FOCUS: CHANGE MANAGEMENT - Change comes from within. In times of flux the ability to maintain two-way communication with employees can be the spur that truly drives a corporation forward. Nick Purdom reports

A recent survey paints a pretty black picture of the effectiveness

of internal communications and change management in British

organisations.

The Buy-in Benchmark, a survey of 350 managers and staff in UK

organisations employing 1,000 or more people conducted in August by MORI

for the Marketing and Communication Agency (MCA), found that only nine

per cent of staff felt their views and participation were valued.

’Our research has identified that there is a dynamic that

disenfranchises staff which is threatening the future viability of some

of these businesses.

Very simply, people are not being listened to and action is not being

taken to market to the internal customer - employees,’ says MCA

chairman, Kevin Thomson.

MCA’s research shows a direct link between good communications and

strong buy-in. The effectiveness of communications in their

organisations was given a mean score of just six out of ten by

respondents. This matches the findings of MORI’s Communications Survey,

1997 Omnibus, which showed that the effectiveness of communications has

not improved in the last 27 years. But MCA says that if this score was

to increase to eight out of ten then levels of buy-in could effectively

be doubled.

Significantly, the survey also reveals that buy-in has a bottom line

impact on performance. Of respondents with a high buy-in to their

organisation, 48 per cent said it greatly improved their performance,

and a further 35 per cent that it slightly improves it.

If the effectiveness of internal communications in many organisations in

the UK is low, then at least the problem is recognised, according to a

survey conducted by Countrywide Porter Novelli (CWPN) in September.

CWPN’s report, The Future of Internal Communications, is based on

interviews with 35 FTSE 1,000 companies and finds that 68 per cent of

those surveyed were planning to increase their spend on internal

communications over the next three years, with 11 per cent expecting to

increase spend by 50 per cent or more.

Organisational change was cited as one of the main reasons for

increasing spend. One respondent stated simply: ’Change within the

organisation equals more communications which equals increase in

budget.’

A heartening 85 per cent said that internal communication is very

important during organisational change, and 82 per cent said that it is

very important during mergers and acquisitions. With high feelings of

discontentment among employees, the latest buzzword being used by change

management gurus anxious to rectify the problem is ’involvement’.

’The biggest trend we are seeing is the increasing number of

modern-thinking managers who are committing time and resources to

involving employees directly in developing vision and strategy for the

business.

’The logic is that they are closer to the customer and market and very

realistic about what is needed and what will work,’ says Helena Memory,

director of communication and change consultants Hedron.

Innovative ways to encourage involvement are now being developed by

change management consultants. ’We’re involving people much more in the

process of change and trying to do so in a way that enables them to have

fun in the process,’ says Mike Pounsford, managing director of Banner

McBride.

’For Compass, a big catering organisation with 30,000 employees in the

UK, we needed to help managers understand the impact of technology on

staff and on the client service they could offer,’ he says. ’Rather than

push this through workshops or presentations, we designed a business

game which made the whole process much more interactive.’

When Eagle Star was trying to introduce a new brand, Banner McBride

designed a ’graf-fiti board’ which was put up in Eagle Star’s offices.

Employees were invited to write suggestions for change on it and give

ideas to managers.

’There is a common theme in our work which most companies ignore and

that is to appeal to the emotions as much as to reason,’ says

Pounsford.

He gives another example involving TNT which launched a new brand

worldwide in April and had to ensure that its 55,000 staff understood

the brand and the implications for them. ’We felt strongly that before

we gave the logical reasons we had to engage employees emotionally,’ he

says.

One of the solutions was surprisingly simple. Traditionally, managers

had been given models of company vehicles, which came to be seen as

status symbols. Banner McBride recommended that all employees were given

the vehicles. ’This had a huge impact on their emotional involvement,’

says Pounsford.

Once emotional involvement had been gained the company was able to start

to put forward rational explanations to a more receptive workforce.

British Airways World Cargo, working with management consultants Smythe

Dorward Lambert, is more than three years into a business re-engineering

programme.

’Having gone through two years of open and honest communication with

some fairly tough messages we wanted to move on to energise our people,’

explains communications manager, Angela Paterson.

Since June BA World Cargo has been staging an exhibition called Vision

to Reality which gives employees the opportunity to find out what the

company will look like in the near future.

