FOCUS: INTERNAL COMMUNICATIONS; Reaching out to lift staff morale

STAFF ASSETS: Shrewd employers are instilling company brand values in order to give staff a sense of identity CHANGING TIMES: PR, marketing and human resources are converging and IC consultancies are booming TECHNOLOGY: Intranets and e-mail ensure that employees are not the last to know about future directions

STAFF ASSETS: Shrewd employers are instilling company brand values in

order to give staff a sense of identity

CHANGING TIMES: PR, marketing and human resources are converging and IC

consultancies are booming

TECHNOLOGY: Intranets and e-mail ensure that employees are not the last

to know about future directions



In today’s commercial climate there is no such thing as a ‘job for

life’ so companies have begun to place a higher priority on talking to

staff, communicating changes and calming their fears. Rob Gray reports



Burson-Marsteller, that well-known perception management consultancy,

began the year by announcing that the BBC’s two top internal

communications staff would be moving into its fold this spring. The

Beeb’s head of corporate internal communication, Alaric Mostyn, and his

deputy, Melanie Lowe, will be charged with building a specialist IC

practice geared towards helping B-M clients improve communication with

their employees.



‘Internal communication is one of the areas of communications that’s

moving into the chief executive’s remit from human resources,’ says B-M

chief executive Alison Canning. ‘People are waking up to the fact that

it is central to what we do. This year and next year it is going to

boom.’



Key Communications would agree with those sentiments. Last year it set

up an IC division of its own headed up by Sue Sharp, and many other PR

consultancies seem set to follow suit.



Competition is intensifying in the IC consultancy market. But at the

same time the demand for external IC advice continues to grow. A number

of factors are at work here, with new technology at the forefront.



‘The demand for internal communication is higher than it used to be.

Within companies not only do people want more information, they want it

faster,’ says Dick Lumsden, managing director of Charles Barker’s

publishing division.



Companies have always given lip-service to the tenet that staff are

their most important assets. Now more of them are actually starting to

do something about it. The industry is entering an era of serious

dialogue with ‘stakeholders’.



In today’s commercial climate - where almost every day someone seems to

trot out the truism that there is no longer such a thing as a ‘job for

life’ - staff often feel uncertain about their long-term employment

prospects and crave information to set their minds at rest. And never is

insecurity more rife than just after a merger or take-over.



Research released by Ogilvy Adams and Rinehart in New York in March

showed that securities analysts think ‘cultural issues’ are the most

difficult to resolve successfully in the wake of a merger or

acquisition. On the whole they were unimpressed with the effectiveness

of company communications to employees. And if employees are not told

what is happening, how are they meant to know in which direction the

company is heading?



In an age of chilling corporate jargon such as business process re-

engineering, outsourcing, downsizing and the egregious rightsizing,

staff need to be briefed in easily comprehensible terms. If a change

management programme is underway, they need to be told what that change

means for them.



It may sound elementary, but to many it is often still an afterthought -

something to be addressed in a cursory manner after investors, clients

and the media have been informed. Does anyone really think that staff

are happier learning about the future direction their employer is to

take from the media instead of from their line managers or directors?



Confronted by societal fragmentation, many workers find that the job

they do and the company they work for gives them identity. And the

shrewdest employers are those that recognise this and use it

constructively, supplying their workers with information on the

corporate brand, instilling in them a sense of what the company stands

for.



IC also makes sound business sense. Time and money spent on high-level

planning are resources wasted if communication with the workforce is so

poor that a sedulously honed strategy is not implemented properly. PR

Week’s sister title Marketing is so concerned about poor communication

with front-line staff that it has made ‘internal marketing’ its

campaigning issue for 1996.



High street retailer WH Smith has taken this to heart, having hired

internal marketing agency Added Value Internal Communications (AVICOM)

to help its ‘Vision Action’ team implement a new corporate philosophy.



‘[The retailer] did some good things in that they put the vision in non-

corporate jargon and they focused on delivering it through store

managers, the influencers of their front-line staff. The people who put

together the external positioning knew they had to get their employees

on board first,’ says AVICOM senior planner Simon Torrance.



Without a doubt, IC is moving up the corporate agenda.



‘In the 1970s you could almost rely on communication through the trade

unions,’ says Anthony Goodman, director of specialist IC consultancy

Smythe Dorward Lambert. ‘But that’s changed, and as we don’t have

national works councils and worker directors on the board we’ve had to

be a bit more creative about how we communicate with employees.’



