When Adding Value Is Real

“What gets measured, gets managed.”

This phrase, most often attributed to management guru Peter Drucker, is widely quoted in business circles. The easiest way to understand it is by invoking its inverse.  “If you can’t measure it, you can’t manage it.”

This Thursday, I’ll join three of my fellow International Association of Business Communicators (IABC) Fellows to discuss the importance of communication management’s impact on driving business results upward while adding value to the enterprise. The podcast begins at noon, EDT Thursday, April 18.   You will be able to ask questions and share observations via Twitter by using the hashtag #COF44.

Here’s a link to the site.

For many years communication departments measured things that had little or nothing to do with running the business–the number of tweets, retweets, page views, campaign effectiveness, content consumption, readability and channel usage, to name a few measures that business leaders and shareholders don’t care about.

But that’s changing. Increasingly, communication departments are shifting their measures to those that relate to the health of the business–cycle time, gross margin, operating income, order fulfillment, quality, service delivery, cost, scrap, re-work, yield loss and productivity. Real results.

And when their investment in improving results is smaller than the gains they create, they’ve added value.

Communication represents all the ways we send, receive and process information. It’s the things we say and the things we don’t say. It’s what we do and what we don’t do. You can’t not communicate.

But many communication professionals have limited themselves to a tiny sliver of the total communication system—the formal channels—and focused their attention exclusively on them.  This narrow view of communication makes it difficult to drive business results and create value.

Most communication pros don’t work from a value proposition, which is a promise of value to be delivered. Consider my former client, Teresa Paulsen’s value proposition: “We will either make money or save money.” Name one CEO who wouldn’t buy that!

There are many examples of real results for communication pros who want to make the most of their function.

Courtney Reynolds, now vice president of communication for Northwestern Mutual Life Insurance, led a major performance improvement effort at ITT that improved on-time delivery 38 percent. Productivity increased 7.1 percent. The ROl was 1,148 percent! The communication function went from a cost center to a value creation function.

“As I’ve progressed in my career,” Courtney told me, “I find I’m counted on for my business counsel as much as my communications expertise. Having a firm foundation of a results-driven approach has helped me understand the importance of outcomes versus activity and how communication can advance the business. When I talk about how I’ve used communication as a key lever to improve metrics such as on-time delivery and decreased scrap and rework, business leaders pay attention because I’m speaking their language.”

When communication manager Dave Jackson was asked to improve safety at a ConAgra Foods facility, he brought the operations leaders and employees together to identify and eliminate root causes of the safety problem. They adjusted an incentive plan that was rewarding the wrong things. They also established a regular huddle and scoreboard process that focused intensely on the critical measures, including safety.   The plant’s total accident rate went from 10 to 2 within one year. Plant savings for workers compensation were more than $150,000.

Dave acknowledged that moving to this new results-driven role created discomfort.

“Discomfort in that you’re not quite sure of yourself when you start this work and discomfort from leaders who still don’t see the communication function as more than a content/propaganda machine. But, Dave said, “the benefit far outweighs the cost.”

Kristin Kelley was another pioneer. In her first project with me, Kelley improved productivity by 8.5 percent while saving $737,400 per year and generating a 700 percent ROl.

In his first project, Scott Fiedler reduced truck freight claims paid at FedEx by 25 percent and reduced truck accidents by 54 percent.

Bob Kula, now vice president of communication at Kiewit, led the effort at ConAgra Foods to reduce damage in a large distribution center by 65 percent while improving productivity by 16 percent.

And Anna Roach, former director of internal communication at Earthgrains/Sara Lee, helped increase manufacturing efficiency in a Chicago bakery by 18 percent.

“I started by telling my CEO that I wanted our function to contribute more value to the company,” Anna said. “My communication assessment survey of the leadership team had revealed that they perceived the function to be excellent at producing non-value-added material. After the success of our first project, the internal communication function indeed began to add value and gain a newfound respect.”

How do YOU get started? Ask yourself five questions.

  • Where are the best opportunities to improve performance by better managing communication?
  • What’s the size of the opportunity?
  • What are the root causes of the under-performance?
  • What will it cost to improve?
  • Is the ROl acceptable?

If the ROI is acceptable—to you, your leaders and the finance operation, proceed.

Make sure you have plenty of support from people who have been there before. Capitalize on what they learned.

Trying to take on these kinds of projects by yourself is a little like trying to learn how to fly an airplane without anyone in the seat next to you.

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