atkinson advisor

A distinct pattern of employee behavior drives business results. In that pattern, employee insights lead to beliefs, which lead to behaviors, which ultimately lead to results.

Beliefs are the lynchpin in this chain. If employees believe the company leadership and their managers, then the desired behavior will follow. If not, it won’t.

And now the disturbing part. In a survey of 1,000 employees, Towers Perrin found that less than half of employees viewed company communications about the business (strategy, performance, challenges, etc.) as credible. Twenty-five percent said communications were dishonest.

The formula for fixing this train wreck has three parts: honesty, openness, and timeliness.

Treat employees like the adults they are and tell them the truth. Give employees the same information and attention that you would the most important shareholder or analyst. Lastly, tell employees good and bad news before (or at least as fast as) telling external parties.

The results — business and otherwise — will surprise you.

Twenty years of working with companies has taught us a lot of lessons. Here are the five most common mistakes that we have seen from CEOs when working with their in-house communications counsel and public relations firms.

1. Not giving communications a seat at the table
   Communicators need face time with the CEO in order to communicate a CEO’s vision to internal and external audiences. A good communications professional will also take that opportunity to bring the CEO information about how people outside the executive suite view the corporation.
2. Delegating ownership of your company’s communications
   “Our internal communications are lousy. The communication staff needs to jump on this.” CEOs of high performance corporations make communications a personal priority. They speak often and openly to friends and enemies alike. Most importantly, they recognize that they are the communications role model for the entire organization.
3. Thinking about communications after business decisions are made
   “We’re closing the Memphis office and laying off 200 people next week. What do we need to do about communicating this?”  Communication plans are just as important as financial and operational plans when a company is making a significant change. Unfortunately, most companies make decisions in a communication vacuum and miss the opportunity to anticipate reaction to the change and build in solutions.Progressive CEOs openly and honestly communicate the potential for change and how it will impact the organization. Something to keep in mind: people have a remarkable capacity to accept bad news if they know it’s a possibility; but, they are rarely forgiving when you surprise them with bad news.
4. Considering the news media the enemy
   Contrary to popular belief, reporters are not out to get companies. They are truly interested in fair, balanced stories that reflect all sides of an event or an issue. In our experience, negative stories about companies result from a lack of access to the right people, an outright refusal to provide information for a story, or trying to “spin” the story (see next mistake).Strong media relations is a give and take where companies provide perspective, facts that can be supported, and access to decision makers who understand the story.
5.  Trying To Spin Bad News
   “How can we spin this?” is a question clients pose too often. Bill Clinton or Martha Stewart tried to “spin” the news and it came back to bite them. The same happens to CEOs who try to “spin” news either inside or outside the organization. We recommend outlawing the word “spin” in your office. Nothing raises more red flags with the media and other audiences than a company trying to sugarcoat bad news.

A Bureau of Labor Statistics (BLS) study revealed some interesting information about the average workday. The study found that, on a normal day, employees spend:

• 21 percent of their time on personal issues
• 19 percent of their time socializing with coworkers and gossiping
• 60 percent of their time on productive work

Change is vital to every organization, but it can have significant impact on productivity. During periods of significant change, the same BLS study found employees will spend:

• 23 percent of their time on retraining
• 21 percent of their time on personal issues
• 40 percent of their time socializing and gossiping
• 16 percent of their time on productive work

The bottom line: productive work drops nearly 75 percent in times of significant change. At the same time, socializing with others and (most likely) gossiping about the change increase more than 100 percent.

Strong internal communications will do two important things during periods of significant change. First, it will reduce the amount of time employees spend gossiping and starting rumors about all of the bad things they think already happened (even when they didn’t) and what they fear will happen next. It’s unfortunate that, given a void in communications, employees will often fill that void with the most negative news they can.

Second, strong internal communications helps to speed the change process so the company can return to a stable environment where productive work is the norm rather than the exception.

The most effective internal communications have several elements in common:

• Executives are open and honest about the change and the impact on the organization.
• Employees learn important news directly from their supervisors in a timely manner — regardless of their position in the organization.
• Everyone knows that questions are encouraged and that suggestions for improvement will be taken seriously by the organization’s leadership.

There’s no way to spin the results of this report. International HR consultant Towers Perrin has released its 2004 Spin Report, a survey of more than 1,000 working Americans about communications in the workplace. The results are far from pretty.

Some of the most startling results from the survey include:

• Employees believe their companies are more open and honest with shareholders and with customers than they are with employees.
• A majority of employees believe their company strives too hard to put a positive spin on communications to employees.
• Nearly 30 percent believe they get more credible news about their company from external news media than from the company itself.
• Employees put little faith in the business information they receive, including corporate strategy, financial results, and the competitive landscape.

A recent wave of corporate scandals sparked new requirements for openness and transparency in financial communications. Though no one will likely go to jail for failing to communicate openly and honestly with employees, it’s a good bet that companies with open, trusting cultures have a much better chance of survival in today’s hypercompetitive world.

A culture of trust starts with the CEO. He or she must set the standard for openness and honesty. More importantly, it is the CEO’s responsibility to hold other company leaders accountable for open, honest communications up and down the organization.

Positive word-of-mouth is the holy grail of marketing. It has the power to create relationships with customers that few other marketing efforts, such as advertising and direct mail, can duplicate.

Cascading communications can have the same impact on an organization’s internal communications. However, few organizations use it effectively.

Like a waterfall, cascading communications begins at the top. CEOs share important information with their direct reports, identifying key messages that need to be communicated. Those managers then communicate the information to their direct reports, adding information or clarifying how it is important to their business units. The process continues down through the organization — level by level — until it reaches all associates.

The benefits of cascading communications are numerous.

• It reinforces two-way dialogue where associates can ask questions and offer their opinions.
• It ensures that associates receive information that matters to them and explains how they are expected to perform their jobs.
• It satisfies the need of associates to hear important information from their direct supervisors (a key to employee satisfaction).
• It creates ownership of communications among managers.

Don’t think cascading communications can work in a large organization? Kodak has used a cascading system to communicate with more than 90,000 employees worldwide. Survey results show the program increased employee comprehension of why changes were made and nearly doubled confidence levels in company management, which had been lagging.

Like word-of-mouth, cascading communications takes time to develop. But once it does, it becomes a catalyst for reliable, speedy communications that can be the difference between good performance and outstanding performance.

A CEO’s reputation accounts for more than 50 percent of a company’s reputation, according to Burson Marsteller’s 2001 Building CEO Capital survey. The CEO’s impact on the overall reputation has increased nearly 20 percent since 1997 when the survey was first done.

The survey determined the top five drivers critical to building CEO capital:

1. Being believable
2. Demanding high ethical standards
3. Communicating a clear vision inside the organization
4. Maintaining high quality top management team
5. Motivating and inspiring employees

The survey makes the case for a strong internal communications program led by the CEO. Four of the five top drivers of CEO reputation focus on the organization, its values, and its associates; none of the top five focuses externally.