Larger companies such as British Airways and Ford have introduced

corporate TV networks for their staff. But it is developments in

cyberspace that are likely to have a greater impact on IC.



As well as the Internet there is now the Intranet - essentially

corporate websites where access is restricted to an internal network.

The BBC is one of the organisations in the vanguard of developing this

new IC device. Its Intranet, gateway-online information for staff,

started as a ‘live experiment’ in November after six months of

preparation overseen by a communications team led by Melanie Lowe.



‘It’s the most exciting and well-received IC project I’ve worked on,’

says Lowe



Material on gateway is sourced from about 30 different locations across

the BBC. It includes a daily news service plus an electronic copy of the

Corporation’s weekly publication Ariel; Ceefax and teletext service

Telfax; a jobs database with on-line application forms; film unit

details; producers’ guidelines and editorial policy information;

internal phone directory; electronic notice board; staff personnel

handbooks with hyper-linked cross references; and pages from the

external web site.



To a large extent, Intranets will offer employee empowerment, enabling

staff to find what they need to know about their employer without having

to track down documents scattered across an organisation. IC specialists

Chandler Gooding, for example, has recently created a staff handbook on

the RAC’s internal network which can be updated to take account of

changes within the management structure. New technology also allows for

real-time communication, so that staff need not be the last to know

after, say, the City and the press.



The use of e-mail and intranets is having an effect on staff newspapers

which are, says Lumsden, becoming more ‘features-led’ as news is

delivered electronically. Yet that is not to say that paper-based IC

publications will die out, particularly while the use of technology

raises questions about accessibility.



‘The big problem with electronic publishing within a company or across a

network is that you are confining it to those who have PCs on their

desks. If you only communicate in this way you are imposing a kind of

sponsorship,’ says Bob Gooding, chairman of Chandler Gooding, 95 per

cent of whose fee income is still generated by paper-based publishing.



‘Paper publishing is alive and well and with an enthusiastic following,’

says Citigate Publishing managing director Barbara Burrows. She makes

the point that printed matter complements electronic delivery and that

staff may take printed publications home to read at their leisure.



Burrows also puts forward the view that: ‘PR and marketing and human

resources have come much closer together.’ This convergence is necessary

if internal communication is to be carried out effectively.



Evaluation remains critical. Companies need to gauge the impact of their

IC programmes, and for this to be done properly requires more than

sending out an occasional questionnaire.



Speaking at the PR Week and Management Today conference - Communicating

Business Strategy on 28 March, Bill Quirke, managing director of

specialist IC consultancy Synopsis, and author of the book Communicating

Change, used the phrase ‘culture refracts communication.’ What he meant

by that was that cynical employees apply their own interpretations to

what employers tell them.



To really reach them, he claims, one must be able to find out how they

‘decode’ the messages they are given by employers. Clearly, this is a

time-consuming test of an organisation’s commitment to internal

communication.



In-house teams are often over stretched, under-resourced or

inexperienced to grapple with this alone. Hence the expectancy among

consultancies that the need for their services will grow.



Shake up: Managing changes for the greater good



Scarcely a day goes by without the business pages reporting on yet

another corporate shake-up. Businesses are re-positioned, bought, sold,

trimmed or expanded. All the time with an impact on corporate structure.



Change may well be for the better but employees are usually disinclined

to believe that from the outset. So it is vital that IC is placed high

on the agenda of any change management programme.



‘At least 50 per cent of change management is related to internal

communications,’ says Kim Coe, founder member of customer management

specialist The Merchants Group. ‘Without communications things can only

revert back to old belief systems.’ Coe, a change management specialist,

has worked with global manufacturer Timken Company, the UK board of

Porsche Cars GB and the ITT London & Edinburgh Insurance Company.



Inchcape, which has 48,000 employees in 100 countries, has taken on

employee communications consultant Nanci Tangeman on a fixed term

contract to review its IC procedures in light of a major reorganisation.

The corporation is selling its testing and services division and

demerging its Bain Hogg insurance business. Its employees understandably

want to know how that will impact on them.



‘We know that employees now expect more information from their

companies,’ says Tangeman. ‘It’s hard to tell employees that their

company is being reorganised, there will be redundancies or that a

acquisition is being made unless you’ve got into the habit of giving

them regular information.’



