FOCUS: INTERNAL COMMUNICATIONS; The lost art of communication

Culture change: Management agendas are starting to reflect the need for well organised internal PR Electronic media: New software systems challenge magazines and newsletters for message delivery training: Reacquainting the current generation of managers with face-to- face, two-way communication

Culture change: Management agendas are starting to reflect the need for

well organised internal PR

Electronic media: New software systems challenge magazines and

newsletters for message delivery

training: Reacquainting the current generation of managers with face-to-

face, two-way communication

The need for good internal communications has never been more crucial.

Companies which invest in communicating with their employees usually

outperform their rivals.

The RSA (Royal Society for the encouragement of Arts, Manufacture and

Commerce) left little doubt about the value it places on employees when

it published ‘Tomorrow’s Company’, its damning report on the health of

British companies.

The RSA’s June 1995 report found that the UK has proportionately more

poor performing companies which are vulnerable to competition, through

low investment in best practice, than elsewhere in Europe.

It warned of the dangers of not communicating with employees as well as

other stakeholders, such as customers and shareholders, or, worse,

communicating inconsistent messages.

‘The company whose communication with all of these groups is not rooted

in consistent values will expose itself to a lack of credibility, loss

of confidence and damage in reputation,’ it reported.

The report stated that companies which invest in their staff out perform

the national average on a range of financial measures, such as return on

capital, pre-tax profit margins and sales per employee.

There is also a growing body of evidence which shows that there is a

close correlation between customer loyalty and employee satisfaction.

Companies which keep their staff longer, also keep their customers

longer, and customer loyalty is recognised as one of the best predictors

of profitability.

It is little wonder then, with so much evidence pointing to the value of

communicating with employees, that internal communications has started

moving up the management agenda. ‘Companies are realising that they can

be differentiated through their people, not just their products, and

that people do make a difference,’ says Colette Dorward, managing

director of communications consultancy Smythe Dorward Lambert. The

growing awareness of the importance of internal communications has also

stemmed from the massive structural changes that many companies have

undergone, which have been largely brought about by technological


Many of these change of management and re-engineering programmes have

involved massive staff redundancies and often relocation and,

consequently, completely new ways of working.

Communicating the reasons for the changes to employees and motivating

them in the wake of the upheaval is crucial to the success of change

programmes, as a survey by management consultant PA Consulting Group


‘Our survey found that 91 per cent of quality and re-engineering

programmes failed because of bad communications,’ says John Stephens,

PA’s director of Communications Strategy, a division of PA Consulting

Group which sees through the implementation of communication strategy,

and operates as a public relations company with its own clients.

‘Communications can help handle the hangovers of all these changes,’ he


Those hangovers include making sure staff, which remain after

downsizing, are motivated and fully understand the reasons for the

changes within a company.

Poor motivation can result in high absentee levels and, consequently,

low productivity levels. But, as Sir Anthony Cleaver, chairman of the

RSA inquiry pointed out, ‘there is wide gap between companies’

intentions and actions’.

This is often because they are driven by short-term financial

imperatives in their quest to satisfy shareholders and the City.

Ironically, the fact that shareholders, customer and employees are often

one and the same is often overlooked.

As interest in internal communications has increased, so too has the

number of companies offering internal communications solutions.

Whereas a few years ago there were only a few communications

specialists, such as Smythe Dorward Lambert, management consultancies

and large PR companies have started muscling into the field.

Internal communications strategy now accounts for the lion’s share of

business for the ITEM group, one of the longest established

communications specialists.

The group, which began as an education and training publishing house, is

now talking to companies about setting up an internal communications

benchmarking network. According to chairman David Clutterbuck, the

network, ‘would enable the companies involved to compare best practice’

while also providing valuable ammunition in terms of comparisons on PR

managers past performance.

The growing number of management consultants working in this area is

hardly surprising. It is a natural next step on from helping a company

with the strategy for its change programme.

‘With internal communications you have to be focused on what the

business is trying to achieve, so you have to understand the different

market drivers and what is being forced upon a company.

‘This is why management consultancies are coming at it from the most

powerful position,’ says Stephens.

