FOCUS: INTERNAL COMMUNICATIONS - Sending out all the right messages/Effective two-way communication with staff helps to curb employee turnover levels, and creates a sense of loyalty and ownership which improves customer service

Placing value on employee feedback through a committed internal communications policy, may sound like 1990s psycho-babble, but many believe it has a direct impact on bottom line profits.

Placing value on employee feedback through a committed internal

communications policy, may sound like 1990s psycho-babble, but many

believe it has a direct impact on bottom line profits.

Employers who ignore staff feedback can find their employees’ initial

enthusiasm for the job or the company wanes and the best people leave to

join other companies.

James Harkness, Banner McBride’s director of consultancy, believes there

is a definite link between staff motivation and the effectiveness of an


’Those organisations which make a real effort through internal

communications to include the views of their staff will not only

increase their financial effectiveness, but retain staff longer,’ he


He believes this is especially true in the IT sector, which has a

traditionally high turnover of staff, who leave to set up on their


Banner McBride managing director Michael Pounsford recently worked on a

campaign for Lloyds TSB, which linked internal communications with the

bottom line. Following its merger, Lloyds TSB wanted to re-establish

itself in an increasingly competitive marketplace, which included

players in financial services, such as Virgin and Marks and Spencer.

’We knew that some branches were more effective in customer service and

others were average,’ says Pounsford. ’We wanted to know why there was

that difference, so we implemented a rigorous analysis of the branches

through staff feedback.’

The research showed there was virtually no difference in this feedback

between the branches, except in one area. Managers and supervisors were

viewed more positively in the branches that performed best.

’In practice, these managers were more flexible with staff and allowed

them to work across the three main areas of banking: business banking,

personal banking and operations, if there was a shortage of staff in any

one area. This strategy cut queues and improved customer service,’ says


Kevin Thomson, chairman of the Marketing and Communications Agency (MCA)

and president-elect of the International Association of Business

Communicators, believes that most businesses undervalue their workforce

and that traditional top-down internal communications do not work.

’Expensive internal communications systems don’t work because employees

feel management is talking at them and they have no means of response,’

he says.

Thomson believes companies should treat staff like customers. ’If you

look at the progress of external marketing, you’ll see it has gone from

the ’tell and sell’ of journalism to PR, to mass marketing, to niche

marketing, to database and finally to one-to-one marketing. But in

internal communications, we are still ’telling and selling’ with things

like company newspapers and memos. We should be using all the external

marketing tools and strategies like databases to target employees on a

one-to-one basis.’

Thomson has put down his thought in a new book entitled Emotional

Capital - capturing the hearts and minds to create lasting business

success. It includes case studies of work from companies including the

Royal Mail and Walkers Snack Foods. In his book, Thomson goes one step

further than most internal communications practitioners. He argues that

the commitment and motivations of employees are a company’s most

valuable assets and they should be capitalised on its balance sheet as a

tangible asset.

Harkness, of Banner McBride, believes that communications that begin

from the bottom can benefit many companies, for which the bottom line is

not necessarily the most important factor. Banner McBride has been

working on a re-branding campaign for Barnardo’s, the UK’s largest

children’s charity. Barnardo’s wanted to communicate its new message

both internally, to its 300,000 volunteers, and externally, to attract

new income from corporate sponsorship.

Harkness says that Barnardo’s believed it had an out-dated image, the

public equated it with orphanages and children’s homes - work Barnardo’s

had not been involved in for over 20 years.

’The brief was to review Barnardo’s existing internal and external

research, determine how people perceived the organisation and then to

identify a new position for the Barnardo’s brand,’ he says.

The Banner McBride team interviewed a range of managers, employees and

volunteers to ensure the internal stakeholders were involved in

establishing the revised brand and how it could be communicated in more

relevant and appealing way.

Once the new style guidelines were developed by the Barnardo’s internal

communications team, Banner McBride ensured they were communicated to

employees so the internal and external message were the same.

’This was achieved by developing a series of one day communication

events for all employees and volunteers across the UK. Nine events,

called ’B Live’ were held every three weeks in June and July 1997’, says


’Because the internal audiences were involved in developing the new

brand position, they are more likely to support it.’

