How to Sell Internal Communication to the C-suite
By Laura Konsorada, Marketing Manager at DevFacto Technologies
Business speaks the language of numbers. Key financial indicators like sales, revenue, expenses, profit, loss, share price and margins traditionally dictate the decision making process at the executive table.
In recent years, however, another set of key indicators have come into play that measure intangible value-drivers. Employee engagement and advocacy, reputation, brand awareness, customer loyalty and trust have become valuable inputs that also contribute to executive decision making. Financial strength alone isn’t enough to drive success in today’s marketplace. With the growth of the modern, mobile, connected workforce there’s a strong argument for linking the behaviours of an organizations internal and external audiences, starting with happy and engaged employees, to the bottom line.
Happy Employees Create Happy Customers
In January 2017, 24/7 Wall Street published a special report profiling America’s most hated companies. Happy employees and happy customers are joined at the hip. You can’t have one without the other. Let’s look at the fall of a brand that everyone knows. Whether you live in the heart of America, small town Canada or Mexico City, Sears is a household name.
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The 24/7 Wall Street report said, “Sears department stores are disliked by both customers and employees.” Sears has nearly the lowest customer satisfaction rating of any department store reviewed in the American Consumer Satisfaction Index. Additionally, Sears employees give the company far lower than average marks on workplace review site Glassdoor, and fewer than one in three Sears employees would recommend a job with the company to a friend.
Once trading at over $170 a share, plummeting by 95 percent in the last decade Sears Holdings was trading at $4.11 on Nasdaq at this writing. Since 2010, Sears has gone from more than 3,500 stores 619 in the U.S. After filing for bankruptcy earlier this year, Sears Canada received approval to liquidate all of its remaining assets, closing 130 stores and laying off 17,000 employees.
Community expert, Scott Dobroski at Glassdoor said, “The risk when you have employees that are generally dissatisfied is that they are not willing to bring their best selves to work, to produce, to be engaged, and to fulfill responsibilities. When employees are generally satisfied in their jobs, we know that there’s a direct tie to the customer experience.”
The moral of the story: Treat your employees like they’re your platinum customers.
The Halo of Good Internal Communication
What’s any of this got to do with language of business and the value of internal communication? Good internal communication casts a halo across all business operations. At DevFacto Technologies, we believe that happy employees equal happy customers and there’s a path from well informed, engaged employees to customers, profit, value and reputation.
Providing they’re research based, numbers don’t lie. We thought we’d share a few insights about the value of internal communication that even the most skeptical senior executives can’t ignore:
Weber Shandwick’s 2016 report Employees Rising: The Next Frontier of Employee Engagement, concludes that “Employee engagement is central to company success and is the underlying foundation for high performing companies.” While leadership is key, internal communication influences engagement. Keeping employees informed and communicating frequently earned scores of 81 and 77 percent respectively, with an activism influence score of 70.
Edelman’s 2017 Trust Barometer shows that the credibility of peers (a person like yourself) in communicating information that people trust has dropped to 60 percent (-3) and is on par with technical and academic experts. Employees are sitting at 48 percent (-4 from 2016 results) while CEO’s have dropped even more from 49 to 37 percent.
Aon Hewitt says every 1 percent increase in employee engagement indicates a 0.6 percent growth in sales. Edleman’s review on the business impact of employee engagement said, “Applying this logic to a $5 billion company with a gross margin of 55 percent and 15 percent operating margin, a one percent increase in engagement would be worth $20 million – hardly pocket change.”
Let’s not forget the Towers Watson 2011-2012 Change and Communication ROI report that concludes, “Companies that are highly effective at both communication and change management are 2.5 times as likely to be high-performing than those that are not,” or their 10th anniversary report in 2013-14 that concludes, “Companies with high effectiveness in change management and communication are three and a half times more likely to significantly outperform their industry peers than firms that are not effective in these areas.”
The Tempkin Group 2017 Benchmark Study concludes, “Companies that outperform their competitors in both financial results and customer experience have more engaged workers. Compared to disengaged employees, highly engaged employees are almost five times more likely to recommend the company’s products and services, they are over four times more likely to do something that is good, yet unexpected, for the company, they are three times more likely to stay late at work if something need to be done, and they are over five times more likely to recommend an improvement at the company.”
Putting the Lesson into Practice
Clear, consistent, timely, relevant communication has a significant impact on business results. Communication informs, educates and engages employees by helping them understand where the company is going, how it’s going to get there and what their role is in contributing to success.
The world is changing. As business moves toward more remote workers, fewer desks and offices and Millennials, the first native digital generation, dominate the worldwide workforce, so too will the way we communicate change.
We invite you to play on the leading edge and discover what our state-of-the-art internal communication platform, Sparrow, can do for your organization by involving, engaging and motivating employees to be ambassadors of business.
Next time you’re in a position to talk with senior executives about the value of internal communication and how it contributes to business results, use the numbers to build yourself a strong business case that can’t be ignored.
Laura Konsorada, B.Comm., is the Marketing Manager at DevFacto Technologies, an I.T. consulting and product company based out of Edmonton, Canada. With responsibility for brand management, marketing programs and strategy, Laura enjoys working with diverse teams to cultivate fresh perspectives for delivering business results. As a recent appointment to the IABC Edmonton board, Laura looks forward to expanding her foray into the world of communications.