WORKING WITH THE WORKERS: Two years ago, General Motors transformedits internal comms department to help employees understand where theyfit in

Gary Grates wants General Motors plant managers in a factory outside Buffalo, NY to know where they fit in the global economy. Steve Harris thinks it's equally important that their counterparts in a Flint, MI plant understand why GM has seen its market share in some segments of the car market erode in recent years.

Gary Grates wants General Motors plant managers in a factory outside Buffalo, NY to know where they fit in the global economy. Steve Harris thinks it's equally important that their counterparts in a Flint, MI plant understand why GM has seen its market share in some segments of the car market erode in recent years.

These ideals are part of an internal communications plan the two men have spent the last two years shaping at GM. Their goal is to supply GM workers with as many answers to questions that start with a "why as answers to questions that begin with a "how."

Harris, VP of communications for the automotive giant, has relied heavily on an outsider, Grates (an internal communications specialist with GCI Boxenbaum Grates), to develop an employee communications program designed to give every employee a better idea as to where they fit in GM's long-term strategy.

Grates and Harris envision GM plants and facilities where employees not only understand their everyday duties, but also how management's goals and targets for each plant are specifically designed to answer the tough demands of the automotive marketplace.

Employees in the know

Grates - who is based in New York, but often spends three days a week in Detroit at GM headquarters - has given this vision of internal communications the informal tagline, "A line of sight to the marketplace. It's a phrase he intones repeatedly with a fervor that makes it seem like he is saying it aloud for the first time.

"What we've tried to do is develop a process that envelops GM employees with information about what's happening in the market, as well as what GM's response is and what it means to each local facility, says Grates.

"Someone at a plant in the suburbs of Buffalo understands how what happens at that plant feeds into the marketplace. It allows the employees to know how they fit in."

Harris says attempting to give employees a clear understanding of their role is something GM did not focus on until the last two years. That acknowledgment likely comes as no surprise to anyone familiar with the labor strife that has plagued the industry in recent decades.

"It's all about giving our employees a context of where their jobs relate within GM, within the auto industry, and within the global economy, says Harris. "It's a dialogue we never had with our employees until now, and it's a way to provide meaning to GM's overall strategy so each person can understand his place within that strategy."

Part of the goal is to mold a workforce that can readily accept and expect change because they understand why specific changes have occurred - and are perhaps even equipped to anticipate future changes.

According to Grates and Harris, GM employees can now look forward to regular information and briefings on such things as industry trends and competitors' strategies. They can also expect information about how changes in the macroeconomy might reverberate in the automotive market and affect GM - and, in turn, its workforce.

Peter Fleischer, head of the internal communications practice at Ketchum, believes this is crucial. "Of course people want to know the specifics of how to do their jobs, he says. "But good internal communications is also about the larger picture, such as where the company's going and what management's responsibilities are - it's as much about context as content."

Harris says the end result should leave GM with employees that are no longer just cogs, but have been been transformed into a potential resource because of their new understanding of how what they do feeds into the automotive marketplace.

"This isn't only about employees feeling good, says Harris. "Don't get me wrong. We want them to feel good, but we want them developing an actionable plan about what they can do themselves to make GM a more successful company."

It is a communications strategy more companies seem to be embracing.

"The strategic part of internal communications has to be more about aspirations - it's a communications model largely based on the future," says Bill Margaritis, SVP of corporate communications at FedEx, a company that has invested heavily in internal communications in recent years. "It's working toward a desired result, and motivating your people to join you there."

Low staff morale

When Harris started rehabbing GM's internal communications, he knew he had his work cut out for him. It was 2000, and he had recently been appointed SVP of corporate communications for the largest automobile manufacturer in the world. Yet the job itself was not the cause for his concern; it was the result of a recent employee survey.

"Rick Wagoner (GM CEO) had expressed some frustration with the results of some survey work we had done among GM employees, Harris says. It turned out that GM was not getting the job done when it came to internal communications. The survey demonstrated that many GM employees did not understand where the company was going, or how they fit into the automotive giant's grand scheme. Subsequently, morale was low.