Mike Rigby, managing director of Countrywide Porter Novelli’s Internal

Communications Group also puts enormous value on the feedback of the

employees of his clients.

’We believe we have to work on both a left brain (rational) and a right

brain (emotional) level. Our goal is to help companies build shared

values between companies and its employees. We employ a team of

psychologists to go into client companies and work with them. And we

audit what employees take out of the communications process, their

beliefs and awareness.’

Charlotte Wilcox, senior writer internal communications, Countrywide

Porter Novelli, says: ’The messages, values and philosophy a company

puts out externally should be the same internally and employees should

buy in to that message.’

She believes it is important to fuse together a number of different

departments to deliver an effective internal communications message.

’If it is left to marketing managers it can be tricky, because they see

their role as purely external and human resources staff aren’t

necessarily aware of the wider role of internal communications.’

Wilcox agrees that communication should be bottom up. ’Employees should

feel they have ownership and an effect on the operation of an

organisation. Companies should be seen to be acting on what they’re


She says the tools to achieve this include staff surveys, developing an

employee publication, focus groups and incorporating feedback mechanisms

such as questionnaires and contact boxes.

But not everyone agrees that taking on staff feedback automatically

increases profits. Anthony Goodman, director of Smythe Dorward Lambert

says there is no proven link between morale, motivation and output.

’The value of so-called ’emotional capital’ hasn’t been validated. You

may instinctively feel that it is important, but it’s almost impossible

to prove. I think the idea of putting emotional value on a balance sheet

is decades away from reality. If you look at the debate about brand

valuation, it has taken over a decade to get companies to understand

this, and it is still not accepted practice.’

Whether or not ’emotional capital’ becomes the buzz word for internal

communications in the millennium is as yet unknown. Thomson says: ’The

PR and internal communications practitioners have been traditionally

viewed as the touchy-feely sector. This new thinking takes us up the


It’s no longer just internal communications - it’s people



In 1996, the titanium dioxide industry was in the throes of the worst

trading conditions it had ever experienced.

ICI Tioxide, a global producer with 3,000 employees - spread across

sites in Western Europe, South Africa, the US and Asia Pacific -

introduced a two-year continuous improvement programme across its


Redundancies were inevitable and the company realised that an effective

internal communications programme was essential to guarantee employee

understanding and to reinforce its world leading position. Countrywide

Porter Novelli was employed to take on this task.

Countrywide launched a global internal communications programme under

the banner ’Beating the Best’. The strategy was to focus on the five

themes which were most important to the business - people, assets,

environmental performance, marketing and communications.

Countrywide’s first step was to organise a global senior management


Held in London, it was organised like a trade fair, with stands relating

to each of the five themes. Countrywide then produced a series of

videos, filmed at each manufacturing site and again reflecting the five


These were shown to employees, supported by briefing notes.

The consultancy’s next step was to launch a quarterly global employee

newspaper, entitled World Focus, produced in five languages. Countrywide

set up a reader panel to get feedback on the publication. It also

produced a corporate brochure and an environmental report.

Countrywide realised that a professional network of communicators was

essential to unite the global business. It installed a communications

manager at each site to liaise with the local media and corresponding

managers at other sites. One of Countrywide’s own employees was seconded

to ICI Tioxide to work as a communications manager for the European

business for a year. In addition, a crisis training programme was

introduced at each site.

Countrywide reviewed and evaluated its activities throughout its

internal communications programme. It also invited the Industrial

Society to carry out independent research into the effectiveness of the

programme. The results showed that 63 per cent of employees felt

well-informed about the business and its plans and 87 per cent

understood the ideas and purpose behind ’Beating the Best’.

Countrywide director John Orme says the best endorsement came from ICI

Tioxide’s newCEO. ’He joined a year into the programme and spent the

first six weeks touring Tioxide’s sites,’ says Orme. ’He said that he

was amazed at the level of understanding of ’Beating the Best’ from the

packing floor to top management.’


