Fresh ideas for internal communication in the current economic scenario
I’ve been wanting to write a post about the importance of internal stakeholder management or internal communication in the current scenario of economic recession for a while. Now, after having participated at the 4th Internal Branding and Employee Engagement Conference, here are some fresh ideas.
The issue of how Internal Communication is acquiring a more and more important role in the current scenario is not new to this blog. Recent studies point to that, but the question is how is this translating into practice and changing the panorama of internal communication.
This was precisely one of my main questions when taking part at the recent Internal Branding and Employee Engagement Conference in Amsterdam, a forum with internal communication managers and brand managers and specialists from consultancies. Though most of the case studies presented at the Conference are still from the pre-bubble period, late 2008 or early 2009, they translate a concern in adapting and adjusting tactics (or launching new ones) to deal with the economic downturn.
Here are some of my main takeaways:
1. The economic crisis doesn’t mean direct cuts in internal communication – All participants revealed that they are not experiencing strong cuts on their budgets, but in some cases they are redirecting their budget more to the “listening mode” of communication rather than to the “speaking mode”. A participant explained indeed how the budget of a product advertising campaign was converted into a corporate advertising campaign (including internal activities), thus in some cases investments might be increasing.
2. In the recession, employee engagement can be leveraged through significant participation in the corporate strategy – Peter Jones from British company BUPA revealed important data from an internal survey demonstrating that 83% of people declare that the future of the company is one of the issues that engages them the most. (Note to readers: Do you have similar data from other studies confirming this?) On the other hand, if companies believe they have to earn their “license-to-operate” why not start internally and why not start with employee’s participation in the corporate strategy? Inspirational example from Budapest Bank in creating an internal change agents network to facilitate the engagement in corporate identity renovation campaign. Also, in the current scenario, companies seem to be giving a lot of attention to communicating their values in innovative and consistent ways to employees.
3. Going too fast on the action/ communication regarding the economic downturn can create you more trouble than help – The effects of communicating the crisis and some unpopular cost cutting measures – including employee’s wages and benefits or strong travel restrictions – took HP’s European Imaging and Printing business to deal with another problem. As explained in a brilliant presentation by Rupal Ulrich, a strange silence and a sharp reduction of employee’s participation through the normal channels, demotivation and rumors where the consequences of the company’s reaction to the crisis. Folks at HP found their way to at least invert the negative tendency (“We got our employees back”, Rupal stated), but the problem is far from solved. I wonder how many of you out there are facing similar situations in your company or clients which still haven’t been properly addressed? What are the risks of a “disengaged” or “actively disengaged” workforce in a time when simply waking away is not an option due to the difficult economic scenario?
4. Impacts for the future: more professionalism in Internal Communication and the end of “Do Me” Departments – Already now but more in the future to come, Internal communication cannot be a service to get brochures, events, e-mail blasts, newsletters or whatever (illustrated here by the “Do me this, Do me that…”). Peter Jones gave a very good hint explaining the experience of the positioning of his Internal Comm. Department under the premise that there are no fundamental differences between internal and external communication in what regards the need to take decisions based on numbers. Know the demographics of your people, measure the results and argue for your budget based on numbers are some of the basic assumptions of his work – valid not only for internal communicators I would underline.
5. Lessons to be applied: written policies on Internal Communication – In the times of crisis, seems pivotal the need for written internal communication plan and the need for a written policy on internal communication (Peter Jones mentioned to it as a code of conduct, but I prefer this idea). Because you cannot fail on communicating issues due to manager’s will to keep their reputation internally; because aligning internal communication with business objectives requires a consistent and legitimised approach; because manager’s should commit to internal communication through their own MBO schemes. Is this something that your organization or your clients have?
Please share your views!
I’m not going to add to the different views expressed, but I’d like to state a few points regarding the very interesting (for me) topic of the stakeholder theory of the firm:
1. “The stakeholder model of the firm” was conceptualised long ago. Freeman in 1984 was one of the first to address it. But Post, Preston and Sachs in 2002 also added to the process of “Redefining the Corporation”. According to these and other authors, saying that ‘CEO’s serve shareholders interest first foremost’ is wrong since managers are agents for the corporation and not for its shareholders. Their first and foremost concern should be to create value for the organization, not for the single or specific shareholder, and how to distribute this value.
2. Independent and unsuspected organizations like the Dow Jones, through its Sustainability Index, continuously research on what business success over the long term looks like. And they don’t argue for a primacy of the shareholder over other stakeholders.
3. But we all agree that profit is a measure of success. However, short-term profit and satisfaction of the shareholder can have little to nothing to do with sustainable success.
