No one doubts that employee buy-in and motivation, a cohesive culture, lower absenteeism, more effective recruitment and retention, better customer service, satisfied clients, less messy mergers or restructurings, or fewer lawsuits have a financial impact on the company. And, to most people, it makes sense that it's easier for an employee to do a great job if that employee is clear about the firm's vision and his own role. Then why does leadership support for effective leadership-development and organizational communication often wane once it becomes apparent that a good program requires a financial investment and support that goes beyond easy rhetoric or the occasional town hall meeting?

After several years of business boondoggles, corporate malfeasance, ethical snafus, and executive crime, few people — unless they've been living in a subterranean cave or a state of denial — would suggest that there is much work to be done to revitalize leadership, realign employees, and regain trust in order to ramp up to the levels of productivity and innovation that will be necessary in the "recovery years" ahead of us.

An excellent communication strategy — with flawless implementation — is a must, not a luxury. Such a communication program saves (and stimulates) much more than it costs. If you're the leader of an organization, or preparing a business case to justify communication-related expenditures, here's food-for-thought as you consider the benefits of effective communication for your organization:

• The current state of affairs in most organizations points to a need for significant trust-building and high-integrity communication (and supporting action). A Harris Interactive poll reported in October 2002 that 87 percent of surveyed employees think top company managers receive (and don't deserve) excessive pay. This same group believes that top executives become rich at the expense of ordinary workers. Of this group, 85 percent are angry about it, and close to half of angry employees catagorize themselves as very angry. Veteran and mid-level workers are more likely to say they are worse off and feel angrier. (CFO Magazine, "Employees Angry at Bosses Pay," October 21, 2002)

• The Bureau of Labor Statistics (BLS) reports that 67% of American workers want to change their professions. (Source: AQP Inbox, April 2002) Since motivation is intrinsic, the BLS study suggests that the majority of the workforce is not as fully productive as they might otherwise be. Mindful communication can help employees to connect personal goals and values with opportunities and assignments at work.

• Who are the leaders in a company? According to a study by BTNovations of Provo, Utah, 85-percent of the leaders identified by employees surveyed were not managers or executives in the company. The gist? A vast majority of employees, based on the study, don’t consider managers or executives as leaders. (Source: "Workers don’t always view the boss as leader," Christian Science Monitor, 7/30/01, p. 12.) The opportunity? Inspired leadership can harness the interests and energies of employees, while they're at work, leading to an increase in focus, productivity and innovation.

• Civility and professional courtesy in the workplace has decreased over the past five years, according 44-percent of respondents in an OfficeTeam survey. The study cites simple courtesies and positive leadership as a way to curtail the growing rudeness and its ill effects on productivity and morale. (Source: "Workers don’t always view the boss as leader," Christian Science Monitor, 7/30/01, p. 12)

• Opinion Research in Princeton, NJ reported that 47-percent of workers in a 30,000-worker poll said they either disliked or were ambivalent about the company they work for. A Gallup poll found that 80-percent of U.S. employees dread going to work on Monday mornings.

• According to Alfie Kohn, educator and author of No Contest: The Case Against Competition, using financial "carrots" to motivate employees (or children) is ineffective, and can actually decrease loyalty, inspiration, creativity and motivation. (For more of Kohn's work, see his web site. You'll find a link in Ivy Sea's Leader Exchange.)

• A Gallup poll confirmed that employee attitudes are critical to factors such as sales, profitability, customer loyalty and employee turnover. The survey of over 100,000 employees across 12 industries showed the link between communication-related issues—employees knowing their roles, feeling important to the vision and mission of the organization, having a good relationship with their supervisor, being recognized for their work, etc.—and organizational success. (Training & Development, December 1998, p. 13)

• A study by Ernst & Young, in collaboration with Harvard University Graduate School of Business, most IPO companies perform "relatively poorly" the first three years after the IPO. The most successful post-IPO performance came in companies that considered non-financial elements along with financial performance during the IPO planning process. Non-financial IPO performance success criteria included issues such as quality of management, level of customer satisfaction, strength of corporate culture, quality of investor communication, management credibility, planning and the ability to attract and retain employees. Companies that saw the IPO as a transformation that required advance planning and change initiatives--introduced one to two years prior to the IPO--performed more successfully. ["Measures that Matter: Managing the Success of the IPO Transformation Process," Ernst & Young LLP]

• According to an American Management Association study, fewer than half of surveyed executives believe that managers in areas other than finance and marketing have a good understanding of company goals. Other AMA research found that nearly half of 483 managers surveyed were disturbed by the poor communication coming from the executive ranks.

