Measuring Communication: ROI Meets ROC

There has been considerable time and effort invested by hundreds of people in attempting to demonstrate a return on investment for communication — advertising, marketing, public relations, and social media. It began as far back as, well, since someone first realized it might be measurable. In fact, any search on the subject will turn up any number of efforts, with some providing better explanations than others.

For my own part, I've been working, on and off, to refine a measurement formula for the better part of two years. My hypothesis is simple: the return on investment is related to the intent of the communication and the outcome it produces.

I | O = ROI

However, since last year, there have been several people who have noted that ROI means something different to business. In finance, for example, ROI means the ratio of money gained or lost (realized or unrealized) on an investment relative to the amount of money invested. When considering that definition, it becomes reasonably clear that ROI might be the wrong term for communication measurement, especially because not all communication produces outcomes that yield direct returns.

While this doesn't change the hypothesis, it does place a greater emphasis on establishing the connection between direct and indirect results because if we narrow the definition to only recognize direct returns, the greater portion of any communication plan will be diminished and working professionals will continue to misidentify incidentals such as conversations outcomes. Instead, I propose the real measure of communication is exactly that — the return on communication or ROC.

[(B • I) (m+s • r)/d] / [O/(b + t + e)] = ROC

For the next several Mondays, I will be writing a series about the above formula as illustrated within a free 5-page abstract, Measure: I | O = ROC a.k.a. The ROC, which defines a revised formula for communication measurement across advertising, marketing, public relations, internal communication, and social media. It has already been proven effective in measuring individual communication and ongoing campaigns.

Saying Nothing: Why Leadership Needs To Engage

Although a recent survey from Weber Shandwick has a small sampling with only 514 respondents, it mirrors several other studies that suggest the same — company leadership is still too quiet about the current economic crisis.

More than half (54 percent) of those surveyed said their employers are not talking about how the financial crisis is impacting the company and the majority (71 percent) said their company's leadership should be communicating about it more. The study also pinpoints that while company leadership is perceived to be not talking about the recession, 74 percent of their colleagues and co-workers are talking about it, with 26 percent expecting layoffs.

Last December, Watson Wyatt released a study that conveys the opposite. Overall, it found 77 percent of employers have already sent out or are planning communication on the impact of the financial crisis. More than two-thirds (69 percent) of these employers cited easing employee anxiety as one of the top two goals of their crisis-related internal communication, while nearly one-third (32 percent) cited earning employees’ trust.

Are more employers talking, but fewer employees hearing?

When the intent of communication no longer produces the desired outcomes (such as alleviating employee anxiety), it's time to reevaluate the communication.

In this case, communication managers and executives might consider that addressing the financial crisis is not the same as typical or motivational internal communication — it's crisis communication, even if the company is not directly impacted by the crisis occurring around it. And while not every crisis communication step needs to be followed, there are several very important questions that leadership needs to ask:

Are we acknowledging something is wrong? While instilling internal confidence is critical, employers cannot outright dismiss the recession. It has to be acknowledged, even if the company is unique, or the message may not be believed.

Are we satisfying employee interest? Employees are talking about the financial crisis. Government is talking about the financial crisis. The media is talking about the financial crisis. The sheer frequency of all this communication suggests company leadership needs to consistently communicate its position and direction. For companies wondering how many times they might reinforce job security to their employees, there is one answer: as many times as employees need to hear it.

Are we communicating empathy? Internal communication is not exclusively internal. Internal communication influences front-line communication and is influenced by outside factors. Even if company is one of several viewing the recession as an opportunity as opposed to a setback, the communication needs to express empathy. Employee spouses, colleagues, and point-of-contact customers may have very different experiences.

Have we included positive steps being taken to address the situation? During a crisis, even if the crisis is external, every message needs to be reinforced by provable data and a positive direction, regardless of what that data might communicate. People are always more receptive to a clear direction, even if it includes some bad news.

If these questions remain unanswered, any communication may be rendered ineffective. Ineffective communication is non-communication and may not even register with employees. Given that internal communication is permeable, non-communication can contribute to external public sentiment. It may even be why the RBC CASH (Consumer Attitudes and Spending by Household) Index reported consumer sentiment is at a six-year low.

"At a time when working Americans are concerned about their personal finances, their jobs and the overall economy, employees are looking for credible, candid information, and right now too few business leaders are filling the information void that exists,” said Harris Diamond, CEO of Weber Shandwick. “Employers have a great opportunity to communicate with their workforce about the impact of the economic situation on their companies as well as on employees."

Isn't it obvious? Employees are not just employees. They are also consumers and shareholders. And right now, they are looking to the private sector, as much as government, to stabilize the economy. At minimum, they need reassurance that their company isn't waiting for someone else to come up with a solution.

Related posts:

• Ragan: Survey: Leaders Fail To Communicate With Employees

• British Association Of Communicators In Business: Recession Demands More Emphasis On Internal Communication Not Less

• Jenna Boiler: The Importance Of Internal Marketing

• Geneva Communicators Network: Employee Communication Spending To Rise In 2009

• Copywrite, Ink: Thinking Internal: Watson Wyatt Study

Thinking Internal: Watson Wyatt Study

Never mind external communication for a minute, think internal too. According to Watson Wyatt, more than one in five companies (23 percent) plan to make layoffs in the next 12 months, with almost two in five (39 percent) reporting that they have already done so. But layoffs aren't the only concern employees have.

Hiring freezes also jumped from 30 percent in October to 47 percent this month. Eighteen percent are planning a hiring freeze in the next 12 months. Salary freezes jumped from 4 percent in October to 13 percent. And 61 percent are revising merit budgets. Other changes include any combination of the following: travel restrictions, benefit reductions, restructuring, reduced training, health premium increases, and salary reductions.