Research carried out within Inchcape showed that 81 per cent of

employees wanted daily discussions with their managers and 72 per cent

were in favour of monthly team briefings. Inchcape is also lookingat the

feasibility of an intranet to disseminate more information internally.



Exel Logistics, part of logistics group NFC, hired Key Communications to

handle a sensitive IC change management brief. Exel had been hit by

competition and did not have the cash available for salary increases.



A new management team decided instead to reward the 19,000 employees

with an Inland Revenue-approved tax-free profit-related pay scheme. The

scheme offered a potential increase in overall take-home pay through an

end of year bonus but also entailed a 10 per cent salary cut.



‘We tackled it head on and asked the question that everyone will ask,

what’s in it for me?’ says Sue Sharp of Key. The consultancy’s

involvement in communicating the benefits of the change helped achieve a

96 per cent acceptance at the ballot.



If no trouble is taken to communicate change, the situation can become

parlous. The BBC’s Melanie Lowe says that director-general John Birt set

about improving IC at the Corporation becauseof staff resistance to some

of the internal changes he was trying to implement.



There was at the BBC until 1993, says Lowe, ‘a leaky, vicious circle of

mistrust; a culture of management by press cutting.’ As the BBC had not

previously taken IC seriously, the political and economic pressures it

was facing were not widely understood. It was only when a new IC team

was put together late in 1992 that these change-related issues were

tackled head-on.



Change cannot be effected with any permanence unless the reasons behind

it are communicated to staff. And senior managers need to lend their

full support to an IC programme if it is not to disappoint.



Technology: Software for interactive publications



Allied Domecq has recently beefed up its internal communications

following a major group reorganisation. As part of its restructuring,

the company, like many, has replaced its paper-based Newsline

publication with an electronic newsletter, in this case created by

corporate communications agency AB Communications using E*News software.



E* News is an interactive on-screen technology, which automatically

converts ordinary word processor text into newsletters with turning

pages, laid out columns in headlines, resizable typefaces, full coloured

graphics and photographs.



The newsletters can be updated instantly and additional Video*Plus

software allows video clips to be pulled into electronic publications.

The resulting document is then distributed via e-mail, wide area

networks, Internet or Intranet or can be sent out on disc. The software

also includes an inbuilt interactive question and answer function,

opening up dialogue between staff and management.



Pfizer Pharmaceuticals plant at Sandwich in Kent, was one of the first

companies in the UK to utilise the new E*News medium as part of its IC

programme. Using the technology, Pfizer’s human resources department

produces a daily newsletter which, in addition to general company

information, includes its current share price, general updates on the

pharmaceutical industry including new UK and European legislation. It

has also enabled Pfizer to offer employees real-time localised

information such as regional motoring updates.



The E*News newsletter was initially trialed among a group of 25 staff

and the company now plans to roll out the service to its 350 employees

at the plant. At present, the system has supplemented rather than

supplanted Pfizer’s existing paper-based internal publications - the

main barrier being the number of blue collar workers without access to

the necessary hardware.



However, Pfizer is also now experimenting using the E*News software on a

touch- screen basis to ensure that staff without PCs are able to gain

access. One terminal has already been set up in a communal area at the

plant and there are plans to set up further terminals on the

manufacturing floor. If the system is successful, the company is then

likely to extend the software to other plants in Europe. The process

however will be gradual.



‘There is no point in getting staff to change their habits radically as

it will only scare them. You are not trying to do this for electronics’

sake but in order to improve communications,’ says AB Consultants MD Tim

Buckley.



For a free electronic version of this special report on internal

communications, and information about E*News and Designer on-screen

publishing software, contact ION International Limited, tel: 0171 224

1963, fax: 0171 935 1737 or e-mail: 100447.1453@compuserve.com -

requesting Mac or Windows format.



Case study: TNT spreads the word across the world



TNT Express Worldwide, the trading name of GD Express Worldwide, is a

global distribution company employing over 13,000 staff and operating in

more than 200 countries. It is owned by TNT of Australia and a

consortium of the national post offices of Germany, France, Holland,

Sweden and Canada.



Shandwick company Prime Communications was taken on two years ago to

develop an IC strategy from scratch for TNT EW. The complicated

ownership and structure of the company meant that in some cases

employees were not even sure of the name of the organisation that

employed them.