While such results would be a clarion call to most companies, for the leadership at GM, the results had to cause particular concern. About 18 months earlier, the company had suffered through a debilitating strike that saw production grind to halt at two plants in Flint, MI. The strike crippled North American production, and caused the company's 1998 Q2 earnings to fall by an eye-popping 81%.

Harris turned to Grates to help reengineer GM's internal communications program for North American operations.

Communicating to the employees at GM is no small task. The company has 90 facilities in North America alone, and a staggering global workforce of 365,000 (a population roughly equal to that of Minneapolis).

Harris concedes that GM's bureaucracy, various brands (from Cadillac to Buick to Chevrolet), and geographic sprawl has led to a sense of detachment of workers throughout the years. Some plant employees are as likely to say they work for Chevrolet as for GM.

"GM has historically been a group of very independent, separate organizations with a very loose, central control, says Harris. "Although we have gotten a little more centralized over the years, it's only recently that we have talked as GM, even internally."

Among the first things Grates and GM did was to hire full-time internal communications professionals for each of its 90 North American facilities - referred to within GM as business communications integrators. The integrators are the company's main liaisons to local plant leadership and the union.

"They're our troops on the ground, says Harris.

The integrators are charged with making sure that employees within a facility know and understand the goals of that facility. The integrators also organize meetings with plant leadership - and the rank and file - where discussions touch on things like GM's financial performance, business goals, and long-term strategy. Although each integrator is charged with a series of informational meetings at their facility throughout the year, there are specific gatherings to discuss quarterly and annual financial results. The integrators are also charged with producing a plant's newsletter and maintaining intranets.

Beyond the integrators, the company has attempted to increase its points of contact with its employees. Sometimes the increased contacts can straddle the Orwellian. Last month, GM began running three-minute cablecasts on monitors throughout each of its North American facilities. A new video segment greets employees each day that covers issues ranging from events at GM, to happenings in the automotive marketplace to discussions of the macroeconomy. The segments are run hourly in what is being called a pilot program.

Other points of contact are subtler, such as cafeteria lunch trays that detail GM products.


The success of such internal communications efforts, however, can be difficult to quantify. Outside of employee surveys, much of the measurements are purely anecdotal.

"We get a tremendous amount of feedback from attending the regular employee meetings (coordinated by the internal communications staff)," says Harris.

"All of us try to attend one of those a month. So as those hundreds of meetings are going on each month, we're getting feedback about what they like and don't like, and what's getting across."

To Grates, measuring the effectiveness of internal communications comes down to basics.

He says that since GM began its revamped internal communications program, it has seen marked increases in production safety and quality - two performance measurements that the company tracks monthly.

"Each facility is given a set of goals to meet every month, says Grates.

"If those goals are being met, then communications deserves a share of the credit. If they're not being met, then we deserve a share of the blame."


The vast majority of employees at GM will never interact with a customer, but in a services-based company, a large slice of employees will interact with customers on a daily basis. And the internal communications issues can differ greatly.

FedEx is an example of a consumer-focused entity that has concentrated heavily on internal communications in recent years. Besides earning a spot on the Fortune's "100 best places to work list, FedEx says its internal communications efforts give it a chance to better manage the customer experience.

"We've made our employees ambassadors of the brand, says Bill Margaritis, SVP of corporate communications. "We did that because we have so many employees that touch the customer - from our couriers to our customer-service agents. Margaritis also thinks employee communications in a service-oriented firm can be used as a peephole on the customer experience.

"Probing the opinions of the portion of your workforce that interacts with customers is important because you can correlate that data to customer research and locate the gaps and opportunities, explains Margaritis.

"For example, our marketing people survey our customer base quarterly on different aspects of their experience with FedEx. We find it interesting to ask our employees the same types of questions, and then compare how employees see their interaction with customers versus how our customers view them. Employee communications can also be critical to maintaining a consistent customer experience - especially as a services firm grows by acquisition.

"We like our employees to know what our brand attributes are, including the vision and values of the company, says Margaritis. "So, when we made some acquisitions and the new employees started wearing the FedEx uniform and selling the FedEx service, it was important that we made sure they understood the value of the culture and value of the brand. We didn't want any gaps in what we promised and what we delivered."

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