‘At PA we can draw on the expertise of our human resources, individual

sector skills, people skilled in project management and communications

skills,’ says Stephens. But not all management consultancies offer the

type of communications team which PA does.

As John Orme, a director at Countrywide Communications, points out, many

management consultants bow out when the solution, or the strategy for

change, has been prescribed.

‘They don’t follow through. They may suggest reporting structures be

changed but they won’t stay and look at how it should be changed and

then implement it,’ says Orme.

Countrywide, which has a separate internal communications unit, is one

of a growing number of larger PR companies which finds it is being

invited to handle more internal communications work.

Some clients prefer to turn to PR companies, which they know have

experience in implementing strategies and have the practical

communications experience to be able to advise on the right channels for

disseminating information.

Anita Hunt, communications manager at Tioxide, a subsidiary of ICI,

hired Countrywide Communications after it pitched against three other PR


Hunt wanted a jack of all trades - a company which ‘could help us in all

areas’. That meant conducting a communications audit through to the

implementation of an internal communications programme.

But some within the PR fraternity feel that internal communications is

not a consultancy issue, but very much an in-house one. Indeed, the

Institute of Public Relations has just set up a new internal

communications special interest group, in recognition of its growing


The first meeting on 24 October was chaired by Mike Maryon, employee

communications manager at Bass Brewing, who has been involved with his

company’s own internal communications revamp (see panel overleaf).

Maryon believes that the IPR, rather than the PRCA, is the rightful

place for the group because of its wider appeal to in-house PRs. He has

a valid point.

While public relations, communications and management consultancies each

have particular offerings to bring to the corporate table,

responsibility for internal communications ultimately rests within a


So to whom should internal communications be entrusted to ensure it is

dealt with properly? Human resources? Corporate affairs? The board?

As companies flatten their management structure and move away from

having a centre, does it need to be the responsibility of any one

particular department? Consultants in the field, both management and PR,

find it a difficult issue to resolve.

‘It should be handled within corporate affairs, because the whole idea

of internal communications is a misnomer,’ says PA’s Stephens. ‘Once you

say something to someone in the company, it is then an external issue.’

Dorward argues there doesn’t need to be an internal communications

function because ‘if it’s working it don’t need a centre’.

‘I think it’s closer to management development than to public relations.

It’s not so much about being a broker as about establishing

communications objectives,’ says Dorward.

There has been a trend in companies revamping their PR departments,

which were externally focused, as communications departments with a

wider remit to ensure that there is consistency in all the company’s

messages to all its stakeholders.

Doing away with the centre is, essentially, the goal for many

communications programmes.

Instead of internal communications being about handing down edicts from

above, the objective of many internal communications programmes is to

ensure that information flows freely around a company as it becomes a

two-way process between managers and staff.

Asda Stores controller of public relations Alan Preece refers to the

internal communications process as encouraging ideas which should

‘reverberate around the company’.

While there is still a need for information to cascade down from the top

levels, of equal importance is ensuring that employees at regional

levels have information that is relevant to them.

This throws up a whole raft of issues related to changing attitudes,

training and the use of technology (see panels on previous pages).

Internal communications may have made it on to the management agenda,

but there is still a long way to go before it receives the attention it


In-house news: Electronic expediency vs direct contact

Are in-house publications being threatened by technology? The increasing

use of computer networks by companies for disseminating information is

casting fresh light on the role of in-house newsletters and magazines.

Unlike newsletters and magazines, which are often outdated by the time

they are published, or superseded by the ‘grapevine’, computer

technology can provide fast access to information at a keystroke.

Not surprisingly, companies are increasingly turning to electronic mail

and fast electronic news systems.

A recent survey undertaken by ION International, distributors of on-

screen publishing software E*News and Designer, revealed that 70 per

cent of the 200 corporate and marketing communicators questioned will

budget for an electronic newsletter as part of their internal

communications programmes next year.

Instead of pumping the same material out to all staff, information can

be edited and distributed to suit particular needs without the cost of

issuing ‘regional editions’ of newsletters.