“All indications are that 2009 will be a difficult year for both companies and ultimately employees,” said Laura Sejen, global director of strategic rewards consulting at Watson Wyatt. “It will be up to employers to find an effective way to manage this challenge by balancing their financial situations with the likely impact on employee engagement.”

Watson Wyatt's report encourages employers to help mitigate the effect of any decision by considering employee morale, including: choosing the greatest cost savings while doing the least damage to the company's employment brand; communicating extensively and frequently; differentiating bonuses and pay increases; and heightening employee recognition programs. Here are some additional tips from employee communication programs we have developed with several companies over the years:

• Educate supervisors about any upcoming changes first. Not only are employees likely to go to them with questions first, such meetings also provide a forum to prepare for any unforeseen questions.

• Allow supervisors to communicate the basics. Studies consistently conclude that employees trust face-to-face communication the most, and look to their immediate supervisors as the most credible source of information.

• Demonstrate consistency in communication. Depending on the changes being made, employ the company's standard communication model (face to face, video conference, etc.) as a means to connect employees to top executives.

• Provide employees with written material. The outline should include why changes are occurring, what changes are being made, the rationale behind those changes (it will save jobs), and a defined timeline for communication updates.

• Establish clear lines of two-way communication. When employees have questions their supervisors cannot answer, scale for appropriate contacts, such as designated human resources personnel and/or high level management. Collect feedback and address concerns in follow-up communication.

• Communicate straight. Provide employees with clear expectations of what the changes mean, what management expects to happen, what management expects to do if it does not happen, and the frequency of updates to come.

• Notify all external stakeholders as appropriate. Provide a consistent message, including to the media if appropriate, with similar commitments to keep communication candid, open, and honest. In every case, communication should flow from the inside of the company, out.

• Follow up the communication frequently. Communication from supervisors should be reinforced by other established communication channels (eg. bill inserts, newsletters, bulletins, etc.), demonstrating the progress of the plan. (Avoid e-mail notifications as electronic communication elicits stronger emotions and has a higher risk of being forwarded.)

• Increase management visibility. Change represents an opportunity for management to establish trust with employees. It is especially worthwhile for upper management to visit departments to recognize top performers and teams.

While one Gallup poll pinpointed that employees are hoping to be reassured that they have "stability, trust, hope, and compassion," the word to remember is empathy. Understanding a person's experience by sharing that experience, especially in regard to layoffs or temporary cutbacks, can help communicators and management avoid breakdowns that leave management appearing unconcerned and untrustworthy.

Keep in mind, like all communication, communicating change is not a cookie cutter operation. It is a process that guides communicators through a series of steps, allowing them to make situational adjustments. Almost every company culture is slightly different.

More importantly, internal communication remains top of mind because no amount of external communication can reverse employee morale once it is damaged. In some cases, the effects of improper communication won't be felt until an economic turnaround, when disengaged employees will quickly leave. Where will they go? Somewhere that has created a climate of trust.

Quoting Five: And Examples That Exemplify

While Thanksgiving might be an American holiday, the value of gratitude seems universal. Even in business, as Dr. Charles Kerns, author of Value-Centered Ethics, writes:

"Effectively applied in the workplace, gratitude may positively impact such factors as job satisfaction, loyalty, and citizenship behavior, while reducing employee turnover and increasing organizational profitability and productivity."

Then why does there seem to be some discrepancy in the application? After all, while approximately 70 percent of businesses intend to thank employees (American Express), only 25 percent of employees feel appreciated (Gallop).

Maybe the reason is simple. True gratitude requires something more than saying "thank you," sending out sentiments of such, or offering incentive programs that are eventually viewed as an extension of salary or an incentive. True gratitude requires someone internally recognizing that they have benefited from someone, and then expressed how that benefit has added specific value.

Five Timeless Ideas And Matching Examples

"Praise the bridge that carried you over." — George Colman

Illustrated by Edinburgh Day by Day

"The roots of all goodness lie in the soil of appreciation for goodness." — Dalai Lama

Discovered at DailyNebraskan

"Each of us has cause to think with deep gratitude of those who have lighted the flame within us." — Albert Schweitzer

Demonstrated by Taylor Sloan Presents

"As we express our gratitude, we must never forget that the highest appreciation is not to utter words, but to live by them." — John F. Kennedy

Exhibited by Ryan Anderson

"God gave you a gift of 86,400 seconds today. Have you used one to say 'thank you?'" — William A. Ward

Thank you. And Happy Thanksgiving.

Branding Employees: Chapel vs. Dell

While Tamera Kremer at Wildfire was covering the debate between RichardatDell and the fictional AmandaChapel on the value of making brand ambassadors out of employees, Adweek was covering Zappos.com. Zappos has already moved full steam ahead and is one of many companies that already consider employees brand ambassadors online.

In fact, according to the story, the vast majority of trial and repeat business at Zappos.com is driven by word of mouth and employees. Brian Kalma, director of creative services and brand marketing, employs the term "people planning," arguing that each employee needs to be a great point of contact with customers.

Indeed. So where is the debate?

Based on the comments on Wildfire, it seems Chapel was taking the position that “front-line folks that you’ve assigned to the ‘conversation’ on Dell’s behalf, particularly your Twitter social-media team, are making a complete mess of it.”

Richard has defended the Dell position by saying “We believe that social media helps us foster direct relationships, not just transactions with our customers. Think about your own customer relationships and to what extent they rely on the personal and professional interactions that you have.”

