Step 3
Define the tactics
The actual Tactics for measuring and demonstrating business value must now be defined. The four strategically valuable quadrants ensure a balance of measures is maintained.
For each Value quadrant a series of different indicators are used to collectively demonstrate business value to ensure this balance is maintained. A maximum of 25% of the total measurement and value demonstration activity is advocated per Value quadrant.
Figure 9: The Value Framework
The value quadrants
For each quadrant, three specific focuses of value demonstration are suggested. The following summary of measures for internal communication is a generic one. It is by no means exhaustive. Other quantifiable indicators of the impact of internal communication can be used, in fact this is positively encouraged as such a framework must at all times be tailored to fit the specific needs and characteristics of the organisation it serves.
Employee: An organisation’s people are at the heart of all internal communication activity. It is here where business value is clearest. Building on traditional foundations, the Employee Value quadrant of measures encompasses much of the familiar devices internal communicators employ to measure and demonstrate the value of their activities – most notably the employee satisfaction survey. But importantly, used as part of a more balanced approach the employee survey is one measure of communications effectiveness and not the sole indicator.
It is suggested that employee attitude surveys be modified to track employee engagement levels rather than just satisfaction. This focus is more directly aligned to the business objectives. Stakeholder analysis stimulates two-way internal communication. Identifying key factors that engender employee commitment to the overall business mission and objectives (or, perhaps more importantly, issues that are preventing it) give the function enhanced strategic value. Internal communication activity has an important part to play in extracting new ideas and innovation from the very people that understand specific processes best – the workforce. Measures of employee innovation and ideas are also significant indicators of internal communication value.
Leadership: Internal communicators must improve the way they demonstrate value to the leadership level of an organisation. The research highlighted just how critical the relationship with leadership is to the internal communication function as a whole. Findings revealed how dependent internal communication activity is on adequate allocation of resources and financial investment. Significant effort must be directed at nurturing the right kind of leadership support and strengthening internal perceptions of the function across the wider management line.
Communications is a relationship business. To show value professional communicators must put in place a systematic way of monitoring and adapting to the changing needs of executive level individuals. A degree of service flexibility must be demonstrated to senior management as should able financial acumen through accurate budget management.
Operations: As part of demonstrating business value, internal communication professionals must be able to show measurement and improvement of its own day-to-day performance. For such an intangible activity this could be perceived as very difficult. However, internal communication activity is as much an internal service as any other business process. It must utilise operational practices to scope and measure the service it provides to the rest of the organisation. The internal communication function is also a series of business processes with an input action and an output product. Therefore its actual operational performance must also be measured by key indicators and attributes. Another important, but often unseen, value activity of internal communication is the degree to which the function advises and supports various departmental project teams. This daily contribution to the collective business effort should be factored into measurement.
External: Like any other business function, internal communication cannot be too inwardly focused. This applies to how the function demonstrates business value too. Concentration on the end customer or consumer is important to internal communication as every employee is a good or bad ambassador for the company.
Business value can be shown by tracking customer satisfaction levels against employee engagement and overall profitability. To have real impact, this activity must be undertaken on a smaller scale but more regularly than once a year.
Another increasingly valuable role of internal communication activity is to involve and engage alliance partners and suppliers (within an appropriate context of intellectual/commercial security). Outsourcing arrangements can often mean that organisations have large numbers of indirect employees. The internal communication function can demonstrate its value by engaging them with two-way communication as it would more traditional labour pools.
Customer: Finally, like any other business discipline, internal communication must demonstrate a dynamic outlook with a willingness to bring new ideas into its operations. This involves environmental scanning – looking at the latest advances and trends within the field of communication then linking this back to the organisation’s own internal communication challenges. If the function is exceptionally innovative in its approach then this is commercially valuable to the business. This must be reinforced to senior management and the wider workforce. Value can also be shown by comparing the organisation’s own internal communication activities to that of competitors. No business operation can afford to be left behind by a more agile competitor. This applies equally to an organisation’s communication operation.
