Okay, executives, entrepreneurs, government officials, nonprofit managers and anyone else who leads people: It’s time to get smart about your communications.
In a today’s ultra-competitive marketplace, organizations have to be fleet-of-foot, constantly driving up efficiency and driving down costs, all while improving customer relationships. This is especially true in times of economic difficulty. Engaging line and support staff in the drive for bolstering the business is the sine qua non of effective organizational leadership. Thus, effective employee communications is at the heart of running the business.
Unfortunately, during economic downturns, many leaders tend to avoid communicating with their people. That is exactly the wrong thing to do. Last October Weber Shandwick reported that almost three-quarters of employees felt that their company should be communicating more about current economic problems, not less. Failing to do so has a real impact on operations. According to a Workforce.com report from also from October 2008, 48 percent – or approximately half – of staff said that the economic uncertainty has caused them to be less productive.
Fear, uncertainty and doubt due to the lack of effective internal communication can also cause high-performing employees to jump ship, since they are the ones with the most options to go elsewhere. When they do, morale plummets even more among remaining staff. This in turn often adversely impacts customer service, further damaging the organization’s brand.
It’s time for leaders to wake up. Effective employee communications aren’t just nice, touchy-feely activities. They are real contributors to the bottom line. According to Watson Wyatt’s 2007/2008 Communication ROI Study:
- Effective employee communication is a leading indicator of financial performance.
- Companies with the most effective employee communication programs provided a 91 percent total return to shareholders (TRS) from 2002 to 2006, compared with 62 percent for firms that communicated least effectively. Moreover, a significant improvement in communication effectiveness is associated with a 15.7 percent increase in market value.
- Firms that communicate effectively are four times as likely to report high levels of employee engagement as firms that communicate less effectively.
I have seen it with clients dozens of times: When budgets are tight and the outlook is future murky, their knee-jerk reaction is to freeze up and retrench. Harried managers, desperately seeking savings, seize on cutting costs in corporate communications precisely when this area is most needed.
Don’t fall into this trap. You owe it to your people, your shareowners and your customers to do the smart thing: communicate with and engage your team even more during these tough times.
Do you agree? If so, how will you answer this call?
{ 12 comments… read them below or add one }
As an entrepreneur, striving to get a foothold up in this economy through strategic partnerships, communication is very important to assure things keep moving and the focus remains on the mission and vision for the company.
Great article!
Lukeither Willingham, Web Developer
Lukeither Multimedia & Design
Hi Eddy: I linked to your blog from Linkedin Groups where you asked for feedback. Good article although I might disagree with you regarding good or “surviving” employees jumping ship. In my relationships with those that are left behind after lay-offs, they are scared to go anywhere else. With hundreds of people competing for a position and willing to accept much less, employees are sticking close to home-even if the conditions aren’t great. You did a nice job of summarizing leading authorities and making the point that in this time – the more communications the better.
Also, you had a few grammatical errors to correct in the 3rd and 6th paragraphs. Keep up the good work.
Dear Eddie,
Your message is powerful, but the delivery is stiff. You need to be less wordy, use less “strategic speak,” and have some engaging and attracting images.
I would love to show you what I can do to make your communications more exciting,
J.
http://innovativesocialmedia.wordpress.com/
All very good points. But I have to ask, why do you think most companies retrench anyway on communications? Not enough foresight to see they’re doing more harm than good? I have recommended the same strategy to numerous clients and most agree with that line of thinking but cannot seem to push it through the approval process. I’m just curious about your thoughts.
I totally agree that more communication is needed when times are tough. Employees know when something is “up” and will make up their own information if left in silence. I’ve experienced this before as controller of an organization that was going through a bankruptcy.
People speculate and the rumor mill grinds long before most “official” communication is released. If we as leaders would embrace the tough times as a means to rally the troops with some honest communication, we would all benefit and be less stressed as a result. Thanks for your article!
Eddie – You are right on the money. I work in the same space, so this continues to confound me as well. Effective communication is at the heart of every business — people have to talk, debate, disagree, listen and reach agreement long before they can execute effectively. Yet for supposedly smart people, most senior leaders are consistently bad at effectively communicating — particularly so under difficult, stressful conditions. Clearly there are exceptions, but they are the exception rather than the rule.
As consultants / advisers / coaches, we have to ask ourselves: why don’t senior execs do the things that are good for them (or their companies)? Likewise, why do 90% of the people who have had a major cardiac event (heart attack) revert to their old behaviors as soon as six months after the event? Clearly illogical. Are they idiots? Maybe, but not in their minds. They don’t believe the negative future applies to them. Someone else maybe, but not them. They don’t want to change. And so it is with senior executives and their communication style. “This is who I am, and it’s gotten me this far, I’m not about to change now. Besides, that data (Watson type research) doesn’t apply to our company. I know what people are thinking about around here (wrong!)” In truth, it’s fear, masked as arrogance, combined with a lack of skill and desire. It they were really good at this, they would already be communicating with people, because they’d know the power of connecting with others.
About the only way to get a CEO to change behavior is to have a respected member of the Board of Directors force the agenda. But that type of change rarely sticks. To make a sustainable difference, it’s unfortunate, but CEO has to go and the Board has to find someone who gets it (the power of effective communication) and has the track record of great performance on the “hard” metrics. Unfortunately, there aren’t many AG Lafley’s and Bill George’s out there.
Good points. A lack of communication fosters a lot of questions, gossip and supposition amongst employees, distracting them from their normal work. Employees who are left in the dark will engage in “what have YOU heard?” hallway conversations. In tough times, when companies are having to do more with fewer people, these distractions lower employee efficiency. Providing the facts (even “I don’t know” is a fact) goes a long way to empowering employees and treating them like adults who can be trusted with the truth.
This article is clearly from an old school managerial standpoint. As a manager you should be communicating daily if not weekly to your employees. Letting them know that times are financially tougher, their input is always welcome. Valued people will stay if they feel they are an important part of the organization. Whether it is “Nice idea” or whatever. Praise is free and should be given freely when deserved. Nice job or an ” Hey I appreciate what you did on xyz” goes along way. At least they take home a good feeling and will be more productive. Even how about I value what you did. take an extra hour and .. go see ( your family/girlfriend/ bowling league/) free an very motivating. Your people will make or break you. Getting extra loyalty and work in this time is vital. Especially if they feel good about giving it.
You have succeeded in putting across your ideas in a brilliant manner. The reader can connect with your thoughts instantly. Your views are very very practical and every business should follow this rule of SMART COMMUNICATION specially in times of crisis.
I am sure your article will bail out many business people from their difficult sutuations !!
Keep up the good work always……..
Regards
Neelam Sanjiv
Manager – Branding & Corporate Communication
PROMED EXPORTS
http://www.promedgroup.com
Eddie,
Good Stuff!
Communication is often a source of huge misunderstanding. Who thought the
English lanaguage needs 800,000 words with multiple meanings?
Keep up the good work!
Eddie – You are on target with this article. During challenging economic times, people are understandably concerned and this tendency is exacerbated by what they hear and see happening with other companies and organizations. I have found that it is important for management to be confident and positive and to speak candidly about how the economy is impacting our work. In addition to creating more comfort so that time and energy can be directed towards work rather than fomenting rumors and unrest, some of the best ideas can be generated by everyone working together with knowledge about the opportunities and challenges.
I agree. As a follower of Rensis Likert, I believe strongly in employee participation. Communication is an essential ingredient.
I think that managers need to trust their employees more. Most employees would rather hear bad news rather than no news at all.