Amazingly, the debate seems to have some social media participants questioning the need to distinguish personal and professional brands online, a notion that seems contradictory to any sense of transparency that social media practitioners claim is critical to success. As I noted on Twitter, "trying to separate personal and professional brands is like arguing that you are a different person when you wear jeans or a suit." We can pretend people are somehow different, but it’s really not true.

Still, that is not to say employees acting as brand ambassadors can enjoy a free-for-all online. Common sense suggests if you wouldn’t say something to a customer offline, it’s probably a good idea to avoid saying it online, where it can be archived forever.

Look offline for online behavior guides.

This isn’t rocket science. The best companies already know that employees tend to be the best brand ambassadors, provided the company benefits from a strong internal communication program.

One of the examples I frequently share in explaining the impact of external public relations on internal audiences is how two different utility rate cases turned out. Without sharing the specifics here, one company started with a proactive internal communication program so by the time the rate case hit the papers, employees could explain the reasons behind the rate increase with friends, family, and neighbors. The other did not. The results were dramatically different, with one rate increase succeeding and other quickly turning into a crisis.

My point is simple enough. Front line employees have always been brand ambassadors. It’s not a new concept. So maybe the real question is: do companies realize blogging is front line communication and are they educating their employees well enough for them to deliver a return? Apparently, Zappos does.

Confusing Communication: 2.0 Blues

I’ve never been a big fan of attaching 2.0 to everything. Anymore, it seems cliché and tends to cause more confusion than it’s worth. But it is what it is.

Among the latest to get attention in 2.0 game is the Enterprise 2.0, which the Enterprise 2.0 Conference defines as “the technologies and business practices that liberate the workforce from the constraints of legacy communication and productivity tools like email. It provides business managers with access to the right information at the right time through a web of inter-connected applications, services and devices … and makes accessible the collective intelligence of many, translating to a huge competitive advantage in the form of increased innovation, productivity and agility.”

It seemed worthwhile to mention today in light of a study released by AIIM (hat tip: Chapel), which is a non-profit organization focused on helping users to understand the challenges associated with managing documents, content, records, and business processes. AIIM surveyed 441 end users and found that most recognize Enterprise 2.0 as critical to the success of their business goals and objectives, but few had a clear understanding of what Enterprise 2.0 means.

Specifically, 44 percent said Enterprise 2.0 is imperative or significant to corporate goals and objectives, but 74 percent said they only have a vague familiarity or no clear understanding of it. It's interesting to me because it’s almost the same answer from the polar opposite end of the spectrum of the Welch’s ad opinions.

Maybe we really need simpler definitions so people making decisions can understand what they think is critical to the success of their business. Really, all Enterprise 2.0 seems to be is utilizing social media tools for better cross-departmental internal communication. Now that seems pretty smart once you get past the gibberish that does the opposite of what Enterprise 2.0 is supposed to do.

Communicating To Employees: Obvious But Overlooked

Last Thursday, Joanna Blockey, ABC, communication analyst for Southwest Gas Corporation, help put the crossover impact of external and internal communication into perspective as a guest speaker in my Writing For Public Relations class at the University of Nevada, Las Vegas.

While Southwest Gas Corporation has a well-defined program, she pointed out that many companies do not. Some employers still believe that "providing a paycheck" is the company’s only obligation to employees.

“We communicate to approximately 3,200 employees and retirees at Southwest Gas Corporation,” said Blockey. “It would be a mistake to discount them because they are one of our most important publics. Every day, employees go home with a message about the company.”

And then what happens? They talk to friends and family.

Considering some studies place the average person’s number of friends somewhere between 25 and 35, one internal impression about a company can travel considerable distance. At Southwest Gas Corporation for instance, 3,200 employees and retirees could deliver 96,000 impressions about the company. If these friends pass that impression on to even half of their friends, the impression count suddenly reaches 1.5 million people. It doesn’t end there nor does it consider the number of employees who communicate online.

It didn’t seem like it in January, but Yahoo has learned this lesson the hard way. More than one employee has made their layoff public. This communication, which started with 87 connections on Twitter, has since circled the globe and been picked up by the media. That's just one person.

It's something we alluded to back in Jaunary. Employees don’t like the uncertainty created at Yahoo, a message reinforced by Jerry Yang, chief executive, when he botched the balance between being empathetic for the 1,000 employees to be laid off, which started last week, and being bullish on streamlining the company for non-internal shareholders.

Add up employee impressions alone and you'll discover Yahoo is struggling against the weight of more than 3 million low morale impressions per day, which doesn’t even count that some employees have hundreds or thousands of connections online. Suddenly, this seems to make the recently added "padded" severance packages, for employees and top executives in the event of an acquisition, not all that comforting. In fact, the idea of a Yahoo buyout doesn’t even seem very comforting to Microsoft employees either.

All communication overlaps, inside and out.

Seattle Times reporter Benjamin Romano recently published part of one Microsoft internal communication sent by Kevin Johnson, president of the platform and services division at Microsoft.

"While some overlap is expected in any combination of this size," it said, "we should remember that Microsoft is a growth company that has hired over 20,000 people since 2005, and we would look to place talented employees throughout the company as a whole."

It then when on to shed light on just how important advertising has become to Microsoft executives: "Respect for both the creative and analytical aspects of advertising is core to both companies, along with recognition that advertising is an industry that represents opportunity and growth."

The full communication seemed to have several purposes. In addition to fending off growing concerns that a Yahoo acquisition could lead to Microsoft layoffs, it’s a message to internal Microsoft shareholders (meaning employees). It’s also a message to Yahoo employees (who are also Yahoo shareholders). And, it's carefully written in case it might land someplace else like, um, the Seattle Times.