More ways to measure value
There now follow nine more examples of how internal communications value can be demonstrated. These examples fit within the four quadrants and complete a balanced value framework. They are not exhaustive. They are intended to be a flexible set of measures. It is up to each internal communicator to decide which mix of measures works best for their organisation.
External value quadrant:
Why?
Customer focus is a companywide activity. Internal communication must be able to link its activities to the customer and the quantifiable benefits this activity generates.
Where to look?
● Customer satisfaction surveys & reports
● Marketing research/analysis (focus groups/surveys)
● Compliment/complaint analysis
● Press coverage of employee events and activities
● Social Media analysis
How to show?
● Link customer satisfaction with profitability and employee engagement levels – a series of quarterly scores.
● Show where key operational issues are being communicated internally (then further link with changes in behaviour and performance)
What value?
Visible benefits: Internal communication is showing practical applications that have positive impacts on customer service performance.
Hidden benefits: Internal communication is supporting increased employee branding which in some organisations is a sustainable competitive advantage.
Why?
Looking outside of the immediate organisation presents an opportunity to show what the latest trends are in the field of internal communication and how other organisations may be benefiting already. Like any other part of an organisation the function must strive to be innovative in its activities. Critically, care must be taken to relate these trends and examples of best practice, back to the organisation. The internal communication operation should ultimately aim to make itself a critical area of sustainable competitive advantage.Where to look?
● Group/industry associations & alliances
● Award competitions
● Marketing analysis: Competitor analyses
● Trade publications
● Specialist communications forums & networking events
● Communications consultants
● Site visits to other companies of similar size
● Industry podcasts
How to look?
● Individual case studies (featuring parallels to the organisation’s own situation)
● Industry/geographic trend in investment levels
● Judges critiques
● Benchmarking studies
What value?
Visible benefits: Demonstration of forward-thinking, innovative approach to improving the operation.
Hidden benefits: Demonstrating that internal communication can be a sustainable competitive advantage.
Why?
Employee attitude and satisfaction is the common foundation for demonstrating internal communication effectiveness. But what’s really important is tracking levels of knowledge and actual behaviour (Likely, 2004). A well informed workforce is an involved and loyal workforce. Employee engagement measures (performed regularly) will reveal changes in behaviour. It will help identify ‘what’ and ‘why’ people are thinking in a specific way and lend weight to increased emphasis in communication activities.
Where to look?
● Always-on engagement platforms
● Analysis of internal social/conversation
● Annual staff engagement survey
● PDP & appraisal feedback
● Employee turnover & attrition levels
● Absenteeism & sickness
● Analysis of internal social/conversation
● Intranet hit rates
● Readership pulse surveys
How to show?
● Numerical scores of commitment levels
● Ratio analysis
● Comparisons with previous quarter/year
● Links to employee turnover and organisational performance
● Individual quotes & case examples
What value?
Visible benefits: Enhancement of traditional staff satisfaction surveys that will ultimately reveal general levels of commitment. In many organisations this will form part of a Balanced Business Scorecard performance management system.
Hidden benefits: Engagement is more relevant to the strategic business agenda. Satisfaction (though important) is not a direct measure of internal communication value. Engagement measures update this traditional internal communications measure and put it in context – as one part of a more practical, balanced system of value indicators.
Why?
When IBM took over Lotus in the mid 1990s, the eventual purchase price was US$3.5 billion – far above the actual market value of Lotus itself (US$250 million). The reason behind this seemingly inflated valuation was the demonstrable value of Lotus’ staff and their intellectual capital. Employee innovation and creativity is an essential aspect of any organisation in today’s knowledge economy. Internal communication must be involved in facilitating the flow of ideas across all organisational lines – in terms of both volume and speed.
Where to look?
● Suggestion schemes
● Comment boxes
● Online polls & campaign responses
● Employee surveys
● Internal competitions
● Open forums
● Working groups
● Communities of Practice
How to show?
● Numerical volumes of ideas
● Comparisons with previous quarter/year
● Cost: Benefit analysis
● Links to productivity & organisational performance
● Individual quotes & case examples
What value?
Visible benefits: Promotion of ideas and innovation leads to business improvement and increased staff morale. Aligning internal communication activity to operational improvements demonstrates the essential role the function has to play in the development and growth of the organisation.