• A Louis Harris poll showed that 93% of 230 primary care physicians surveyed agreed that better communication could help avoid serious medical problems. PHICO Group, a major medical malpractice insurer, has data attributing as much as 70% of litigation involving doctors with poor communication (Medical Practice Communicator (5(4):3, 1998; www.medscape.com)

• According to a survey released in June 1998 by the University of North Carolina’s Kenan-Flagler School of Business, workplace rudeness or incivility can hurt commitment, productivity, morale and the bottom line. Of the 775 persons surveyed about rude workplace behavior, 53 percent said they lost time worrying about the incidents, 22 percent said they decreased their work effort and 10 percent said they cut back on the hours they worked. Almost half said they contemplated quitting their job, while 12 percent actually quit. (The Washington Post, Sunday, July 12, 1998, article by Kirstin Downey Grimsley; USA Today Money Section Cover Story, 9/9/98 article by Stephanie Armour)

• Research from the Center for Applied Management at SUNY New Paltz revealed that workplace aggression rises in the face of reduced budgets, increased workplace diversity, management changes, pay cuts, computerized performance minitoring, increased use of contractors or part-time employees, reorganizations, etc. The study connected these workplace realities with decreased commitment and significantly increased "verbal aggression" or incivility. [The Washington Post, Sunday, July 12, 1998, article by Kirstin Downey Grimsley; USA Today Money Section Cover Story, 9/9/98 article by Stephanie Armour]

• A nationwide survey showed that executives believe that 14 percent of each 40-hour workweek is wasted due to poor communication between staff and managers--amounting to a stunning seven weeks a year. The survey, developed by OfficeTeam of Menlo Park, asked 150 executives from large companies to estimate how much time is wasted, and the mean response was 14 percent. [San Francisco Examiner, Career Search section, Sunday, September 13, 1998 J-1]

• Friction decreases productivity in all areas. Most managers spend at least 15-percent of their time (nine weeks per year!) dealing with 'personality' squabbles that good interpersonal communication skills and supporting communications could help mediate (Denver Business Journal, 1/27/97). Other studies have linked even higher percentages of absenteeism, turnover or decreased productivity to poor managerial skills and miscommunications between employees or employees and their supervisors.

• According to a survey of HR Directors from Fortune 1000 firms, the top 10 skills managers need for organizational success are: interpersonal, listening, persuasion and motivation, presentation, small-group communication, advising, interviewing, conflict management, writing and reading (from ASTD’s Training & Development; study conducted by O’Conner Kenny Partners).

• Management consultants Rath & Strong conducted a survey that revealed 79% of managers expect employees to take initiative beyond their job descriptions. Forty percent of those managers said most employees do not believe they can make a contribution to their company's success, revealing a gap between management expectations and employee perceptions.

• According to a report in The Wall Street Journal, two recent surveys underscore merger failings. According to a survey by the Philadelphia firm, The Hay Group, 75-percent of the 65 organizations surveyed said they failed to place employees in the right roles in the six months following the mergers. According to Right Management Consultants, more than two-thirds of businesses polled admitted that they’ve not successfully merged cultures. Costs of these merger failings cited in the article include diving stock prices, higher levels of turnover and lost productivity. [The Wall Street Journal, week of February 15, 1999]

• Multiple surveys show that a large percentage (a majority in most cases) of corporate restructurings and mergers or acquisitions are either considerably more difficult and costly than originally anticipated and/or they fail to produce the intended cost-savings and increases productivity. A recent Leader to Leader article indicated that a full two-thirds of change efforts (quality, reengineering, vision statements, etc.) fail to achieve their intended results. Experts and studies aften point to ignored people and culture issues as one predominant reason for the failures [Leader to Leader is a Drucker Foundation publication]

One reason for these results is that issues of organizational culture (systems, policies, communication) and organization communication — efforts once considered "soft" — were ignored until problems were in full bloom if not outright crisis. In other words, announcing or dictating something doesn't make it so; people taking action on a day to day basis do. That requires effectively planned and implemented communication.

• According to a study conducted by Ernst & Young's Center for Business Innovation, investors base 35% of their decision to invest on non-financial factors such as the ability to recruit and retain good employees.