More importantly, they offer a quick feedback mechanism. But while

technology undoubtedly has advantages over the printed word, it is not

set to replace it.

Many communications consultants comment that technology is making

companies rethink the style and content of their publications, with many

becoming more businesslike.

They stress that publications come into their own when information has

to be explained, rather than just conveyed. It gives employees something

to take away, to keep as a reference for facts and figures.

Smythe Dorward Lambert managing director Colette Dorward argues there

will always be a need for a publication as it ‘sums up a company’s


And Anita Hunt, communications manager at ICI subsidiary Tioxide says

print will remain invaluable as not all the company’s staff, in all the

countries it operates, will have access to networked computers. But the

real issue for internal communications is not about technology over

print, but the rise of face-to-face contact.

Companies are recognising the value of meeting their employees and many

top managers now spend a considerable amount of time each year on a

roadshow visiting their employees.

Michael Peters, chairman of ‘identity and innovation’ consultancy

Identica comments: ‘One person told me he misses the breathing of

perfume through his PC. I’m a great believer in the use of technology,

but there is no substitute for the chairman walking around the company

so that you can breathe the person and get a real sense of a person.’

Hedron partner Helena Memory also stresses the importance of direct

contact: ‘It is only through two-way dialogue and genuine discussion and

involvement between management and employees that you get understanding,

commitment and motivation - all the things that companies tell us they

need to be successful,’ says Memory.

Training: Learning how to make dialogue happen

Media presentation training courses may have been de rigueur in the

1980s, but in the 1990s the emphasis has shifted.

The increased emphasis on face-to-face communication within companies

has highlighted a need to develop a whole new bag of management skills.

Essentially, people need to be taught not just how to communicate, but

how to manage communications.

‘Most CEOs and boards don’t know how to address communications over and

above the more mechanistic ways of communicating,’ says Helena Memory, a

partner at communications and change consultancy Hedron.

‘There is too much information and not enough communication. The

information needs to be managed and communicated in a way that makes it


Face-to-face, two way communications is a whole new ball game for many


Not surprisingly, consultants recommend that they undergo training in

how to recognise and understand the different types of behaviour needed

to make dialogue happen and how to manage the process.

Crucially, they need to learn how to convey information down through the

company and then how to encourage a response that can be fed back up to

the top.

PA Consulting sends clients to its Sundridge Park management centre. The

training focuses on team working and helping people manage after their

company has gone through the re-engineering process.

At Sundridge there is an emphasis on learning how to motivate people -

which is crucial - if there has been a period of significant change

within a company to ensure it doesn’t lose employees -, and on measuring

peoples’ performance.

Smythe Dorward Lambert managing director Colette Dorward adopts a less

formal approach to traditional training sessions.

‘If you label it training it doesn’t always work. The shift is towards

putting people in situations where they are encouraged to be part of a


‘It is less about putting people through courses, and more about upward

appraisal,’ says Dorward.

She dismisses suggestions that it sounds like a soft approach to a hard


‘I don’t think it’s a soft approach. It’s about having to be much better

at the management process. What’s soft is talk about empowerment and

devolving responsibility that doesn’t feed through,’ says Dorward.

In-house magazines: Somertimes is a staff success

Supermarket chain Somerfield launched its quarterly staff magazine

Somertimes in 1994. It was a replacement for a previous family-oriented

magazine which had ceased publishing around two years earlier when it

was replaced by the quarterly staff video, Somerfield Television.

Somerfield decided to reintroduce the magazine because it found that

staff missed it.

The magazine and the video are now produced in a cycle which ensure that

staff see either the magazine or the video every six weeks.

Although the original publication was written internally by the

communications department, Somerfield has now contracted it out to Brass

Tacks which also publishes its customer magazine The Somerfield


The 12-page magazine is sent to Somerfields’ 30,000 employees who are

aged, on average, between 18 and 24, many of whom work part-time at the

firm’s 650 stores.

Somertimes is a bright colourful publication which keeps employees in

touch with company news and views and encourages two-way communication.

