What Every CEO Needs To Know About the New Communication Department

Communication departments are transforming themselves. That’s good news.

Many communication departments are in the same business they were in 25-30 years ago—informing “audiences,” which conjures images of someone speaking to an audience.

A confluence of forces including customer demands, increased competition, technology, regulation, environmental pressures and workforce changes are requiring every department and function to generate more value.   The business reality is that budgets that generate acceptable returns aren’t as likely to be cut as those that don’t.

True, not everything that’s done in a communication function–or any other function–adds the same value in terms of its contribution to cash flow, customer satisfaction, operating income or whatever financial measures the company is chasing.

But these forces and the need to add value are requiring communication departments to shift from being a source of information directed at audiences, to a function that eliminates communication defects impeding organizational performance among and within teams.

This shift makes sense to customers who benefit from improved quality, delivery and value. It makes sense to business leaders who can gain a new resource for measurably improving organizational performance. And it makes sense to those in the communication department who can go home at night knowing they influence something important to the greater good.

Communication department transformations today are not unlike those that occurred in HR in the late nineties, or in manufacturing and supply chain management before that.

  • Using rigorous analytics to focus the department’s work on activities that increase value–work that improves business results. (One auto company CEO told me our approach was similar to portfolio management.) This helps eliminate low value work that’s traditionally been done because “it’s always been done.”
  • Adopting lean six sigma principles and processes that weed out the nice-to-do activities that add no value to the customer who buys the organization’s products or services.
  • Shifting the focus from generating output to creating outcomes that are consistent with the higher level organizational measures. This includes eliminating communication breakdowns that cause people to underperform, like mixed messages or inaccurate information.

This systems-wide approach requires far more integration with other disciplines and departments, such as HR, finance and line operations, where much of the money is made.  And because the department is becoming more business-focused, it often requires new skills and knowledge, including business and financial literacy.

As the work becomes directed toward higher value activities, there’s more focus on systems and processes (e.g., measurement, rewards and recognition) that communicate and affect performance more powerfully than, say, newsletters and portals.

Communication departments have an opportunity to shift from a pure cost center to one that adds measureable value when the gains it creates are greater than the cost of creating those gains.

That’s a good news story all around.


  1. Jim: those that do not change will be gone! I would really like to hear more of your views of those changes and how people act, that will influence their value to the corporation.

  2. This article is exactly right. The two takeaways for me are use of lean manufacturing principles and partnering.

    Properly planned and executed work on behalf of HR, Finance, Marketing, etc. will help them succeed. We are too often like a vending machine… people ask for something and we bang it out. As professionals we have to provide guidance so every project adds measurable or at least demonstrable value.

    I once provided support to an initiative that created awareness that every employee, directly or indirectly, affects the customer experience… we have to realize that’s true of us, too! We should be able to map how any given project will ultimately drive business success, and counsel against any that don’t.

  3. As you may suspect, I agree with both of you. The slide deck that’s in the right column of yesterday’s Leadership Report depicts the assessment that’s used. It’s very rigorous, using both a value to cost assessment (importance, performance and cost) and an activity analysis that assesses time and cost associated with the work people do and the extent to which it adds value.

    Conceptually, it’s a lean process in that it reduces waste as defined by the customer.

    I’m working with a client now that’s working to connect every employee to the high level financial goals of the company. So everyone will understand the trade offs associated with decisions they are about to make. Obviously it applies to the communication people.

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