Employees are taken around the exhibition in groups of six and their

three- hour tour culminates in a half-hour session with senior managers

in which they have the opportunity to debate and disagree with them.

The final stage in their vision to reality journey is the commitment

room in which they have the opportunity to write on the walls what their

commitment to the new business is.

As change management becomes a more involving process, responsibility

for the process is shifting.

’The change team at the centre is concerning itself with setting up

guidelines and frameworks for change and spending a lot of its time and

effort communicating goals and defining the licence managers will have,’

says Smythe Dorward Lambert director Colette Dorward.

’Managers are being invited to work in different cross-function

groupings and being allowed to discuss what needs to happen to effect

change.’

According to Thomson, different sectors of the organisation are becoming

involved with internal communication. ’We’re starting to see human

resources, PR and marketing merging and becoming responsible for

capturing hearts and minds inside and outside the organisation,’ he

says.

Countrywide Porter Novelli’s survey confirms that internal

communications are enjoying a higher profile. ’Internal communications

are increasingly being seen as a strategic business tool to give

competitive advantage,’ says CWPN senior consultant Keith Bartlett, who

worked on the survey.

Half of those questioned by CWPN said they felt internal communications

played a more important role in their company’s business than

advertising.

The key role internal communications plays in change management may now

be recognised, but only 15 per cent of the organisations questioned by

CWPN had a dedicated in-house department for managing internal

communication.

Sixty-four per cent used an external consultancy in partnership with an

in-house department.

’It’s the business drivers which invariably initiate the need for

change, and once the decision to change has been taken, there is input

from other functions. It’s very rare that someone in communications is

responsible for change management, but they do play a crucial part in

development and implementation,’ says Bartlett.

A good model for managing change, believes Bartlett, is that adopted

during the merger of Lloyds and TSB when one person took sole charge of

the process.

’Rather than just handling the logistics of implementation and

evaluating the business implications, a large part of their role was

selling the idea to staff so they got buy-in,’ he says.

Capturing the hearts, as well as the minds, of employees is now a very

important part of what successful change management is all about.

LEADERSHIP: Teaching top level staff to talk turkey

Senior managers play a crucial role in communicating change, yet all too

often they are given no formal communications training. ’A lot of

managers take communication for granted,’ says John van Maurik, managing

consultant at training company PA Consulting Group. ’They make

assumptions that the basic message is getting across.’

The problem is that all too often, particularly in high-pressure

situations such as organisational change, it isn’t. Fortunately, it

appears to be a problem that more and more organisations are

recognising. Van Maurik reckons that about half the training programmes

PA runs now cover change management. That means the company is now

training around 2,000 senior managers a year in how to manage change

better.

’There’s been a noticeable increase in demand for this kind of

training,’ says van Maurik. ’Companies are saying, ’we want management

development training in the context of the changes affecting our

business’.’ PA offers an open course called Leading Change Strategy into

Action, as well as in-company courses that include many of the same

training elements.

One of the main aims of the training is to get managers to look at their

leadership style. ’A lot of people don’t realise the difference between

leadership and management,’ van Maurik says. ’Management is about

managing processes and getting results, while leadership is about

working with and motivating people, having a sense of direction and

moving ahead.’

Van Maurik has a mnemonic, WIST, which he uses to sum up the attributes

needed by good change managers. W stands for wisdom, I for integrity, S

for sensitivity, and T for tenacity. PA’s courses attempt to make

managers aware of these desirable qualities, and to help them to develop

them.

For example, managers are taught to be sensitive to people’s reaction to

change and to recognise the half-communicated messages they may be

sending back.

Specific communication techniques are also covered. Managers learn to

appreciate the power of body language and of particular words, and how

to ask questions effectively so that assumptions can be tested.

But can all managers be taught to communicate well? Van Maurik

recognises that some people are better communicators than others, but he

says the courses can help senior managers recognise that good

communication during change is a necessity.

’Senior executives who are not the most brilliant communicators should

work with other people who are better at it,’ he suggests.

CULTURE SHOCK: Maintaining continuity after a merger

’I have always believed that the myth that you could not combine

cultures in the PR agency business needed testing,’ says chief executive

of the Ketchum Group in the UK, James Maxwell.

