new litmus test for communication

W W W . W A T S O N W Y A T T . C O M

IABC/Charlotte

Communication: Overhead or Essential Service?

John FinneyCommunication ConsultantWatson Wyatt Worldwide

April 7, 2004

Presenting the results of the Communication ROI Study™

2 WATSON WYATT WORLDWIDE

Q: Pictured below are three lines and a circle representing a martini glass and an olive. What is the minimum number of lines you must move so that the olive is outside the glass?


A: Zero. By viewing the glass from another angle, the olive is already outside the glass


Inquiring Minds

By a show of hands…

Believe communication can positively impact the bottom line?

Think your CEO agrees?

How about your CFO?

Can tell me your company’s ROE?


Facts and Figures

Inadequate employee communication wastes 14% of every 40-hour work week

(Office Team Survey 1999)

Less than a third of employees think their companies communication practices are effective

(Watson Wyatt 2000 WorkUSA Study)

Companies that share information about the business with employees show a four times greater return to shareholders

(Watson Wyatt 2002 WorkUSA study)

57% of communicators rely on informal feedback

(2003 IABC/Towers Perrin “Future Trends” Study)


I Will Share:

The importance of measuring what we do

The latest Watson Wyatt research linking best practices in communication with higher shareholder value

Finney’s TOP TEN tips for value-added communication


Key Messages

Information is the currency of business today Communication adds value to the bottom line! Some communication practices add more value

than others Engaging employees in the business and changing

behavior are key The term “business communicator” is not an

oxymoron—it’s an expectation! What gets measured gets done!


“The greatest problem with communication is the illusion that it has been accomplished”

George Bernard Shaw


What do we usually measure?

Did you receive the information?

Do the materials attract interest and attention?

Has the message been heard? Understood?

Is the message believable?

Are you satisfied with the information/change?

Is management “walking the talk” (in the eyes of employees)?

Access to/preferences for different media


What should we measure?

Direct causal relationship between communication efforts and the bottom line

Alignment with strategic goals and objectives Whether employees are exhibiting desired

behaviors as a direct result of communication efforts

Factors that support or hinder communication effectiveness


Business Case for Communication

Today everyone is charged with delivering critical business information to key constituencies.

CEO’s are coming to recognize the importance of a formal communication plan as part of an organization’s business strategy.

In the absence of a formal, business-focused communication plan – it is not surprising that few organizations ‘value’ communication as a strategic business function.


High Performing Organizations are Getting the Message!


About the Communication ROI Study™

Survey sent in April 2003 to approximately 5,000 heads ofHR and Communication

Fortune 1,000 and Pension& Investment 1,000 clients

267 companies responded Builds on results of

HCI/WorkUSA studies What specific communication

practices add the greatest shareholder value?

Industry # of Firms

Industrials 46Financials 43Health Care 41Consumer Discretionary 35Materials 23Information Technology 19Non-Profit/Univ/Hospitals 19Utilities 19Consumer Staples 17Energy 3Not Identified 2

TOTAL 267


What we measured …

We defined an effective communication organization as one that excels at:

Providing individuals with financial information and objectives

Providing employees with information on the value of their compensation programs Engaging employees in the business Exhibiting strong leadership by management during organizational change Educating employees about organizational culture and values Explaining and promoting new programs and policies Integrating new employees into the organization Aligning employees’ actions with the customer

High

Top third

Medium

Middle third

Low

Bottom third


What we found

Communication is a business functionthat directly links to bottom-line results

Communication effectiveness is associated with a 29.5% increase in

market value


What we found


Over the last fiveyears, firms with

better organizationalcommunication

earned shareholderreturns nearly 50%

higher compared to firms that

communicatedless effectively


What we found


Firms that communicate most effectively are more

likely to report turnover rates below or significantly below

those of their industry peers than organizations that communicate less

effectively (51.6% vs. 33.3%)


The most effective communication goes beyond tactics and strategy to drive behavior change within the organization

What we found

KeyFinding!


The way you measure communication effectiveness matters

Organizations that use “hard” measures, such as productivity, employee behavior change, turnover costs and achievement of business goals will have a positive impact on ROI

Organizations that use only“soft” measures, such asemployee awareness,understanding or satisfaction actually have a negative impact on ROI

What we foundKey

Finding!


We found 9 communicationpractices that have a direct linkto increased shareholder value

Creating a clear line of sight between your business goals and employees’ jobs, changing leadership behavior and having a formal process provide the greatest return

What we found


Awareness

Action

Understanding

Acceptance

Commitment

EFFECTIVECOMMUNICATION

DRIVESSUPERVISORS’/

MANAGERS’BEHAVIOR

CREATESEMPLOYEE

LINE OFSIGHT

FACILITATESCHANGE

FOCUSES ONCONTINUOUS

IMPROVEMENT

CONNECTSTO THE

BUSINESSSTRATEGY

FOLLOWS AFORMALPROCESS

USESEMPLOYEEFEEDBACK

INTEGRATESTOTAL

REWARDSLEVERAGES

TECHNOLOGY

BEHAVIORAL

STRATEGIC

FOUNDATION

Hierarchy of effective communication


Finney’s Top 10 Finish

10. Determine if your communication practices are old school or new age

9. Increase your business acumen

8. Include “It’s Your Business” articles in company communication to improve line of sight

7. Attach a communication plan for key business decisions/changes

6. Be ‘hard’ on yourself and link your success measures to business outcomes


Finney’s Top 10 Finish

5. Link changes to employee survey results—all year round.

4. Talk to a 14-year-old about your quarterly results/business goals

3. Train and reward managers for effective communication

2. Decide how you are going to behave differently to enhance your value to the organization

1. Focus on “outcomes” vs. “output”

W W W . W A T S O N W Y A T T . C O M

IABC/Charlotte

Communication: Overhead or Essential Service?

John FinneyCommunication ConsultantWatson Wyatt Worldwide

April 7, 2004

Presenting the results of the Communication ROI Study™

new litmus test for communication

Technology

business function

iabccharlotte

business goals

essential

bottom line

directly links

found communication

communication