Communication doesn’t happen in a vacuum.

Watson Wyatt, a global consulting firm, released some key findings to consider about employee communication in its 2007/2008 report: Communication ROI Study
Secrets of Top Performers: How Companies With Highly Effective Employee Communication Differentiate Themselves.

• Effective employee communication is a leading indicator of financial performance.
• Effective employee communication translates into a 15.7 percent increase in the market value of a company.
• Effective employee communication increases employee engagement, which translates into better relationships.

The reasons are simple. There has never been a barrier between internal communication and external communication, except for the delusional beliefs of some executives. Simply put, if you cannot get the employees to buy into the company, then how you can expect customers to buy into its products and services?

People, like some companies, make the same mistakes.

The mistake in attempting to apply spatial barriers onto non-spatial ideas, as if things don't overlap, is not limited to business communication. It's an idea that keeps being transposed onto social media and social networks over and over again.

People attempt to define themselves like companies define themselves. They talk in terms that make the company-individual seem like it is the center of the universe with various social networks hovering around them like little planets, not at all different from the geocentric system debunked by Galileo.

Ergo, social networking is better represented by people orbiting an unknown center. On the Internet, they don't orbit a network but rather pass through networks much like they pass through networks in life. Their orbit takes them through this industry, that industry, work, home, friends, etc. Along the way, they leave little bits of communication.

Sure, I know this may seem terribly philosophical to some, but it’s the truth. Human nature is not all that different than nature, which is why employers need to ask themselves what they are communicating and where that communication will be left as their employees go about their daily lives. And then, where will that communication go from there?

Had Yahoo asked these questions months ago, I bet they would have considered a different communication strategy all together. You think?

Yodeling Less: Yahoo! Cut Backs

Yesterday, Yahoo! announced that what was expected to be hundreds of layoffs will be rounded up to more than 1,000 jobs cut. Unfortunately, the writing has been on the wall for some time as several Yahoo! assets were underperforming.

Yahoo Video fell 80 percent while traffic to rival YouTube grew by nine percent. Metacafe grew by 27 percent. Traffic on Yahoo! asset MyBlogLog, a social network for bloggers, has been declining since a poorly communicated move to Yahoo! IDs. Gmail seems to have an edge over Yahoo!
Mail, which is a bit more clunky than it used to be and is largely unusable by Safari (a small, but still viable percentage of accounts).

Not all the news is sour mind you. Yahoo! and AT&T are expanding their alliance. Yahoo! has cornered a big share of the $548 million market for online ad revenues for sports sites, says Forbes. And most people seem to like Flickr. Even their front page news is pretty good, even if you don’t use the search tool. These are just a few of the reasons I suspect people like the Silicon Valley Insider is calling for any ideas that might “help save” Yahoo!

Part of the challenge isn’t technology as much as it is communication, inside and out. Outside, members of various assets call Yahoo! unresponsive. Inside, layoff rumors have been whispered about for some time. Even The New York Times called said the Tuesday conference call droning and jargon filled.

Since the best communication happens from the inside out, it seems to me that how Yahoo! handles its layoffs will largely dictate how long the road of recovery will be. Large-scale layoffs, especially when no one knows which business areas will be hardest hit, can demoralize employees to the point of paralysis.

It’s especially important for Yahoo! to avoid the concept that there is some magical "clean slate" once layoffs are over. Why? As Umesh Ramakrishnan, vice chairman, Corporate Technology Partners, said: "The biggest challenge Yahoo! has is cultural. It's gotten away from the creative company it used to be—that's the difference between it and Google. Yang needs to bring that culture back and bring innovation to the forefront."

I could not agree more. Yahoo! needs to get away from being too myopic and retain some of the color and creativity that seems to escape every time it purchases a company. Instead of telling employees what to do and online members what will be done, invest more time into discovering why the acquisitions were performing so well to begin with, sans the Yahoo! brand.

By almost every account, Yahoo! is not a sinking ship. But it could be, unless someone inside makes a serious push to bring the passion back from the inside out. And that is always much more difficult to do, when almost one in 10 employees won't be there to help.

Parading Biegel: Creatively Naked

Lawsuits are odd things nowadays, sometimes serving as smear campaigns rather than the pursuit of justice for which they are intended. The case of Biegel vs. Denstu, as amended and made available by Ad Age, is one where it becomes very unclear which category it belongs.

Part of the reason is that the Biegel’s revisions further muddle events and allegations while placing even more aim on Toyo Shigeta, CEO of Dentsu Holdings USA as well as another senior executive at Dentsu. The new complaint even includes the web address of the now famous brothel (pictured) where it all went down.

Biegel’s revised complaint now reveals he wasn’t just motivated to stand up just because he was subjected to two years of repeated lewd and sexually harassing behavior, which included forcing him to engage prostitutes, view photographs of crotches, and get naked to “parade” in front of the accused at a Japanese bathhouse. No, Biegel was motivated because another employee was scheduled to take a business trip with Shigeta about two years later.

So Biegel confronted his employer on the presumption that this employee would also be subjected to the same humiliating and sexually degrading experience that Biegel had allegedly endured for years. This was also the time that Biegel chose to disclose that he ought to have reported the bathhouse incident (not necessarily the brothel incident) to human resources.

According to the suit, Shigeta’s attitude toward Biegel changed from positive to negative after that, with Shigeta virtually cutting off all communication between them. (Ya think?) And this is why Biegel now claims he was not only fired because of complaining about sexual harassment, but also because he is Jewish. Huh?