4. If stakeholder involvement is seen by the company as a rhetoric strategy, I agree with Paul that involvement is a mere lip service. But, on the other hand, I suspect from the utilitarian idea that if and only if the organization involves the stakeholder with the purpose of achieving a business goal does PR work as it should work.
5. Corporate governance models are also diverse, as a debate from the 30’s demonstrates. On one side, Prof. Adolf Berle’s model of strict governance claims that all powers of the corporation are to be used for the benefit of the shareholder. On the other, Dodd’s broad Corporate Governance model sustains that society my request that a business is conducted in such a way as to safeguard the interests of those who deal with it even if this curtails the proprietary rights of its owners.
Fascinating discussion. I think one of Toni’s points about engaging employees as brand ambassadors links into Paul’s perspective of PR practitioners focusing solely on achieving organisational objectives.
Toni mentions “using” employees and Paul seems also to see those who do not have a recognised “stake” as needing controlling rather than engaging with.
Organisations do not have a right to exist in (democratic) society and do so only because the public enables them to do so. This general public has the power to take action and affect any organisation’s achievement of its goals. Such people should not be viewed as passive receivers of corporate messages nor should they be seen as open to manipulation by PR or management.
Specifically, although employees have a dependent relationship with employers (particularly in the current economic situation), any attempt to use them as a fake ambassador is unlikely to be either successful or sustainable.
Surely the best form of public relations is that which is credible and which stimulates genuine support from publics, not coerced transmission of corporate speak.
João, where we differ is over accountability. Managers of corporations should not be more accountable to stakeholders than they are to shareholders or principals. But I am not against using the concept of stakeholders as a useful PR planning tool for engagement with a corporation’s audiences.
I agree with all that Heather said in her comment.
João, it has been a great discussion – thanks!
In the light of Heather’s input to the discussion, I would like to bring up the role of Internal Communications in establishing ‘Democratic Innovation’ in organisations. To engage employees and help top management through this economic crisis, everyone will have to be able to think and talk along and come with new and fresh ideas. Internal Communicators need to provide inviting and open channels and instruments to allow a healthy flow of ideas and get people to listen to eachother and help the organisation to innovate and climb out of the negative spiral of bad figures and redundancies. So, less corporate speak and strategy, but more action.
Brigit Law
Storyteller
Brussels
Paul, for many years (without question) the concept of “shareholders” did rule in corporations. But the tide has been turning of late. (Canadian) Professor Henry Mintzberg has been arguing for years that company’s must return to interaction with various stakeholders (including employees). I have a paper he wrote, Beyond Selfishness, which argues this way. (I’ll send you a link to an online version; fascinating reading.)
I’d also point out that the Edelman Trust Barometer indicates a movement to stakeholder (over shareholder) relations, too. In all sectors, not just government and NGOs. I had the privilege of hearing Richard Edelman speak in Toronto in February (specifically on Canada Findings) and he spent a great deal of time on stakeholder relations.
I do admire your passion and commitment to debating the issue, though. And now you have Toni’s love to boot–that’s a significant accomplishment!
From today’s announcement by Nestlé: According to Nestlé Chairman Peter Brabeck-Letmathe, “the financial crisis which has resulted in the current deep recession revealed once more a basic business axiom: if you fail to work on behalf of the public interest and take shortcuts that place the public at risk, you will also fail your shareholders. We believe that to have long-term business success you must simultaneously create value for shareholders and for the public. At Nestlé, we call this Creating Shared Value, and it is the fundamental principle behind the way we conduct business at Nestlé.”
“At Nestlé we recognize that our success depends on creating value for people – from the farmers who supply our products, to our employees, to our consumers and the communities where we operate”, said Nestlé Chairman Peter Brabeck-Letmathe.
I would agree with this view and see it as an and-and situation. Shareholders and Stakeholders relations are interrelated and equally important.
Very interesting debate. Thank’s for initiating it Joao!
Brigit, thanks for participating and for a very insightful quote. At the conference I was impressed by a quote from the 60’s from Sodexo’s founder in which he mentioned that he had started his company as a community with key stakeholders. Today it has 350 thousand employees around the world. I guess this has to do with what Judy mentions.
I think your point about “Democratic Innovation” connects with the potential that internal communication has to manage change management programs and (nowadays even more) knowledge management programs. This is clearly about action!
Thanks again to all for participating. I think this reflection makes us think that there are many ways to be sucessfull but over the long run those organisations who can balance the interests of the different stakeholders have a competitive advantage to which PR can decisively contribute. As Paul and Toni rightly put it, stakeholder’s importance (including also shareholders as a type of stakeholders) is a situational concept and varies with the specific context.