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Can Internal Communications Impact the Bottom-Line?

I came across an interesting question on Linkedin by a communication professional in the Russian Federation seeking inputs on how ‘internal communications affects business results (in terms of money)’. He goes on to explain his situation – “IC is a new function in our company. I need to prove expenses to Board Members. I understand that communications is not the only thing that builds business result. How does one show the correlation of expenses and profits in figures?”

I found his ask very relevant considering the growing attention internal communications receives from leadership.

His question generated a lot of viewpoints and debate – over 20 comments were posted on the thread. I wanted to synthesize what it means for internal communicators and how they can present their case to leaders when posed with such questions.

In my recent research on the state of internal communications in India I reported that only a third of internal communicators accepted that they had leaders buy-in and less than half were confident of pitching a business case for their function. With that context I found it relevant to discuss insights shared by fellow communicators on this thread.

While some recommended dramatic ways of pushing the case with business – ‘ask the organization to stop communicating entirely and see how long it lasts’ , others shared research reports such as the Towers Watson 2011/2012 Change & Communication ROI Study  that qualified how internal communications impacted the bottom-line or showcased case studies of organizations such as Pharmacia which demonstrated ROI for internal communications. The IABC Employee Engagement Report 2010 got referred for insights into the impact of employee engagement on corporate performance.

Interestingly, some communicators did attempt explaining the role of internal communication and how aligning the workforce with business goals and priorities supported the agenda. One suggested changing the game by pitching ‘return on expectation’ instead of ‘investment’, an excellent point of view.

Another communicator cited the impact of ‘managing problems’ and ‘training new staff’ (negative parameters) and employee morale and customer engagement (positive indicators) and therefore show how business gets impacted. Also how increasing awareness and engagement led to improved customer service, higher productivity and lesser errors.

Overall, I feel that internal communicators need to switch the approach from pitching ‘how IC adds value’ to ‘proving expenses to the Board’. The Board must have seen a good reason to create a function like IC in the organization in the first place.

There are however some other ways to demonstrate value and quantify the outcomes.

  1. By linking the IC function’s objective to the organization/business. That means, if the firm wants to improve organizational commitment or engagement among staff, consistent, effective communication can get you there.
  2. Internal communication aimed at giving staff a consistent experience and improved manager connection can lead to reduced attrition – a good measure of value that the Board will appreciate
  3. By inspiring staff to promote the brand externally also adds to tangible value. If the communicator can do a ‘before and after’ brand audit, you can gauge the impact of your effort.
  4. By enhancing collaboration and knowledge sharing among staff you can showcase value. Your intranet, if you have one, is a great starting point.
  5. Lastly, by building a lasting culture that aligns to your company’s value system and allows for recognition among staff, this again adds to how internal communication can impact the bottom-line.

What do you think?

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