Is there a connection here or is this something out of pulp fiction? In any case, religious discrimination and defamation are added to the case. The latter is presumably because Dentsu denied the charges, which made Biegel look bad. Ho hum.

Meanwhile, Dentsu is standing firm in insisting that the allegations are patently false, and filed a motion to dismiss the complaint. Biegel, they say, ignored formal procedures for making grievances about sexual harassment by lodging claims more than a year after the alleged incidents took place.

Applying Ethics Against Harassment

While I can make no assumptions that any of this occurred or did not occur, I can share what might have occurred had Biegel applied ethics.

• Biegel could have warned Shigeta that he was offended immediately upon being taken to a brothel and took action to leave the brothel, especially after receiving “orders” to participate with prostitutes.

• Upon further insistence or threat, Biegel could have immediately told Shigeta that he would be reporting the incident to human resources.

• Upon further insistence or threat or inaction by human resources, Biegel could have filed a lawsuit.

Had any of this happened, there would have likely been no other occurrences either because Shigeta would have either understood the point or may have been terminated. But then again, there wouldn’t be $1 million lawsuit several years after the fact either.

As I wrote in post yesterday, fearlessness can serve people in business — being “forced” to parade naked in front of your boss would certainly qualify as the time to apply it.

Serving Up Stress: U.S. Employers

Watson Wyatt, an international association of human resource professionals, released a study today that may send shivers down the spines of management: a large majority of companies in the United States and around the world are struggling to attract and retain top-performing and critical-skill workers.

The study, which included 946 companies and a complementary survey of 13,000 employees, found that the United States has the highest median voluntary turnover rate, at 11 percent, while Latin America has the lowest, at 5 percent. In addition, more than half of the companies report difficulty retaining top-performing (52 percent) and critical-skill (56 percent) workers. But that is not the most significant finding.

What is most interesting to me is the apparent disconnect between employers and employees on pinpointing the problem. Fifty-two percent of the employers say the number one reason they struggle to retain employees is base pay whereas 37 percent of employees cite stress levels (base pay came in second, followed by promotion opportunities, career development opportunities, and work/life balance).

The study found that when employees are satisfied with stress levels and work/life balance, 86 percent are more inclined to stay with their company (versus 64 percent when dissatisfied) and 88 percent are more likely to recommend it as a place to work (versus 55 percent when dissatisfied).

“Worldwide, the frenetic pace of modern business is taking its toll on employees,” said Adam Sorensen, global total rewards practice leader at World at Work. “There’s no question that employees are more likely to leave or speak badly of their workplace if they feel overburdened. Companies that take steps to ensure that stress levels are not onerous will save money in the long run by reducing attrition.”

The concept that employees are feeling overburdened in the workplace is not new. There was an article by Douglas Ready and Jay Conger about this subject in the Harvard Business Review in June. The authors had conducted a study in 2005 that revealed virtually all companies indicated that they had an insufficient pipeline of high-potential employees to fill strategic management roles.

In the article, they pinpointed that passion must start at the top and infuse corporate culture; otherwise, talent management processes can deteriorate into bureaucratic routines. In other words, when you tally up the studies, companies are throwing money at employees but money does not make people feel passionate about their jobs, probably because the stress levels aren’t worth it.

Much like we see in social networks, it’s too much management and not enough leadership. And, obviously, there is a breakdown in communication because employers think that throwing money at employees reduces stress.

If there was better communication, companies would already know that it’s not the money, it’s the environment. Case in point: one-half of the companies said that their managers do a good job at performance management, but U.S. companies received the lowest management ratings (Asia-Pacific companies received the highest). Do you think there might be a correlation to management, non-communication, employee stress, and retention? Naw, couldn’t be. Could it?

What seems to be happening is that companies are attempting to bribe their way out of developing positive corporate cultures by increasing incentive programs while raising financial targets to earn those incentives. The reason they think it works is because the people most likely to be promoted and support these models are those who chased after financial lures in the first place.

But for the rest of the stressed-out workforce, they seem to be escaping through Facebook and other online social networks where they hook up with recruiters and potential employers who promise that the grass just might be greener someplace else.

Time out. That's not measurable, some might say.

“Unlike processes, which can be copied by competitors, passion is very difficult to duplicate. Nevertheless, there are companies that can build it into their cultures” — Harvard Business Review

The beginning of a solution is right in front of management’s nose (literally so if you are reading this post). More than anything else, companies that want to succeed tomorrow must invest in better two-way communication streams between themselves and their employees (never mind consumers for a minute). Because the simple truth is that if this communication existed, then there would be no disconnect between why employees leave and why employers think they leave.

So if you ask me, employers need to train management to be strategic and passionate leaders who motivate not just with Jolly Ranchers (like they try to do to my son when he is in school) but with open communication that instills a sense of passion and trust with the company. Training managers to communicate goals rather than enforce corporate policy is one solution. Closed social networks or even internal blogs for employees might be another (recognizing many social networks struggle with the concept of community).

“Employers that are best at building and maintaining the right workforce are often the best at aligning workers’ rewards with the company’s goals. Their performance management programs clearly communicate what workers need to do to get ahead and to improve company performance. This builds a sense of teamwork that makes it easier to retain employees, as well as attract high-potential newcomers.” — Watson Wyatt

Thinking Arrows: CBS Corporation

Steven Mallas with the Motley Fool called it right. Les Moonves, president and chief executive officer of CBS Corporation, sees CBS as a content king.

However, Nina Tassler, president of CBS Entertainment, recently said, because of social media (Jericho specifically), “…So I think we are looking at a shift and a change." And with the EyeLab concept, which will give consumers the ability to create short-film clips by editing content from CBS shows, some insiders are calling CBS a “next-generation studio.”

