Internal communications in New Zealand

Perceptions around organisational and employee communications in New Zealand – a discussion paper

www.ideasshop.co.nz
Contents

Introduction 3
Internal Communications – why it matters and where it’s heading 4
Raising the Bar on Internal Communications in New Zealand 6
Detailed Findings
Value 7
Strategic Versus Tactical 8
The Role of Senior Leaders in Internal Communications 9
Leading Internal Communications 10
Resourcing 11
The Internal Communications Toolbox 12
Internal Communications Strategy and Engagement Linkages 13
Measurement 14
Cross Cultural Communication 15

Published in October 2008 by Ideas Shop Ltd

2
Introduction
Today, it is well recognised that no company, large or small, can expect to be a
high performer in the long term without energised employees who believe in its
mission and understand the contribution their role will make in achieving success.
Internal communications, also known as employee communications or
organisational communication, is a key contributor to the conversations that need
to happen between managers and employees about the organisation’s strategy.
Done well, internal communications helps employees to understand the
organisation’s vision, values, and culture. It may involve staff members in issues
that affect working life and keep employees informed about key organisational/
management decisions.
Ideas Shop has been working with large and small organisations in New Zealand
and Australia on internal communications and change management. Over the
past decade there have been enormous changes in the quality, channels and
sophistication with which organisations have viewed and implemented their
internal communications.
To better understand the current state of internal communications practice in New
Zealand, Ideas Shop invited internal communications practitioners from Auckland
and Wellington to talk about how the internal communications function operates
within their organisation.
A series of 52 qualitative interviews were conducted with key internal
communications professionals and senior managers over the period March – June
2008. The interviews were conducted both face-to-face and over the telephone
and ranged in length from five to 35 minutes in duration.
Respondents came from a range of sectors including telecommunications and ICT,
central and local government, financial services, primary production and health.
The majority of the organisations had staff of more than 1,000 and all had people
spread throughout New Zealand. Some organisations were part of multinationals
or had an offshore presence.
The key areas discussed were: leadership; strategy and planning; the internal
communication function’s role; channel management; and impact measurement.
We also canvassed practitioners on contemporary issues, including how
strongly internal communications are being used to assist in building employee
engagement, and cross-cultural communication practices.
The results were compared with international research from Melcrum, Towers
Perrin, IABC Research Foundation’s Best Practices in Employee Communication:
A Study of Global Challenges and Approaches, and the work of Bill Quirke
(Synopsis) and T. J. Larkin.
This report provides a snapshot of how the internal communication discipline is
operating in New Zealand and a starting point for discussion among New Zealand
public relations professionals about how we can improve.
The confidentiality agreement between Ideas Shop and the interviewees mean that
neither the name of the respondents nor their organisations can be released. This
anonymity was adopted to ensure the responses were frank and objective.
3
Internal Communications – why it matters and where it’s heading
Organisations are typically keen to engage their people for a variety of reasons.
They want to unleash the talent and energy of their people, give them strong
personal ownership for delivering their goals, impart a sense that everyone is
working for the same business and harness their drive to tap into discretionary
effort and achieve extraordinary things.
They also want to create a buzz around the workplace so that people enjoy
coming to work, feel it’s a great place to be and create a virtuous upward spiral
of engagement and energy.
In 1994, James Heskett and his colleagues at the Harvard Business School published
a paper titled ‘Putting the Service-Profit Chain to Work’. That research clearly
showed the link between engaged employees, customer satisfaction and profit.
It also pointed to a single important factor in employee engagement, the one
thing that underpins it all - open communication. Employees have to feel
informed of, and involved in, a company’s direction in order to support and
actively promote whatever that direction may be.
It is in fulfilling this function that communicators can make the biggest
impact in any organisation; while it needs to run deeper than just the internal
communications department, corporate communicators can play a huge role in a
company’s engagement efforts.
If organisations are to engage their people, they must ensure everyone
understands the key business issues - the ‘why’ as well as the ‘what’.
They must also ‘make the connection’ to show how individual success
contributes to company success. But understanding on its own is not enough.
Commitment comes from a sense of engagement – the winning of hearts as well
as minds.
Engagement involves employees feeling a strong emotional bond to their
employer, recommending it to others and committing time and effort to help the
organisation succeed.
In 1999, Gallup published research that showed engaged employees are more
productive, more profitable, more customer-focused, manage risk better and less
likely to leave their employer.
But while organisations like to promote the idea that employees are their biggest
source of competitive advantage, the reality is that most organisations struggle
to leverage the different parts of the organisation as effectively as they could to
recruit, motivate and retain capable workers .
Our research shows New Zealand internal communications practitioners are still
more focused on tactics than strategy and primarily use written communications
to deliver messages, rather than having the resources and senior management
support to implement best practice methods that create two-way conversations.
In addition their communications plans are rarely linked or developed alongside
staff development and engagement strategies. Measurement is also ad hoc, with
very few organisations achieving ‘best practice’.
The research reveals that these most likely stem from a lack of understanding
amongst senior leaders about how internal communications can best contribute
to business sucess. Most senior leaders saw internal communication as an
4
Internal Communications – why it matters and where it’s heading

output and ‘soft stuff that is nice to have’. Most did not fully recognise the extent
of their role in driving effective internal communication.

