INTERNAL COMMS: In the event of an economic downturn...

With recession on everyone's lips, good communication to nervous staff is vital. Mary Cowlett looks at the right and wrong ways to achieve it.

Prudential: low morale after 2,000 jobs axed
Prudential: low morale after 2,000 jobs axed

Should economic downturn hit the UK, conventional wisdom says internal comms skills will be in high demand.

In January, Weber Shandwick CEO Colin Byrne told PRWeek: ‘Look for upsides, not just downsides. How can your internal comms practice, if you have one, support your client if it is downsizing - even if it has not needed that service before?'

Pleon CEO Jennifer Helfer stated a similar view in a letter to the magazine last month, urging agencies to adapt in order to survive: ‘In recessionary times, effective internal comms are critical to maintaining employee motivation. Clients will want to re-engineer comms structures to do more with less too.'

The latest labour market outlook survey from the Chartered Institute of Pers­onnel and Development, published last month, shows that almost two in five (38 per cent) employers are
plann­ing redundancies this qua­rter. This can be seen as pragm­atic. But many on the consult­ancy side of the int­ernal comms business admit that economic uncertainty brings
opportunities.

Some PR firms are ready to cash in. Both Weber Shandwick and College Hill have recently invested in an internal comms offering (see box, p27). Meanwhile, one industry insider reports rec­eiving four separate six-figure salary offers from agencies looking to set up internal comms prac­tices over the past nine months.

In-house, where much act­ivity takes place under the radar - through the marketing or HR functions - the situation is less clear. ‘The sector has matured quite rapidly over the past two to three years in terms of its focus,' says Lee Smith, dir­ector of Gatehouse Consulting and one-time head of internal comms at Ernst & Young.

‘But the way that the sector is resourced has changed. This means that the interim and temporary markets are buoyant at the moment, but demand for permanent internal comms professionals is quite slow.'

Others insist any organisation that starts thinking about how to harness its people when troubles loom has already left it too late.

‘Certainly, we do start to earn our money when times are tough, but it is not a case of feast or famine,' says James Allen, who heads up a team of 24 dedicated internal comms staff at mob­ile operator O2.

‘Internal comms is alw­ays important and if you have given clarity of direction, been open and honest and taken people on the entire journey, you are in a much stronger position when you say "Right, now let's pull together and rise to this challenge".'

However, recent doom and gloom media stories about the financial markets and the consumer crunch present a grim picture for nervous staff.

Couple this with news that some 1,000 staff at Yahoo are being laid off - with probably more to follow - and rumours that up to half of Northern Rock staff may be sacrificed to post-nationalisation, and it is no wonder that workforces are worried.

‘There are two sides to communicating with employees when times get tough,' argues Nick Wright, director of Fishburn Hedges' internal comms practice. ‘On the one side, there is the opportunity for the leadership to demonstrate confidence in their business and keep people informed of plans and performance.

This becomes doubly imp­ortant if employees are reading negative stories or rumours in the med­ia. Then there is the hands-on, frontline role around redundancies, relocations, takeovers and bad results. Both require a slightly different skills set.'

Internal comms professionals stress these skills are difficult to bolt on to an existing PR offer, particularly where financial disclosure and HR legislation is involved.

While it is almost impossible to get the logistics and timing of disclosing bad news to staff 100 per cent right, there are some real horror stories. These range from employees hearing they face redundancy over the radio, to the comms gaffe of one organisation informing staff their number was up by calling them into the manager's office one by one over the public address system.

Notoriously, in 2003, now-defunct claims company Accident Group dismissed 2,500 staff, del­ivering the news to some by text.

‘It is about treating audiences as adults. Some organisations think their employees will not be able to cope with bad news, but what people really hate is uncertainty,' says Paul Massie, head of marketing and comms at Serco and chair of the CIPR's internal comms group, CIPR Inside.

Likewise, Scott McKenzie, senior change and internal comms consultant at Hill & Knowlton, warns of ‘survivor syndrome' among employees. ‘Companies not only need to look at the functional process of how they are going to implement red­undancies, but also at the emotional element of tackling the guilt of those that remain and re-motivating them,' he says.

The experts advise that if bad news needs to be delivered, it should be done quickly, preferably face to face by senior management, and with messages that are clear, timely and honest.
As Andrew Worlock, director of

Weber Shandwick's internal comms operation Inside Edge, says: ‘External PR tends to be about putting a positive angle on circumstances. Internal PR is about the good, the bad and the ugly.'

