Communication should be managed to improve results that the company, its customers and ultimately shareholders care about? And, it needs to do so with an acceptable return on investment, meaning the cost to create an operating or financial improvement should be less than the gains that are made?
The executive vice president of marketing for a big pharmaceutical company and I were talking recently about what gets measured in his company. “Our communication people are worried about the wrong things,” he said. “I explain a business problem to them and they trot out a bunch of activities and want to measure click-throughs, opens, mentions, likes, share of voice, engagement, awareness and re-tweets. My goal is to increase sales and gross margin. Why can’t they do things that measure and improve that?”
It starts by linking the communication strategy directly to the business strategy. However, all too often the communication strategy is born in a vacuum on the outskirts of the business operation. That needs to change and is changing.
Many communication practitioners are actually on this path—moving from an activity-based function to one that focuses squarely on outcomes. Here are a few examples.
• A global shipper wanted to open new export markets because the US markets were saturated. With the CEO’s support, the head of internal communication created a pilot project of 15 people in Los Angeles that identified multiple communication breakdowns that were preventing the company from expanding their export business. Some breakdowns were external. For example, some customers didn’t know the company was in the export business. Most breakdowns were internal, such as an incentive that discouraged couriers from selling exports to their customers and lack of information about how to sell exports. The team created and implemented a comprehensive plan based on communication, incentives and training. Over 90 days, export volume increased 16 percent, more than double the goal they set for themselves at the beginning of the project. The ROI was 1,660 percent. They replicated the project in five more locations where they increased revenues by 23 percent and generated a 1,447 per cent ROI.
• A high technology engineering company improved quality initially by 50 per cent and then by 75 percent by bringing its production people together to improve communication related to the best work practices to dramatically reduce scrap and re-work.
• A building materials company’s head of internal communication launched a pilot project to improve relations with a labor union that was preventing the company from hitting its productivity goals. Poor internal communication was causing excessive downtime. Over five months, the operation improved productivity by nine percent and generated a 700 percent ROI on the effort.
In each of these three cases, the business strategy drove the communication strategy.
These communication practitioners have changed how they measure their performance. It’s a shift from activity-based measures to a balance of results and activity measures. But, the main focus is on results.
Questions to ask:
- Did our communication investment make money or save money?
- Did it result in added value or added cost?
- Did it change the way people do work so results could change?
- Did it contribute to wiping out the root causes of communication breakdowns, such as mixed messages, lack of information, slow-moving information and inaccurate information?
Communication practitioners have a huge opportunity to remove these communication breakdowns so their organizations can soar.
Key Takeaway: As more communication practitioners understand that adding value is important to their careers, they will start shifting their focus from producing activity to producing results that matter.