When a company is the subject of a takeover and has to change its name,

internal communications consultants face a unique challenge. Not only do

they have to ensure that staff morale levels remain high, they also have

to help employees accept their new identity and adapt to what may be a

very different corporate culture.

This was the challenge faced by Biss Lancaster when it was brought in to

manage the takeover of car hire firm, Eurodollar by American giant,

Republic Industries Automotive Division Europe. Both Eurodollar (for

business travellers) and its sister company, Alamo (leisure travellers)

were to be christened with the American name - National Car Rental -

creating the biggest car rental company in the UK. The task was made

still more difficult by a very short time scale: legal requirements

meant that Biss Lancaster had just two-and-a-half weeks to complete its


’It was a time of great change for Eurodollar employees,’ says account

executive, Alison O’Leary. ’They had to come to terms with a new brand

name and working for a bigger, global organisation. They perceived that

the culture would be very different because it was an American company.

Eurodollar staff and Alamo staff would also have to get used to working


Biss Lancaster’s first step was to organise a series of road shows

across the country for branch managers. Senior management gave

presentations about the launch of National Car Rental and each attendee

was presented with a pack containing colour copies of the new

advertising campaign ’Green means Go’. The pack also contained a leaflet

detailing National Car Rental’s history, a copy of employee Q&As drafted

by Biss Lancaster and an employee newsletter which included an

organisational chart.

Each branch manager received a personalised letter from John Leigh,

senior vice-president of Republic Industries UK, a branch list and a

copy of the company’s press release. Biss Lancaster organised screenings

of a video to help staff feel part of the new company.

On February 1, 1998, the day that Eurodollar became National Car Rental,

all employees received a folder containing a ’Green Means Go’ lapel

badge, a green pen, jelly beans and a z-card with the company’s mission


A dedicated e-mail address for staff queries.

O’Leary says the campaign was very successful. ’Staff are very positive.

They’ve discovered the National Car Rental culture is very similar to

Eurodollar’s. The volume of business has increased and the new company

is involved in many activities, including being the official car

supplier for the Grand National.’


When MCA was invited to work with Walkers - ’the number one producer of

salty snacks in the UK’ - the consultancy had the chance to put its

’emotional capital’ theories into practice.

Walkers aimed to be the ’best company in the UK’, the ’employer of

choice with the best staff’. It had a well-established internal

communication policy, but felt that its investment had not given the

expected returns in terms of employee motivation or business


’To avoid repeating our past experiences, we decided to work with the

Marketing and Communications Agency (MCA) in order to take a more

results-oriented approach to communication,’ says Emma Westcott, manager

of management development at Walkers Snack Foods.

MCA set up focus groups and conducted one-to-one interviews. It

discovered several gaps in Walker’s internal communication processes.

’We asked staff what they would change about communication and if they

wanted to be more involved,’ says Lorrie Arganbright, director at MCA.

’Our research found that there was not enough cross-functional

communication or enough feedback to senior management. There was also a

false assumption that people were only interested in their own jobs, not

in the whole picture.’

MCA instituted regular team meetings and trained a group of

communications ’champions’ who could in turn train line managers. This

removed the previous ’top-down’ approach by ensuring there was a

committed communication resource right across the organisation. It also

launched an employee newspaper to provide common information about

business developments and best practices to all employees.

Westcott says the new communication process has created visible business

benefits: ’Several times since its launch, we’ve been able to use the

process as part of an internal crisis communication, and it provided us

with a responsible and effective channel. We’re seeing teams finding

ways to improve quality, simplify work processes, satisfy their

customers more effectively, to save time and money and make our products

and service better.

’It’s amazing to see ordinary people at all levels and in all functions

go well above what’s expected to really improve the business. You can’t

ask for much more than that.’

Arganbright says MCA’s work for Walkers is a good example of ’emotional

capital’ in action: ’Walkers recognised that it could not use its

employees’ intelligence effectively if it did not take account of the

way they felt.

’Emotional capital’ is like petrol - you may have a top of the range

car, but it’s no good unless you fill it up with petrol.’

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