In 1996 Maxwell had the opportunity to test the myth when

Scope:Communications was acquired by Ketchum. Maxwell says he learnt

from the unsuccessful merger between Durden Smith Communications and

Shandwick in 1980, which ended with the Durden Smith team walking out

within a year, along with most of their clients. ’Nobody spent time

talking to them as individuals, understanding what their fears or

concerns were about the merger, or trying to explain what what the

benefits of the deal were for employees,’ he says.

When it came to merging Scope with Ketchum, Maxwell was well prepared

for the challenges that lay ahead. ’When we announced the merger we

spent a great deal of time with the Scope team promoting the benefits of

being part of a multi-national group, with greater investment in

technology and training, and a bigger stage on which to play.’

Ironically it was the Ketchum team of 22 people who felt like they were

being acquired by the Scope team of 60 people. ’The acquiree feels

threatened and insecure.

These are not fears you can allay quickly, and certainly not in one

meeting,’ comments Maxwell.

A daily bulletin was issued during the acutely sensitive first four

weeks of the merger (subsequently going weekly) carrying news of

restructuring, best practice from both sides, and updates on office and

technology developments.

This bulletin was able to voice concerns expressed in ongoing one-to-one

meetings between board directors and other employees.

’Every day we would take the pulse of the merger,’ says Maxwell. ’It was

apparent who had immediately bought into the opportunities presented by

the enlarged business, and who was feeling dislocated from it. In most

cases, through frank dialogue, we were able to solve most of the

problems that people had.’ Many of these problems were relatively minor,

such as office hours and canteen hours.

In May this year Ketchum embarked on another merger, this time with

consumer agency Life PR. Jane Boardman, formerly director of health and

beauty at Life PR, rejoined as managing director of Ketchum Life. After

the success of the Scope Ketchum merger many of the same techniques have

been used to try to effect a similarly satisfactory outcome.

’The measure of success of both mergers has been on two fronts: employee

retention and morale, and client retention and satisfaction. On both

counts, the first merger between Scope and Ketchum was an unparalleled

success,’ says Maxwell. Only two members of the Ketchum London team

left, and no clients from either side resigned. Employee and client

satisfaction surveys carried out in November 1997 showed a 94 per cent

level of motivation amongst employees, and over 90 per cent client

satisfaction with service levels and professionalism.

Ketchum Life is still in its infancy, but the signs are good. There have

been no client resignations, and although some junior staff have left

the senior management team remains intact.

TECHNOLOGY: The role of electronic mail in communications

Electronic communication, particularly in the form of e-mail and

intranets, has provided a powerful new tool for internal communications,

but not everyone agrees it has been beneficial. ’Technology has failed,’

states MCA chairman Kevin Thomson emphatically. An MCA study among 20

top technology companies showed that technology doesn’t improve

communication, and Thomson says ’IT people are dropping intranets like

hot potatoes’.

But he still believes intranets have a future, provided they are used as

’involvement technology’.

Mike Pounsford, managing director of Banner McBride, envisages a much

greater role for technology in communications. ’Technology is helping

people share information across a business,’ he says. He sees e-mail

replacing traditional paper-based communication, and intranets being

used more extensively so that employees are given more responsibility

for finding information.

’Ten years ago communication was top-down or bottom-up, but now with the

help of technology it’s lateral as well,’ he says.

Technology has a very specific role to play in internal communications

says Harvard group PR director, Gareth Zundel. ’Intranets and e-mail are

a perfectly satisfactory communications medium in terms of being used

for a follow-up memo once staff have been spoken to in person,’ he

says.

’Because it is so easy to use, maybe a little too much has been done by

e-mail. But in the last year or so people have come to remember the old

values, and there is no substitute for face-to-face meetings.’

Hedron director Helen Memory has similar theories about the best way to

use technology. ’In the best companies technology is now limited to the

transmission of basic information that does not need discussion to be

understood by employees,’ she says.

At BA World Cargo e-mail is currently used to update managers on the

weekly business meetings between the managing director and the staff who

report directly to him. This information is then used by managers to

brief their teams. ’Partly because of the global spread of our business

we use e-mail a lot,’ says BAWC communications manager, Angela

Paterson.

Now the company is developing an intranet and considering the most

effective way to use this. ’Technology offers huge possibilities, but

there is the risk that it removes us from direct communication with

staff and colleagues,’ says Paterson. ’We are now looking at how we use

the technology available to support communications and move away from

simply communicating a process to building and developing commitment.’