Hidden benefits: Encouraging the healthy flow of ideas and suggestions is part of a wider two-way communication culture and underlines a need for internal communication activity.
Why?
Through general analysis of management performance, internal communicators can identify where improvement areas are needed with regard to individual skills training.
Liaison with HR to address gaps in individual communications skills followed by the arrangement of communications workshops, lunchtime briefings or an online advice service or telephone positions internal communicators as specialists in their organisation.
Where to look?
● PDP & Appraisal systems
● 360 reviews
● Employee survey & communication/culture audits
● HR reports & observations
● Employee exit interviews
● Management feedback, forums & conferences
How to show?
● Number/description of workshops arranged
● Testimonials from attendees as to benefits
● Longitudinal comparisons of appraisals, 360s and employee surveys
What value?
Visible benefits: Improvement of managers’ basic communications skills will aid the daily operational effort.
Hidden benefits: Greater appreciation and advocacy of internal communication within the management line. Implicit positioning of internal communication as the functional specialist.
Why?
Senior leadership responds best to hard facts in any business situation. Internal communications professionals must be able to demonstrate value for money through effective financial management. Operating within a set budget – even generating a small percentage saving should be shown to senior levels of the organisation.
Where to look?
● Department budget performance - actual Vs forecast
● Discussions with suppliers - % discount savings through contractual agreements with preferred suppliers
● Market & industry intelligence
How to show?
● Ratio analysis: Turnover: Communications budget
(tracked against cost of inflation)
● Ratio analysis: Profit per employee linked to spend on internal communication per employee
● Unit cost of communication items – year on year comparisons
● Email: cost vs time equation
● Comparisons internally with other functional spends
● Benchmarking with similar size organisations
What value?
Visible benefits: Demonstration of value for money and effective cost management. Enhances internal perceptions of the function as a professional, results oriented discipline.
Hidden benefits: Harder fiscal comparisons strike a cord with senior leadership. Any argument of increased investment in internal communication must be built upon sounds financial data. Assuming a zero-budgeting perspective instills fiscal accountability and negates fears of wasting resource.
Why?
Professional communicators fail to demonstrate just how much value they add to the organisation through consistent involvement with various project teams. Internal communication functions must make the link with practical business outcomes. Demonstrating project involvement encourages equal status with operational management levels and changes general perceptions of the function. This input and effort must not go unseen as it is highly valuable.
Where to look?
● Operational performance results
● Personal time sheets
● Project meeting minutes & actions
● Specific communications output for projects
● Testimonial from project leaders as to benefits
How to show?
● Quantifiable breakdown of time spent in project work
● Display of key results from operational projects
● Display of communication material delivered to support projects
● Quotes relating to value of comms from project leaders
What value?
Visible benefits: By recurrently linking activity to practical project output (e.g. a safety project that has helped to reduce accident levels), internal communication is demonstrating more tangible business value.
Hidden benefits: Positioning of the function at an advisory level with adequate opportunity to influence decision-making. This in turn improves internal communicator’s overall understanding of the real operational business issues.
Why?
You can't manage what you don't measure. Every business operation must be able to track its own internal performance. Internal communication is no exception. The operational effectiveness of its processes must be measured in order to be further improved. This is critical to ensure that the operation reflects how the organisation is developing.
Where to look?
● Internal service survey of employees or key stakeholders
● IT performance data – hit rates, down time etc
● Team time sheet information
● Readership surveys/reports/focus groups
● Line reporting mechanisms – individual PDPs
How to show?
● Operational objectives measurement
● Target performance standards
● Longitudinal comparisons (quarterly/annually)
● Benchmarking with similar size organisations
What value?
Visible benefits: Tracking actual operational performance as part of a balanced measurement model enables communicators to demonstrate value from both cost and quality perspectives. Adopting a regular, systematic approach to continual improvement of specific internal communication operations demonstrates visible professionalism as well as maximum value for money.
Hidden benefits: This practice guards against damaging internal perceptions surrounding what internal communication actually does. It enhances the case for investment.