So which is it? Consumers are asking. Some are speculating.

“I do not think CBS even has people in place to evaluate and determine whether or not an opportunity is good for them,” commented Jericho fan blogger Terocious in response to our Tuesday post. “I think the company's success with new media must be coming from a small minority within the company who sees the possibilities and is pushing for them.”

Small minorities who see possibilities and push for them.

I agree. This seems to be happening inside CBS. But will that work?

Let’s imagine Moonves as an archer. He wants to hit the bulls-EyeLab for viewers, critics, shareholders, and, well, lots of different publics. If he does, then he is an expert. The ratings come in. Fans love the company. The stock soars. Everybody makes money, a portion of which is invested to make even better content.

Of course, it’s not that easy. There are a great number of variables, just like archery. Maybe the archer needs glasses. Maybe the environment is bit windy and could blow some arrows off course. Maybe the best arrows are too expensive so some of his arrows are slightly inferior compared to others.

Add to all these challenges: arrows that have minds of their own. Right. Unlike real arrows, each CBS arrow represents a small minority of people within the company who want to fly in a slightly different direction because they see a better target or want to adjust for the wind or whatever the case may be. Well, your chances of hitting the mark are suddenly pretty thin.

Successful communication requires one archer with great vision and unwavering arrows.

Companies that win have a quiver full of arrows that will always fly in the same direction. They will likely hit the mark, every time. Or, maybe they have an archer who is intuitive enough to listen to what the arrows are telling him or her and adjust. Either way, it works.

Some people like to tell me this is impossible, especially with big companies like CBS. They tell me that building internal consensus within a big corporation is an impossible task and maybe a waste of time. But that’s not exactly true. We do it all the time.

Teaching archers and arrows to work together and hit the mark.

A couple years ago, I was hired by a major utility to help create a graphic standards manual so its identity would always have some semblance of consistency (eg. no pink logos). The challenge, I was told, was that everybody — some 40 stakeholders within the company — all had different ideas about the company’s identity. (In other words, lots and lots of thinking arrows.)

What I really wanted to do was to use our core message process because one of the benefits is consensus building. But the utility wasn’t really interested because, they said, the geographical distance between several divisions was too far. So, even though we could not use a core message process, I applied a similar method that did not require all 40 stakeholders to be present at once.

I surveyed the arrows, um, stakeholders by e-mail; and then I followed up with interviewers. By the end of my research, I came across a surprising conclusion and laughed out loud.

All 40 stakeholders believed they were the only ones who understood the identity of the company. However, all 40 stakeholders had the same view. They just didn’t know it!

While that doesn’t always happen, it put us in the position to develop graphics standard manual that the arrows felt pretty good about. They liked the diection. Even better, the archer (the communication director in this case) felt very confident in being able to hit the mark every time, no matter who held the bow. They did.

The best external communication works from the inside out.

In sum, all this means is that for companies to succeed with communicaiton, the archer and all the arrows have to agree on the mark and the direction they must travel to hit that mark.

Or, in other words, if they can agree internally, then it’s easier to move a consistent message out into the mainstream. Unfortunately, especially with the advent of social media, more and more companies are sharing their internal opposing viewpoints with the outside world.

The result is mixed messages that leave consumers confused, frustrated, or worse, disenfranchised because nobody believes what the company is saying half of the time. From what consumers are telling me, that is what is happening at CBS, most major networks, and too many companies on or off the net.

Communicating For Success: Social Media

Over the past few weeks, I've infused a few posts on how understanding traditional human capital and internal communication might cross over into social networks. For the most part, it included theory without a proven case study.

When I wrote the article, I turned to Southwest Gas Corporation (Southwest Gas) to provide a case study because I knew it was the fastest-growing natural gas company in the United States and consistently benefited from an exceedingly strong internal brand. What struck me about the company then (as it does today) was that its employee-to-customer ratio had increased from 1:415 in 1994 to 1:537 in 2000, but the average employee had 11 years in with the company despite being largely based in a market where 2-3 years was the norm.

"We've continually asked our employees to do more with less," said Robyn Clayton, then manager of consumer and community affairs. "In return, we work hard to provide a satisfying culture and keep them informed. The result is a motivated, loyal workforce."

When Southwest Gas projected natural gas rates would rise the year before, it launched an internal communication plan months before the rate increase impacted the company. Because its leadership recognized that employees would be asked questions by family, friends, and customers in the field, early internal education proved vital to the success of the company (the model still used today).

"By developing a long-term plan that demonstrated we were forthcoming, employees and customers were mostly positive about the increase," explained Clayton. "It was challenging, but we succeeded in empowering our employees and eventually our customers to understand our rates reflect the market."

In other areas, Clayton said internal communication is consistent across departments and several vehicles are in place to keep employees informed. Each update is tied to a specific medium (print, video, etc.), depending on which best communicates the information. Tracking results is fundamental.

"Several months ago, we evaluated the need for an employee video," Clayton said then. "We found that the employees valued it, but wanted shorter programs. Today, we met those needs instead of cutting the program."

The company, which has maintained a successful volunteer program since 1985, also provides community service opportunities on company time. The investment has been returned tenfold: increased involvement, a stronger brand, and personal/professional development for interested employees.

"We have developed a culture that values service to our community," said Clayton. "It has given many their first experience and nurtured lifetime volunteers. Today, our employees take pride in the program and it attracts people with similar values."

It seems understanding human capital has paid off for the company: long-term employee recruitment, retention, succession, and culture building are as vibrant at the company today as it was when I interviewed Clayton then.