The main objectives of the programme were: to assist TNT EW in reducing

staff turnover, improve service quality, increase productivity and

bolster employee satisfaction. To achieve this it was felt that staff

needed a clearer understanding of their roles and of the company’s

business objectives.



‘It was really taking a long, hard look at how we did business and

improving the process,’ says GD Express Worldwide internal

communications manager Karin Bjarnason. Part of the aim was for

employees to see where they stood in relation to the roles within the

‘broader perspective’ of a corporate change programme.



Prime decided that IC needed to be addressed at a centralised and local

level so that all employees could have access to up-to-date information

which could be adapted to fit local requirements.



‘The sheer scale of the internal communications programme has been a

real challenge,’ says Prime senior account manager Carolyn Ayton.

‘Although the programme is run centrally by Prime, we involved our

Shandwick network of global PR agencies from the start through a series

of regional internal communications workshops around the world.



‘This ensured that they, together with the client, bought into the

programme and understood the key objectives. As a result we have a

framework for ensuring consistency of message to all 13,000 employees

across the globe.’



Prime prepared a comprehensive IC guide to explain the management

board’s commitment to the process, its place in the corporate plan and

where communications responsibilities lay at corporate, regional and

country levels. Core materials were developed and their design was

standardised.



‘Now when you see a newsletter from Dubai and one from North America

they look like they are from the same company,’ adds Bjarnason.



IC co-ordinators or project teams were appointed locally and regional

workshops were run to ensure that a staff meetings programme was

introduced and maintained.



Bjarnason, who sees IC as ‘strictly a marketing function’ was pleased

with the results. TNT EW has seen staff turnover slow down and

productivity pick up.



Case study: RPR breaks down barriers



Mergers and acquisitions are difficult enough when carried out by

friendly companies within the same country. Imagine then the problems

created when a US/French multi-national takes over a UK-owned company

after an initially contested bid.



This is the situation that faced pharmaceutical company Rhone-Poulenc

Rorer last October after its purchase of Fisons.



‘Up until immediately before it was finished it was not such a friendly

atmosphere. It wasn’t a co-operative environment,’ says RPR’s Janet

Walkow who, in her global strategic planning capacity, took on

responsibility for the internal communications.



Due to Fisons’ resistance to the bid, the acquisition team initially

focused on external communications. It was only a little more than a

week before the offer went unconditional that external IC consultancy

Smythe Dorward Lambert was drafted in on the recommendation of Boston

Consulting Group, the management consultants advising on the integration

who had worked with SDL on Glaxo’s merger with Wellcome.



SDL brought in six of its consultants to work with RPR’s in-house team

in what was known as the Communications Platform. RPR’s communications

function is decentralised, and the platform allowed for greater IC co-

ordination and consistency of messages to the various Task Forces set up

to implement the integration and to the employees themselves.



SDL advised RPR on the likely questions it would be asked at a meeting

with senior Fisons managers. It also advised on IC material, all of

which was branded with the word ‘ensemble’, chosen because it was

clearly understood to mean collective effort and cohesiveness by both

English and French speakers alike.



The Ensemble banner was used on newsletters, videos and briefing packs.

SDL also commissioned a design company to come up with a logo - a

medicine capsule with halves of different colours to represent the two

organisations coming together.



‘Distribution of material was probably the biggest challenge during the

integration process because we were communicating to different countries

and cultures - both geographic and business cultures,’ says Walkow.



SDL urged RPR not to go ahead with a conference for its pharmaceutical

operations division it had planned to hold in Madrid in November,

fearing Fisons managers would feel excluded. Instead the conference was

changed into an event centred on the integration.



‘Madrid became a symbol of both companies working together,’ says SDL

director Anthony Goodman.



A voicemail telephone question line was set up for employees around the

world. The most popular questions were then answered in print. And SDL

helped RPR develop ‘Sensitive News’ - best practice guidelines for

managers with difficult issues to face such as redundancies, relocations

or plant closures - and worked on an internal communications plan for

the four months following the take-over.



Focus groups, called ‘feedback panels’ by RPR, were used to evaluate the

process. By and large the response was favourable but there was, says

Goodman, concern that although ‘the central communication had worked

well there wasn’t enough local communication.’



Walkow says she is pleased with the way internal communications has been

handled, with the proviso that perhaps more information should have been

delivered to managers to help them brief their staff.



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