Most senior leaders tend to be focused on the ‘hard’ measures, delivering the
required outcomes on time, on budget, and on target. The ‘soft’ stuff is all too
often done as an aside, or left to human resources. Awareness raising is required
to ensure senior leaders realise that the soft strategies foundation of hard
strategy success.

In contrast, communications practitioners recognised the importance of senior

leadership buy-in ownership of internal communication as significant to success,
particularly around communicating and embedding organisational strategy, or
significant organisational change.

They would also like to involve senior leaders more in the day-to-day
communications and start to shift the communications from ‘delivering
messages’ to have richer conversations with staff.

The perceived lack of value for internal communications amongst senior

leaders is not unique to New Zealand. Watson Wyatt research in 2006 showed
employers devote far more resources to top-down communication (management
emails, newsletters) than to upward or two-way communications (employee
meetings with senior executives, focus groups). A mere 4% of companies
surveyed rate their upward communications programmes as “excellent” and
just 27 percent rated their performance in this area as “good”. Less than half
regularly measured their communications, either formally or informally.

The result is a missed opportunity both in terms of productivity and profit.

5
Raising the Bar on Internal Communications in New Zealand

International research is clear that improving the effectiveness of internal
communication has a direct link to increasing organisational performance and
engagement, and therefore market value.
Good organisational communication creates more engaged employees, who
create more loyal customers, who in turn create bigger profits.
The following five steps are crucial if we are to achieve more effective internal
communication in New Zealand organisations:
The challenge is for senior managers, internal communicators and human
resources professionals to work together to develop and implement effective
communication programmes and measurement mechanisms that will make a
difference to the performance of their organisation.
The changing role of line managers in internal communication
From

1. Clearly link internal communication delivery with organisation and business/

organisational benefit. + Information is power
­+ Command and control
2. Involvement of internal communications specialist advice during strategy ­+ Ring fencing any crisis
development rather than at the end of the process, particularly around ­+ Waiting until the ‘solution’ is ready
employee value proposition/ internal brand, engagement and change
management.

3. Strong linkages between human resources and internal communications; and

To
internal communications and external communications. ­
+ Adding local context to news/ information
4. Specific expectations around internal communications practice – including ­+ Encouraging and sharing feedback
the role of people managers, link to reward, and agreed measurement. ­+ Providing a route-map through complexity
­+ Role model for vision, values and business priorities
5. Implementing cost effective and robust measurement around internal
communications.

6
Detailed Findings – Value

Senior managers understood in principle the value effective internal

communications can deliver to the success of their organisation. However, the
majority of respondents (75%) did not believe internal communications was
as good as it could be in their organisation. The reasons cited for this included
skepticism within the organisation, issues around delivery, lack of internal
communications resource and underdeveloped communications channels.
Leadership was only cited a couple of times as a core issue.

The majority of managers said internal communication was generally left to an

internal communications function to develop and implement through agreed
channels (newsletters, intranet etc). Leaders perceived their role as primarily
“delivering to staff what our internal communications manager produces”.

Few involved their internal communication practitioners in the strategy

development process. In fact, a number noted that external relations staff were
more often involved.

This combination of factors seems to be contributing to the fact that internal

communications practitioners are heavily focused on the tactical aspects of their
role and are not involved in the front-end strategic planning around the issues/
announcements that will affect staff.

It will also be contributing to a lack of cross-functional alignment between human

resources, internal communications, external communications and business
strategy teams.