Applied to social media, similar (if not the same) results can be achieved by nurturing online cultures even more effectively than print, video, or other communication devices alone. It doesn't matter if the network is an added function of an Intranet or Internet.

Internally, social networks, assuming the communication is well crafted, can be employed to reinforce corporate culture, encourage isolated departments and remote locations to work better together, provide better access to top decision makers (such as a CEO), and educate employees about upcoming corporate changes in real time, which would help minimize any damage caused by misleading internal or external gossip (assuming the executive team doesn't start the rumor).

Externally or even independently of a company, the same techniques can be applied to an online community. While members of a social network are not employees, they do consist of a structure similar to any organization.

As such, they too have human capital. By increasing communication from key stakeholders and the most active members outward, social network stewards might be better able to manage anything and everything from complete network redesigns to the tone of the participants without enforcing rules or expectations that drive members away. As leaders, the most effective social network stewards set the tone and agenda through example much like the best run companies set the tone and agenda for employees.

Demonstrating Leadership: Social Media

A few days ago, I mentioned a distinction between management and leadership of a social network. But the difference doesn't just apply to social media, it applies anywhere there is human capital.

Much like companies or organizations can apply the concept "human potential is an asset" internally (employees or members), they can apply the same thinking to social networks and online communities, which are made up of seemingly uncontrollable people. These people don't need management like Andrew Keen or the collective Amanda Chapel prescribe, both who fail to see "human potential as an asset" but rather as something that needs to be managed.

No, no, no. Any time the rules of management are applied to people, especially online, things go terribly wrong. Given tomorrow is Independence Day in the United States, it seems almost too fitting to point out our country was founded on the distinction between management and leadership. Oversimplified, but accurate. England had attempted to manage the colonies. John Adams, Benjamin Franklin, Thomas Jefferson, Robert R. Livingston, and Roger Sherman (among others), offered something else — leadership.

Whether it be the day-to-day operation of any business or social network, if executive and network owners recognize their members as human capital and connect with them, their ability to demonstrate leadership can accomplish great things.

In my study of human capital a few years ago, Geri Travis, senior vice president of Aon, a Fortune 500 consulting company, filled me in. She said that any time management can connect and communicate with employees, it develops credible leadership.

There is no question. Credible, involved leadership—through direct contact, communication, and team leaders (if that applies)—will build employee loyalty, which will translate into loyal customers. In determining the value of an employee, Travis said companies need to look beyond the cost of replacing an employee. Rather, the real hard costs are determined by looking at how many people a disconnected employee impacts every day.

"If employees feel discounted from the company on the job, you have to wonder how much business is at risk," she said. "When companies are in crisis, the consistency and frequency of communication can be just as important as the message. Suspicion and mystery can cause employee disconnect more than the crisis."

At the time, it was apparent that companies were finding ways to do more with less. Travis said that inclusion remained the best solution. Along the way, quantitative (eg. surveys) and qualitative (eg. focus groups) measurements can help create a dialogue between management and employees. (Today, social media can add to the dialogue with employees, and also consumers.)

"Companies spend millions on branding their product, but not their people," Travis said. "Yet, by defining the culture of the company, you would be in a better position to retain, recruit, and build loyalty with the kind of employees you want."

It is sound advice that can be applied anywhere. Much like the best companies, the best social networks are those that lead people. For example, Antony Berkman at BlogCatalog is challenging bloggers to do good by collectively writing about social awareness issues. Or, in a strange sort of odd, loud, and unpredictable way, The Recruiting Animal at RecruitingBloggers.com often skips over the body of an idea and goes for the engine. While their styles are vastly different (which is why I picked them), both are very adept at defining an online culture through leadership, not management.

In sum, if you want to build a successful online community, treat it like a successful business that is sensitive to human capital. Manage the site, widgets, links, etc., but not the people. All people need, much like the greater online community, is a little bit of leadership.

Understanding Connections: Social Media

As part of my study of human capital a few years ago, I tapped insights from a fast growing company called Direct TV. At the time, Direct TV was simply known as a company to watch. Today, it is the largest provider of DTH digital television services and the second largest provider in the multi-channel program distribution industry in the United States.

What Direct TV understood then, and still does today, is that even "soft" employee programs foster better communication. While social media was barely a blip on the radar of communication, it doesn't take much to see how what was being done then could be reinforced with the tools we have today.

"Fifty to 75 percent of our employees at the corporate office attend every program," said Caroline Leach, ABC, then senior manager of employee communication for Direct TV (now vice president of communications for Direct TV). "Typically, we host them at noon or late in the day. Sometimes it's a recognition program or simply coffee and donuts with executives. They help maintain our family-oriented, entrepreneurial style."

While some companies will always remain skeptical of employee programs, Direct TV found they worked well in moderation. Specifically, they connect employees to management, exposing people to different departments they had no contact with, and generate new ideas. The programs were augmented by a well-defined, integrated employee program, strong benefits packages, and performance incentives.

"Measurement is key to understanding what your employees want," Leach said. "For example, we survey employees electronically after every company broadcast, which gives us an immediate response to how well the information was received. The surveys are anonymous, which empowers the employees to give us candid feedback."

From a broader perspective, the company's (then eight years old; now 13) strategy was simple. The executive team communicated the top one to four quarterly goals to each department while managers were charged with translating these goals into terms that individual employees can apply.

At the same time, employees were empowered to be part of the decision-making process. After the company implemented quarterly bonuses (based upon earlier satisfaction with annual bonuses), employees evaluated and eventually requested an annual bonus over four quarterly bonuses.

The reason in 2002: because Direct TV is an industry with seasonal growth, non-performing quarters (without bonuses) were found to be disheartening and counterproductive to the overall success of the company. The old adage "success produces success" stands.

