or just out of sync.”

Detailed Findings – Leading Internal Communications

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Resourcing issues tend to focus on the need for more full-time employees and the experience levels of current staff, rather than insufficient budget.

There was a clear sense that opportunities for improving internal communications were being missed because of the lack of ‘people on the ground’, and the heavy emphasis on delivering specific outputs (an intranet or newsletter were often cited).

Currently, in most organisations, responsibility for internal communications rests with practitioners, rather than senior leaders and people managers, with internal communications acting as an enabler/ support.

“Right now we do it all. Managers don’t have the expectation to communicate. It is a model that puts a huge onus on a couple of people and is frustrating in that managers are so underutilized as communicators. It would be so much more effective to use our managers as a key channel.”

Internal communications is not always recognised as a specialist field and so there is often a lack of skills training to ensure that staff have the appropriate knowledge/ capability.

Detailed Findings – Resourcing

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Internal communications specialists are heavily involved in “written” communications and under-utilised in providing the training and support required for managers to be effective face-to-face communicators.

The most common channels being used are the intranet and newsletters.

Most internal communicators expressed satisfaction with newsletters, rating the channel highly as a means of effective internal communication.

“With staff spread geographically, newsletters are the most effective way of reaching our staff, conveying company culture and passing on information about what is happening in head office and in the regions.”

The majority of internal communicators express dissatisfaction with their current intranet and over half were in the process of refreshing structure and content. There was a belief that effectiveness would increase substantially following redevelopment.

For the majority of organisations surveyed, there was a sense that managers placed a low priority on regular face-to-face communication and internal communication being left to the “specialists”, i.e. the internal communications team.

Research by global professional services firm Towers Perrin shows leadership is the single most important success factor for internal communications. A person’s direct manager is the employee’s preferred source of major information and the key face-to-face channel.

Detailed Findings – The Internal Communications Toolbox

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About half of the organisations surveyed have a formalised internal communications strategy in place that links in some way to the business strategy. Of those that do not, about half of them are about to develop one.

However, the survey found that alignment between internal communications’ strategies and organisational development strategies tends to be limited. This is not surprising given the siloed organisational structure in which internal communications is separate from the human resources team.

Where organisations have an engagement programme (about half), there are internal communication aspects incorporated and measures included in the engagement survey, although these tend to be very high level.

Some organisations have achieved a high level of alignment with links being obvious.

“Our comms planning is built around our engagement results. We see the whole continuum. As part of that there is communication direction in all areas so that the ‘line of sight’ links are clear to staff. We have also just hired a specialist engagement communications person.”

Detailed Findings – Internal Communications Strategy and Engagement Linkages

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Overall, measurement activity is quite low with a number of communicators expressing the desire to measure more frequently but lacking the resources to do so, and not necessarily being aware of some of the lower cost options.

One organisation holds quarterly audits to measure communication around the business strategy - an annual engagement survey that has a substantial internal communication section - and they conduct snapshot surveys throughout the year to measure the success of individual initiatives. This was the closest to best practice identified in the survey.

At the other end of the scale, the majority of organisations took a more ad hoc approach, relying on feedback on the intranet or informal unsolicited feedback.

Often measurement is more about whether staff like the channels used, rather than whether the messages carried through that channel are changing attitudes and influencing behaviour.

“We get great feedback on our newsletter. It is very popular and we have had other agencies asking for copies of it so that they can copy our format.”

There was slightly more measurement of individual initiatives to test whether the initiative has succeeded in achieving objectives.

“We don’t measure our overall strategy but for each initiative we measure the success of it using an online survey tool. We get a great response to this and think people really engage with this process.”

There was general recognition that more robust and regular measurement was needed to demonstrate the linkages between effective internal communication and building engagement.

Detailed Findings – Measurement

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Most public sector practitioners were highly aware of the need for different approaches for different cultural communities, and age groups. However, few had the time or resources to do this on a regular basis.

Interestingly, a number of public sector internal communicators noted that their external communications campaigns, particularly when related to social marketing campaigns, were far more sensitive to cross cultural factors than internal communications programmes. This was predominantly due to time and resourcing constraints and internal communications programmes not being considered a high priority by senior managers.

Most private sector organisations were less concerned with cross cultural communication.

Virtually none of the organisations were collecting data through impact measurement, or other means, to fully understand the cultural drivers for their employees and align these with their internal communications programmes.

“Cross cultural communication is not necessarily something that we have thought about a whole lot but we probably will be as we now have an office in Asia and I am aware that what we put out from head office in New Zealand is not necessarily going to be as effective for our staff there.”

Detailed Findings – Cross Cultural Communication

Ideas Shop is a creative Public Relations company working with leading and emerging brands. We are a next generation professional services firm.

We are also one of the only public relations firms in New Zealand with a specialist internal communications/ organisational change communications team. Our work is tried and tested by major New Zealand and overseas organisations.

Ideas Shop knows how to make your communications processes work for you to deliver on your strategic plan and drive bottom line results. Our team brings a formidable mix of legal, human resources and communications expertise to ensure your organisation manages any expansion, review or restructure respectfully and effectively.

This survey was conducted using our in-house market research support.

Ideas Shop Ltd

Level 2, 15 Marion StPO Box 9977WellingtonNew Zealand+64 4 381 2200