7
Detailed Findings – Strategic Versus Tactical
Most internal communicators consider their output to be right in the middle
of the Strategic-Tactical continuum, with most saying they spend less time on
strategic issues than on the tactical side of their role.
“Depends on level of the manager and advisor working together, and/
or specific requirements. We aim for the strategic advice level but often
end with the doing - we are best with words! Some very good strategic
thinking comes from the Comms team and this is recognised as such by
many managers – but equally some managers just want the words and
some advisors oblige and don’t push the strategy.”
Most internal communicators would like more involvement at the strategy and
planning level. Many of the respondents commented on the fact that they were
not involved in the planning and strategy stage of communications around a
business decision, but rather were brought in after decisions were made to
‘make it happen’. Most have a desire for, and recognise the benefits of, stronger
linkages at a strategic and planning level.
For those who were involved in strategy development, there was a clear sense
that the involvement made it easier to manage external and internal risk, and
build an effective communication programme.
They are also aware of the benefits of devolving delivery to people managers,
both in terms of effectiveness and to drive greater employee engagement.
However, the current reality of the internal communications in most New Zealand
organisations is around key deliverables, leaving little time for strategic input.
“There are not enough of us to avoid the tactical and we still get treated
like a typing pool at times by senior managers.”
Senior managers were largely ambivalent about the necessity for their internal
communications resource to be more involved at the front end of strategy
development, although one manager had just started to include their internal
communications manager and said there was a clear positive impact.
8
Detailed Findings – The Role of Senior Leaders in Internal Communications
Most internal communications practitioners either consciously or inherently
understood the importance of senior leadership buy-in ownership of
internal communication, particularly around communicating and embedding
organisational strategy, or significant organisational change.
However, the perception of most senior managers spoken to was that internal
communications is purely a delivery function. Although well utilised (often to the
point where capacity is entirely stretched), internal communicators are working
mostly on tactical outputs. There is no broad understanding of the strategic role
that internal communications can play to positively impact engagement and
ensure awareness and understanding of key company information.
“Some managers can have a narrow view of what comms provides (seen
as media, writing speeches and publications, wordsmithing) – others
recognise strategic importance and value-add.”
The lack of involvement of internal communications in the planning phases of
projects is a clear indicator that most managers see it as a delivery function.
“They see internal communications as part of the end of the process when
they are telling staff decisions and don’t feel they need to engage staff
during the process.”
There is a varied level of recognition that effective internal communications
strongly relies on the engagement of senior leaders and people managers.
Managers did not fully recognise their own role in driving effective
communication in their organisation. Instead, internal communication delivery is
often seen as solely the responsibility of the internal communications team.
“Internal communication is not recognised at all as a key area of
management expertise. With the establishment of our centralised unit it
seems it is now seen as solely our responsibility and this is a weakness.”
As a consequence, for many organisations there is very little expectation
of managers in terms of internal communications. The majority of internal
communicators expressed some frustration at the lack of regular face-to-face
communication between staff and managers and feedback mechanisms.
Some organisations have greater expectations of their managers and include
communications outcomes in performance objectives.
“I have been able to have internal comms included in the orientation for
new managers which felt like a major victory. I am continually pushing for
the importance and selling it to managers but it is an uphill battle.”
9
Detailed Findings – Leading Internal Communications
The group or function that internal communications is attached to varies
across organisations. Most practitioners report into a corporate affairs or
communications group. Other groups reside in human resources, public affairs,
strategy, marketing and CEO support.
Leadership access is seen as more important to the success of internal
communications in an organisation than where the function sits.
“Our place in the organisation works because the connection with
management gives an understanding of strategic direction from the inside,
reach, and the ability to connect with the right people and make things
happen.”
Access to leadership is easier in smaller organisations or in the private sector
where corporate affairs is usually incorporated within the leadership team.
A strong connection with strategy and planning teams and human resources
were also noted as a real benefit in terms of the structural fit of internal
communication.
“The link with strategy is really helpful. Previously my area sat within
marketing and there are links with marketing but this current arrangement
works better.”
The need for a strong link between human resources was a common theme, and
noted by those senior managers interviewed:
“We probably don’t do enough in terms of linking our internal
communications and HR strategies. At the moment, most of the internal
communications is an add-on that comes at the end, rather than sitting
down during the organisational development strategy process and saying,
‘what are our channels and how are we going to best get these messages
out and embedded in our organisations’?”
The link between external relations and internal communications was also noted
as important but not always as strong as it could be.
“I’m not sure our media relations people really understand what the
internal communications team does or how we can really support them to
actually build a better external brand presence. We have several thousand
employees who are our best advocates but often our external and internal
messaging are either not aligned or just out of sync.”
10
Detailed Findings – Resourcing

Resourcing issues tend to focus on the need for more full-time employees and
the experience levels of current staff, rather than insufficient budget.

There was a clear sense that opportunities for improving internal

communications were being missed because of the lack of ‘people on the
ground’, and the heavy emphasis on delivering specific outputs (an intranet or
newsletter were often cited).

Currently, in most organisations, responsibility for internal communications rests

with practitioners, rather than senior leaders and people managers, with internal
communications acting as an enabler/ support.

“Right now we do it all. Managers don’t have the expectation to

communicate. It is a model that puts a huge onus on a couple of people
and is frustrating in that managers are so underutilized as communicators.
It would be so much more effective to use our managers as a key
channel.”