"Employees also prefer to get most of their information direct from supervisors," said Leach. "We try to augment any communication with face-to-face communication. Our president's day breakfast with 8-10 employees, for example, has a powerful ripple effect throughout the company when the employees return to their departments and share highlights."

Flash forward to today and it is not difficult to imagine how internal social media might have been employed to augment such proven internal communication practices. In fact, it demonstrates something that we've offered up here on several occasions. If 8-10 employees can create a powerful ripple effect throughout a company after a single breakfast with decision makers, imagine what 800-1,000 readers might do after reading an authentic executive post where they can engage the executives by asking a few questions on an Intranet. Hmmm... virtual coffee and donuts with that many more in attendance.

In addition, through such online interaction, companies might be better equipped to solve a growing problem for many businesses (according to an article in the Harvard Business Review, which I'll be writing about later this week) and that is developing a talent factory to fill what seems to be an ever-shrinking pool of strategic thinkers.

Sure, I doubt social media will ever replace face-to-face communication as the most powerful tool in the communicator's arsenal, but it stands to reason that more companies will find unique internal communication methods that demonstrate social media will become the second most trusted source of information within a company (assuming the company does not over-propaganda it).

And, if it can work within a company to provide a bird's eye view to keep departments up to speed, then what is the difference between an internal social network or one consisting of loyal consumers? Virtually none at all.

Revisiting Human Capital: Social Media

Yesterday, when I wrote about David Meerman Scott's book, something stuck in my head: social media is a medium about people. It wasn’t until this morning that I realized why it stayed there. It reminded me of an article I wrote some time ago about human capital.

Human capital is nothing new. Borrowed from economics and broadened to reflect human potential as an asset, it has been contemplated by organizations for more than a century. It has also been proven to be critical to success and tied to shareholder value. (One Watson Wyatt study concluded that firms with high employee commitment averaged three-year returns of 112 percent while those with low employee commitment averaged 76 percent.)

Back when I wrote the article, I was asking experts if human capital was so critical, then why do companies lay off employees anytime increased competition cuts into profit margins, economic conditions deteriorate, or a crisis occurs. While some people pointed to the concept that layoffs are “just part of business,” I found another answer all together.

While there are times when there is no other option than downsizing (eg. a high growth company over staffs), most companies have another reason for laying people off — they don’t know who their employees are, which makes them expendable.

“Executives and managers pursuing their MBA are not taught people skills or how to manage employees,” James Lukaszewski, one of the most prominent advisors and crisis communication strategists in the country, told me then. “In most companies, there is a clear division between management and employees.”

The division, more often than not, is non-communication. Employees do not have a clear understanding of what they are supposed to do and, from executive management to key supervisors, no one knows how to tell them.

“Negative communication is non-communication,” he said. “Managers and supervisors are so busy telling people they did it ‘wrong’ or ‘that’s not the way we do it,’ they forget to tell employees how to do it, if they say anything at all.”

Rather than evaluating employees on what they did wrong or focusing on what they did not accomplish, Lukaszewski said companies are better served by applying positive communication that clearly defines what to do next. If they know where the department or company is going and what they can do to get there, it will produce more positive opportunities for the future.

“Yesterday is over. And frankly, it doesn’t matter,” he said. “Companies that will succeed are outcome forward. It’s human nature for people to want to please their supervisors so it’s up to supervisors to show them how to do it.”

We then went onto discuss employee evaluations (noting, at the time, less than 40 percent of employees received meaningful evaluations because they were outdated, did not reflect job descriptions, or were misunderstood by supervisors). But that drifts too far off topic to share as this post applies more to social media.

If you’re a communicator or public relations practitioner who wants to embrace social media but cannot seem to find any executive support, the first step is education. Much like their own employees, most executives have no idea who bloggers, vloggers, and podcasters are because they’ve gotten it into their heads that they are bathrobe experts with blow horns, not to be taken seriously.

Sure, it used to be that way, but not so much anymore. Everyday, I see more and more experts breaking into social media because they are beginning to understand that this medium is about people.

Why should executives care? Well, it seems to me that some bloggers are starting to understand employees, consumers, and even shareholders better than most companies understand these publics. And unlike journalists, some bloggers could care less about being objective or sourcing two sides of the story.

How is that relevant? For companies that do not have a social media presence today, it's more than relevant because if the company doesn’t understand or have the ear of its employees, consumers, and shareholders, then certainly, someone else will (most likely someone in social media).

Currently, most companies treat bloggers just like employees. They ignore them, until the blogger writes something they don't like. Only then will the company address what the blogger wrote to say it was ‘wrong’ or ‘that’s not the way we do it,' as if to imply some secret method to the madness exists behind closed doors (rarely).

That's backwards thinking and I'm not surprised. There are plenty who like to pretend product and price is the end all to everything. In fact, these are the same folks who think backwards about media too. (Please write about us when we need help promoting a product, but kindly stay away when dark clouds loom on the horizon).

Instead of ignoring social media, companies might consider that the social media represents a great communication tactic to reach people in various publics and, if done correctly, better tap into the idea that human potential is an asset, inside and out.

There are several ways to do this with social media: establishing a direct connection with employees, better understanding consumers and motivating them in way that they assist in marketing efforts, or considering that the double-edged single-view sword of blogging can work for a company as much as it can work against it.

Ergo, if social media is a medium about people, it might be time to consider how social media could enhance human capital. But, of course, this assumes you have the right message to communicate anyway. Unfortunately, most companies and organizations are still struggling with that. (Hint: what consumers, employees, and shareholders value is almost never what top executives value.)