There are still places for PRWeek's int­ernal comms conference on 17 April. Visit prweek.com/uk and click on ‘events' for more details

CASE STUDY: PRUDENTIAL
In the first six months of 2001, Prudential's share price fell by 30 per cent owing to caps on stakeholder pension charges and government inquiries into the insurance industry. In a bid to cut costs the firm axed 2,000 sales jobs, which had a huge impact on staff morale.

It became critical for the then European CEO, Mark Wood, to win back the understanding and loyalty of the entire workforce if the company was to move forward positively.

Prudential turned to Involve, an employee involvement specialist, to boost staff confidence.
Involve set up an ‘active conference', travelling to three countries in three days with the aim of lifting morale among the 10,000 employees and gaining their understanding of Wood's strategy.

Using involvement techniques, employees were challenged to think about the benefits and threats facing the company, and come up with their own ideas for improvements and cost savings within five key themes.

These ideas were then turned into an exhibition, which was used as a road map for the company's future strategy.

‘The main reason why the Prudential roadshow was so effective was because it directly involved the employees,' says Involve partner, Lorne Armstrong. ‘Staff were able to put difficult questions to the CEO and his board and have them answered live. This created a high level of open, honest dialogue and ultimately trust, which was crucial at this time of uncertainty.'

CASE STUDY: Hewden
Last year, the UK's largest plant hire firm for the construction industry, Hewden, embarked on a £14m change programme supported by its PR agency Kinross + Render. The aim was to improve service standards, introduce a new IT system and rationalise business processes.
As part of this strategy, the organisation divested itself of two non-core businesses involving some 1,200 staff at UK sites.

Annette Gann‘We followed the principles of tell it all, tell it first and tell it fast,' says Annette Gann, group comms manager for Hewden's parent company Finning. ‘As always, it was important to be open and honest, to be upfront about what was still unknown and not to make any attempt to gloss over negatives.

Wherever possible, Hewden directors and line managers communicated sensitive or important information face to face and information updates at regular intervals.'

The programme had three distinct parts, with divestment comms undertaken using a number of already established channels. These included customised team briefings, switching on of sites with all of the key information and a Q&A facility as soon as investor announcements were made.

Further support was provided by telephone hotline, staff extranet and magazine, plus noticeboard materials and a Fast Facts e-bulletin. Staff submitted more than 600 questions, with answers published quickly on the intranet and communicated via team leaders and email.

After the announcement, a follow-on ‘Need it? You Got it' campaign was devised to revitalise the business. Tactics included internal and external advertising, fun virals and a rallying conference. Staff at depots received ‘information hampers' with celebratory goodies and a branded strategy document was sent to every employee's home.

The final phase, the implementation of the new IT system, was supported through all internal comms media and 56 specially trained employees, who provided 3,500 man-hours of hands-on instruction.

‘A professional internal comms programme, which reflects the same high standards that you would apply to important customer comms, demonstrates to staff that management not only knows what it is doing, but that it also cares,' says Gann.

INTERNAL COMMS - Some Agency Solutions
Financial Dynamics
Change comms practice launched in 1999, led by managing director Mark Thompson. Currently six dedicated consultants. Clients include RHM, Mondi, Maersk, Smith & Nephew, Actavis and Frimley Park Hospital.

Fishburn Hedges
Practice launched in 1998, led by board director Nick Wright. Currently six staff. Clients include the NHS, National Express Group, BT and Scottish Widows.

Gatehouse Consulting
Launched in 2006, led by directors Lee Smith and Simon Wright. Currently five dedicated staff bring in £350,000 to £400,000 per annum. Clients include Aviva, Ernst & Young, American Tobacco and the Information Commissioner's Office.

Hill & Knowlton
Practice launched in 2000, led by managing director David Ferrabee. Currently 12 London-based staff, with clients including BP, HP, HSBC, Microsoft and Shell.

Instinctif
Launched in August 2005, led by managing director Nic Pearce. Currently 12 staff. Clients include Reuters, Sky, The National Trust, RBS and UBS. Joined the College Group in November 2007.

Involve
Firm launched in 1996 as Eventworks, led by managing director Jeremy Starling. Currently 30 staff. Clients include AXA, Coors, GE, GSK, ING, Mars, LV (formerly Liverpool Victoria) and RBS.

Weber Shandwick - Inside Edge
Practice launched in August 2006, led by director Andrew Worlock. Currently four dedicated staff. Clients include Computer Associates, Dow Chemical Company and Schneider Electric.

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