Internal communications is not always recognised as a specialist field and so

there is often a lack of skills training to ensure that staff have the appropriate
knowledge/ capability.

11
Detailed Findings – The Internal Communications Toolbox

Internal communications specialists are heavily involved in “written”

communications and under-utilised in providing the training and support required
for managers to be effective face-to-face communicators.

The most common channels being used are the intranet and newsletters.

Most internal communicators expressed satisfaction with newsletters, rating the

channel highly as a means of effective internal communication.

“With staff spread geographically, newsletters are the most effective

way of reaching our staff, conveying company culture and passing on
information about what is happening in head office and in the regions.”

The majority of internal communicators express dissatisfaction with their current

intranet and over half were in the process of refreshing structure and content.
There was a belief that effectiveness would increase substantially following
redevelopment.

For the majority of organisations surveyed, there was a sense that managers
placed a low priority on regular face-to-face communication and internal
communication being left to the “specialists”, i.e. the internal communications
team.

Research by global professional services firm Towers Perrin shows leadership is

the single most important success factor for internal communications. A person’s
direct manager is the employee’s preferred source of major information and the
key face-to-face channel.

12
Detailed Findings – Internal Communications Strategy and Engagement Linkages

About half of the organisations surveyed have a formalised internal

communications strategy in place that links in some way to the business
strategy. Of those that do not, about half of them are about to develop one.

However, the survey found that alignment between internal communications’

strategies and organisational development strategies tends to be limited. This
is not surprising given the siloed organisational structure in which internal
communications is separate from the human resources team.

Where organisations have an engagement programme (about half), there are

internal communication aspects incorporated and measures included in the
engagement survey, although these tend to be very high level.

Some organisations have achieved a high level of alignment with links being
obvious.

“Our comms planning is built around our engagement results. We see the
whole continuum. As part of that there is communication direction in all
areas so that the ‘line of sight’ links are clear to staff. We have also just
hired a specialist engagement communications person.”

13
Detailed Findings – Measurement

Overall, measurement activity is quite low with a number of communicators
expressing the desire to measure more frequently but lacking the resources to
do so, and not necessarily being aware of some of the lower cost options.
One organisation holds quarterly audits to measure communication around the
business strategy - an annual engagement survey that has a substantial internal
communication section - and they conduct snapshot surveys throughout the
year to measure the success of individual initiatives. This was the closest to
best practice identified in the survey.
At the other end of the scale, the majority of organisations took a more ad hoc
approach, relying on feedback on the intranet or informal unsolicited feedback.
There was slightly more measurement of individual initiatives to test whether the
initiative has succeeded in achieving objectives.
“We don’t measure our overall strategy but for each initiative we measure
the success of it using an online survey tool. We get a great response to
this and think people really engage with this process.”
There was general recognition that more robust and regular measurement was
needed to demonstrate the linkages between effective internal communication
and building engagement.

Often measurement is more about whether staff like the channels used, rather
than whether the messages carried through that channel are changing attitudes
and influencing behaviour.

“We get great feedback on our newsletter. It is very popular and we

have had other agencies asking for copies of it so that they can copy our
format.”

14
Detailed Findings – Cross Cultural Communication

Most public sector practitioners were highly aware of the need for different
approaches for different cultural communities, and age groups. However, few
had the time or resources to do this on a regular basis.

Interestingly, a number of public sector internal communicators noted that

their external communications campaigns, particularly when related to social
marketing campaigns, were far more sensitive to cross cultural factors than
internal communications programmes. This was predominantly due to time and
resourcing constraints and internal communications programmes not being
considered a high priority by senior managers.

Most private sector organisations were less concerned with cross cultural
communication.

Virtually none of the organisations were collecting data through impact

measurement, or other means, to fully understand the cultural drivers for their
employees and align these with their internal communications programmes.

“Cross cultural communication is not necessarily something that we

have thought about a whole lot but we probably will be as we now have
an office in Asia and I am aware that what we put out from head office
in New Zealand is not necessarily going to be as effective for our staff
there.”

15
Ideas Shop Ltd

Ideas Shop is a creative Public Relations company working with leading and
emerging brands. We are a next generation professional services firm.

We are also one of the only public relations firms in New Zealand with a specialist
internal communications/ organisational change communications team. Our work
is tried and tested by major New Zealand and overseas organisations.

Ideas Shop knows how to make your communications processes work for you
to deliver on your strategic plan and drive bottom line results. Our team brings a
formidable mix of legal, human resources and communications expertise to ensure
your organisation manages any expansion, review or restructure respectfully and
effectively.

This survey was conducted using our in-house market research support.

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