Communications co-ordinator Mandy Phelps says the style was adopted

because readers didn’t want anything too heavy and 12 pages appeared to

be the right length.

Phelps said staff felt the lack of an employee magazine indicated a lack

of company concern.

The summer issue featured a full breakdown of the company’s profits and

expenditure and an explanation of their implications in straight talking

and accessible language. The magazine invites comment from its readers

with the promise of pounds 20 for every letter published. A regular

feature is the ‘Dear Exec’ page where a letter directed to the executive

committee is printed with a reply.

It also has its light-hearted side with competitions, crosswords,

special offers, news of fund-raising events and personal interviews with

high profile company employees.

Each issue is funded by a single advertiser which allows Somerfield to

offset its costs.

Video-conferencing: Nissan cuts down on travel

Nissan was having problems linking design engineers and technical

experts at its Cranfield centre with production engineers at the

company’s UK manufacturing plants nearly 250 miles away in Sunderland.

It found it necessary to operate a shuttle bus service three days a week

between the two sites - a four hour journey - so that key decision

makers could meet.

In 1992, Nissan installed BT’s VC5000 video conferencing system at

Cranfield on a trial basis. It has now become permanent and has allowed

problems which require input from both sites to to be quickly resolved

while maintaining the all important face-to-face communication.

The system meets two requirements necessary for successful video-

conferencing between the two plants. It is capable of exchanging high

resolution graphics and engineering designs and it can also provide

face-to-face communications for up to 12 people involved at either end

Video conferencing has already been invaluable for the car manufacturer.

When a technical problem occurred, the production team made a cutaway of

a fuel tank with the assembly in place, took it to the video conference

room and used the high resolution camera to show designers the problem

using the close up and zoom facilities on the system’s document camera.

A solution to the problem was shown to the production team in a process

which took less than an hour. Without the video-conference a four hour

drive would have been required before all else.

Nissan is also able to use the system to talk to its operations around

the world.

Case Study: Bass Brewers keeps staff informed

Bass Brewers, the brewing subsidiary of Bass, underwent a change

management programme three years ago when the company restructured in

the wake of the Government’s Beer Orders, which capped the number of

pubs a brewer could own.

It reduced its workforce by a third to around 4000 employees and reduced

its core functions.

Before the shake-up, the company’s PR had been externally driven, with

internal communications as a secondary, or bolted on, function. But in

1993 Bass Brewing set up its communications department, which includes

public affairs, internal communications and media relations. Only

specialist brand PR was kept separate.

One of the communications department’s key roles was to ensure

information about the changes, and how they would affect employees,

cascaded down through the company, ahead of the ‘grapevine’.

Line managers were given responsibility for communications and four

weekly team meetings were introduced at which staff were updated on the

changes. Reaction was fed back to the top of the company.

The four weekly meetings worked well but after a period of time became

stale. The grapevine still appeared to be working strongly and line

managers often struggled to find fresh information to include in the

team meetings.

The next stage was the introduction of the fast electronic news service

(Bass Brewers FENS). The Microsoft Windows based application was aimed

at keeping line managers up to date with information.

FENS, like a newspaper, covers job vacancies, new customers, press

releases, product development and marketing.

Line managers could call up the three paragraph stories which they

believed were relevant to their areas. A contact name and number is

provided at the bottom of the story if further information is required.

FENS did not replace weekly team meetings, but was regarded as an aid to

help them.

Line managers could download the information for use in team meetings,

for posting on notice boards, or for use in one-to-one sessions when

they have decided who the information should be cascaded to.

They were trained by the communications department to write their own

three paragraph copy so that the service can be devolved away from the

communications department.

FENS is now being made available to all 3,200 of Bass Brewing’s 4,000

staff who have access to a computer.

The communications review is now continuing with a review of the

company’s bi-monthly tabloid newspaper.

Despite the reliance on FENS, Bass is also committed to face-to-face

communications which it regards as ‘the prime communications mover’.

Senior management visit all its regions at least once a year to talk to


The communications department now has nine staff, down from 13 when it

was set up three years ago.

Its role has changed as the company has evolved and internal

communications has been devolved.

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