Are You An Expense or Profit Center?

Cost Center Profit Center 150x150 - Are You An Expense or Profit Center?Most internal communication efforts play the role of town crier rather than business problem solver.  Where is the power of the town crier approach?   To add value to an organization, internal communication needs to focus on improving results rather increasing activity that has little to no business impact.  That begins by changing what gets measured.

What NOT to Measure

Stop measuring things that don’t drive business results! I’m talking about the number of tweets, retweets, page views, amount of content consumption, readability, channel usage, quantity of content that’s been distributed, timing of content delivery, word count, visitors to your website and internal social media, clicks to open videos, podcasts or emails, frequency of topics mentioned, content popularity, comparisons of usage this year versus last year and the number of people who are talking about “campaigns” on social media, ad nauseum.

These and many other measures tell you absolutely nothing about how the business is performing. They measure activity sure, but they don’t measure whether people are doing anything but affecting the lost productivity created by doing nothing of business value.

Two things need to change if internal communication is going to continue to be a viable operation.

First, internal communication must view itself as a results-based process, versus an activity-based process.  It needs to help manage all the ways we send, receive and process information. This includes what leaders say and do, what the processes and systems communicate and the formal channels that suck up resources with little acceptable return.

Second, internal communication must produce results and value—like creating gains that are greater than the cost of creating them.

Thinking about internal communication in this role would constitute a 180-degree shift from a mindset that still views people as “audiences” to be talked to (presumably from a stage) rather than people who are capable of taking organizations to unheard of heights.

What to Measure

Internal communication needs to measure how well it’s improving measures that matter—quality, service delivery, productivity, safety and revenues for starters. These measures and others reflect a performance-based approach to managing communication versus the traditional cost center approach that drains value.

To give you examples of what I mean, here are a couple of brief case studies where internal communication folks improved results and increased value in part by influencing the right measures.

Case Study 1

Sales were declining at a high-tech engineering company in Texas. We teamed with the head of internal communication to interview sales people. They said on-time delivery was declining. As a consequence, customers were taking their business elsewhere. Employee interviews surfaced slow-moving communication between sales people and operations. Accentuating the problem was sloppy communication among inbound inventory, assembly and shipping and receiving. These communication breakdowns caused employees to miss on-time delivery commitments. A team of employees worked with us to eliminate the communication breakdowns. On-time delivery improved 38 percent. Soon after, customers started coming back to do business with our client.  Sales increased. 30 percent.

Internal communication was focused on improving internal communication that would, in turn, improve on time delivery which in turn improved sales.

Case Study 2

Employees at a global shipper told us international shipments were confusing, complicated and time consuming. An incentive plan communicated to couriers that they should move quickly through their routes rather than take time to introduce customers to its export business. Employees didn’t understand their role in helping to boost international sales. Sales and operations didn’t communicate well with one another.

Working with internal communication in the company’s Los Angeles operation, we created and implemented a communication strategy that explained the competitive context to employees, modified the incentive plan to communicate a balanced message around speed, safety and sales, provided job aids for couriers to help them sell more export business and set up a regular process that enabled sales and operations to work more closely.

Internal communication eliminated four communication breakdowns that enabled revenues and returns to increase dramatically. In less than four months sales increased 23 percent. The ROI was 1,447 percent.  The approach was taken to five more locations where revenues jumped $6.1 million. The ROI was more than 1,600 percent.

This is the power of communication focused on improving business results. Start imagining that each time you walk into your leader’s office, he or she sees you with a penny on your forehead.  Will the data you present be heard as an expense, or potential profit?

KEY TAKEAWAY:  Internal communications professionals need to shift their mindset and manage projects that measurably contribute to their organization’s bottom line.  Or else!

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