Recent research carried out in conjunction with the University of Cambridge demonstrates the difference that effective internal communication can make.
The recession has put the marketing community in a difficult place. With increasing pressures on budgets, and from boards demanding proof of ROI, marketers have found themselves having to answer the question, "what does a marketer do without any budget?".
Internal communicators face the same predicament. Like many marketing disciplines, internal comms budgets are pulled when times get tough and departmental staff follow shortly afterwards.
This promotion-centric view of marketing, and internal communication, is the one that's challenged in the research undertaken by The Judge Business School, part of Cambridge University in August this year on behalf of Omobono, the digital business agency.
Omobono's belief, that relationships drive business and that the ultimate role of marketing is to drive those relationships, was examined against both academic theory and business practice. What emerged had some major implications for the role of the internal communicator.
Research puts internal communication center stage
Omobono has been working with corporate clients since its inception in 2001 to increase internal engagement with corporate objectives and believes it's a key contributor to business success. As Harvard Business Review says, "It is a truth of business that if employees do not care about their company, they will in the end contribute to its demise." 1
But increasingly this represents a backward-looking view of the role of internal communication, one in which the function is there simply to communicate whatever it is that the organization has already decided to do.
Internal comms teams are involved in conveying the message but not developing the strategy.
Effectively, internal communication teams are involved in conveying the message, but not in developing the strategy behind it. This disconnect means as a result, and far too often, internal communication as a function sits low down in the food chain, struggling to make senior management aware of its critical contribution.
The Judge Business School research, which looked at Enterprise Relationship Management (ERM) across three sectors (service, public sector and manufacturing), placed far more importance on the internal communication function.
Relationships matter in business
The research confirmed that relationships are central to the success of business. "The overall performance of a company will depend on how well they're able to manage their own relationships." 2
However, the critical relationships aren't just those between an organization and its customers, but between the organization and its workforce, its suppliers and a wider stakeholder group. (See Figure 1 below.)
Figure 1: The wider stakeholder group of an organization (Morgan & Hunt, 1994)
While success depends on how good the relationship is, this is in turn influenced by how well it's managed by the organization. "The quality and nature of the relationship depends on the quality of the interaction process." 3
Managing relationships well relies on the ability to use everyone as part-time marketers
As the research also confirmed, success depends on the interaction being an ongoing process right across the company, not the province of one particular department such as marketing or sales. This is an approach propounded by Professor Evert Gummesson of Stockholm Business School, who goes on to break down the contributors to the interaction into full-time marketers (FTMs) and part-time marketers (PTMs).
From an ERM perspective, internal communicators have a significant contribution to make, working with senior management to ensure that these so-called PTMs are aligned behind organizational goals. If success in the future relies on marketing being not just a job for the marketing department then communication isn't the only thing the internal communication discipline should be doing.
Service is what's driving the economy
A second key insight revealed in the research paper was the impact the shift toward a service economy is having on every business sector, demanding a new set of behaviors and a new marketing
approach; not pushing a product but co-creating value by sharing knowledge, service systems and networks.
Figure 2: The service - product spectrum. Source: Godson, M (2009) Relationship Marketing, Oxford University Press
The need to share knowledge across the organization is common to all sectors
While each of the sectors surveyed by Omobono had specific issues they needed to address in terms of how their relationship focus would need to change in response to this market shift, the need to share knowledge across the organization in order to deliver an improved experience to customers, staff and other key strategic partners, was common to all organizations.
Service
For service organizations, knowledge is the fundamental source of competitive advantage so the ability to share information across the organization is paramount. But knowledge isn't simply knowing about
something, it's also having the application skills to put action into practice.
This presents the internal communication function with an opportunity to set up structures which enable knowledge sharing, becoming the developers of corporate strategy, not simply the people that tell employees about it.
Public sector
Not-for-profit organizations meanwhile typically have a functional structure where each department specializes in providing a particular service to customers. The key problem with this structure is that different departments hardly interact with each other. Customers on the other hand, want a one-stop shop from which they can receive all the services they need. This is driving public sector organizations to reorganize, aligning to deliver to customer needs, rather than according to government funding or legacy structures. This new partnership working isn't something public sector organizations are well versed in, and again the opportunity is for internal communicators to take the lead in putting structures in place to share knowledge and processes across the organization.
Internal communicators will be needed to instill new ways of working, interacting and behaving.
Manufacturing
In the manufacturing sector goods have become commoditized, leaving manufacturers constantly in search of new value propositions in a highly competitive global market. Service propositions in which partnerships are formed with suppliers and end customers are taking over from simply transforming materials.
In order to do this they need to work not only with internal departments, but with external partners, as well as to funnel knowledge back into the organization in order to be able to deliver the service again for the customer.
This is a sea change for many in a sector that relies heavily on the company's ability to share. Internal communicators will be needed not simply to tell employees what's going on but to instill new ways of working, interacting and behaving.
In conclusion
Relationships are central to business success and are driven by the quality of the interaction right across the company. Critical to this, is the ability to successfully share knowledge and build relationships across the organization, connecting marketing with sales, key account teams or HR, and aligning everyone behind service delivery to customers.
Viewed in the context of how important enterprise relationships are for the future success of businesses and public sector organizations in the service world, internal communicators are critical; moving out of the space in which they only think about the techniques of communication to one where they directly contribute to what needs to be done.
- Harvard Business Review January 2002
- Hakansson, H. and Ford, D. (2002)“How should companies interact in business networks?” Journal of Business Research, 55(2), 133 Hakansson & Ford (2002)
- Gummesson, E. (2008) Total Relationship Marketing, Elsevier Ltd Oxford
The Judge Business School research was conducted by MBA graduate Gijs Kragt as part of a project for Omobono Limited. Interviews were held with senior business leaders, including CEOs, marketing, commercial and customer service directors in leading organizations in the service sector (professional and financial services), public sector and manufacturing.
Have your say
What are your thoughts on this research? Do you feel more like this needs to be done in order to prove the value of the function to an organization? We'd love to hear your opinions - share them with us and the Melcrum community below.
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