• In the highly-regarded book, Built to Last: Successful Habits of Visionary Companies, a common thread among companies that have been effective during their long histories is a habit of smart information-sharing, and the consistent and effective communication of the culture and expectations of employees and managers. These are highly-respected, often-benchmarked companies like Nordstrom, the Walt Disney Company, Hewlett-Packard, 3M, Motorola, Boeing and Proctor & Gamble, which, contrary to some current thinking, started out entrepreneurial and throughout their history survived the peaks, valleys, and restructurings that are inevitable in business. The basic frameworks (learnings, best practices) from these companies are effective regardless of the size of company in which they're applied, but the practices will not work if issues of culture and communication are ignored.

• In Levering and Moskowitz's The 100 Best Companies to Work for in America (1994), having open communication between management and employees was a key aspect of the culture of the highest ranking companies.

• A study by MORI, a British opinion research firm, showed that two thirds of company employees don't believe the content of company communications such as videos, e-mail alerts or business television. The survey also showed that fewer than half of those surveyed understand the company's objectives.

• According to research conducted by the International Association of Business Communicators Research Foundation, a clear majority of Chief Executive Officers surveyed deemed communication an integral — and often underutilized — contribution to effective, productive employees; company profitability; and successful corporate initiatives. [IABC Excellence Study, San Francisco]

• According to the Journal of Commerce (March 20, 1997, v411, n28934, p8A, "Building Loyalty and Profits"), employees who feel a sense of belonging and identity with their companies will help the company increase its productivity and profits, and can be counted on to help the company in times of crisis.

• Says Bob Nelson, author of "1001 Ways to Reward Employees", in Leader to Leader, "When leaders look beyond purely financial yardsticks and measure their organization's productivity, responsiveness, innovation, and knowledge base, they are measuring their Return on People (ROP). Increasingly, it's that ROP that provides the most significant competitive advantage." [Leader to Leader, Drucker Foundation, Summer 1997]

• According to the Sloan Management Review, (Stroh, L.K., and Reilly, A.H., "Loyalty in the Age of Downsizing," Summer 1997), ongoing changes in a company's structure and the stronger-than-ever trend of downsizing, restructuring, merging and acquiring, are directly linked to a decrease in loyalty. Other studies have linked decreased loyalty and commitment to higher rates of absenteeism, turnover and lowered productivity and organizational performance -- all costly (and avoidable) trends for business. Yet other studies have indicated that good communication, culture and leadership help create more positive, productive employees, and thus organizations. According to the article,

"To both attract and retain talented managers, companies must foster less political work cultures and place a high priority on meeting employees' long-term career development and growth needs."

• A 1996 study by the Conference Board showed that 43% of companies surveyed reported difficulties in finding and retaining high-quality employees. "At all levels, companies need people who can deliver at the frontier of performance. They must understand where the company is going and be able to influence its path. They are the repository of much of the knowledge and skill base that makes the firm competitive. No company can be successful with a detached and unmotivated work force." (Strategy & Business, "The Triumph of People Power and the New Economy," Q2 1997)

According to the Strategy & Business article, "the burden is fully on the company to clearly communicate the basis of the employment relationship to all its employees and to keep them abreast of issues facing the company and the implications for them as individuals...The strategic benefits include greater employee loyalty and commitment to business goals, a way to drive cultural and behavioral change, a stronger corporate image for key stakeholders, better access to labor markets and improved customer relationships."

• The Computer Security Institute found that information security breaches cost the 563 companies it surveyed more than $100 million in 1996. When employees don't have the information they'd need to help protect the company's proprietary information, the company loses one of the best front-line defenses of information security.

• Companies that survey managers and employees often find that well over half (often 75% or more) of managers surveyed felt they did not have the information or interpersonal communication skills they needed to make their staff members as productive as possible or meet their staff members needs for critical information. Similar percentages of employees felt they did not have the information they needed on the goals of the company, the company's business, their roles in meeting company goals, etc. to contribute to the company the way they were able and willing to do.

• A survey of 1,468 restructured companies by the Society for Human Resource Management reports that employee productivity either stayed the same or worsened after layoffs. ["Creating Quality Communities" by Peter Senge, Community Building]

How can your group shine?

Think communication is a no-brainer? (Think again)

How communication bolsters info-security

Goals, roles, pay and performance

Curing the bad-attitude flu

Organizational-Culture Portal

Inspired-Leadership Portal

Small-Business Owners Portal

Wisdom & Personal Mastery Portal

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