Strategic Comms-Part 33: Employee Communication and Increased Shareholder Value

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(This is the 33rd in a continuing series on strategic communications. Click here for earlier segments)

By Owen Eagan, The Saint Consulting Group 

There is a clear link between improving employee communication and increasing shareholder value.  For example, a Watson Wyatt study in 2003 found that companies with the most effective employee communication programs provided a 26 percent total return to shareholders compared to -15 percent for those companies with the least effective programs.  The study also reported that a significant improvement in communication effectiveness could result in a nearly 30 percent increase in market value.

Though we’ve discussed the importance of communication to managerial leadership (see Strategic Communications Part 21: Why Communication is a Core Competence of Managerial Leaders: http://bit.ly/zhlDji), there is also a comprehensive tool that companies can use to assess the communication competencies of their managers.  The Face-to-Face Communication Toolkit developed by Roger D’Aprix consists of tools that communication professionals can use to tailor assessment programs for their individual companies (see http://bit.ly/ibFLY).  One of the central tools is a 39-question survey used to develop best practices across six subject areas including job responsibilities; performance feedback; individual needs; department objectives and results; vision, mission and strategy; and engagement.

While these programs can have a significant impact on employee satisfaction and business results, the challenge for most communication professionals is persuading senior executives to embrace their value.  To that end, another case study has emerged to demonstrate the importance of effective employee communication.  While a senior executive a Textron Financial Corporation (TFC), a division of the Fortune 500 company Textron, Karen Papa designed and implemented a program to build communication competencies for managers based on the D’Aprix model.  After putting more than 300 managers through the program in 2005, the company subsequently achieved record high financial results in 2006 and 2007.  The program was later recognized as a Best Practice by the company and implemented across the Textron enterprise.

It can be difficult to convince companies to adopt new programs, especially when companies are seeking to reduce operating expenses.  However, this program is an investment that will result in significant dividends in the short-term and will have a lasting impact on profitability.

Owen Eagan is a Senior Consultant for Saint Consulting, an international management consulting firm specializing in land use politics.  He is also an adjunct faculty member at Emerson College, the nation’s only four-year institution dedicated exclusively to communications and the performing arts. Email Eagan@tscg.biz

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