Angela D. Sinickas, ABC

1. 1
Using Employee Communication
as a Business Process to Improve
Financial Results
Angela D. Sinickas, ABC
angela@sinicom.com
ISM University:
19 May 2014
Vilnius
22365 El Toro Road, Ste. 139, Lake Forest, CA 92630
TEL: 714/277-4130 FAX: 714/242-7049

2. 2
Evidence Communication
Improves Business Results

3. 3
© 2014, Sinickas Communications, Inc.
Five-year study found link between
internal communication and ROS / ROI
• Prof. Daniel Denison (University of Michigan)
followed 34 companies over five years:
– Attitude survey results
– Return on sales (ROS)
– Return on investment (ROI)
• Companies with higher survey scores on
information-sharing practices did better on ROS
and ROI; the difference grew larger over five years
• High-information companies also rated higher on
ROS and ROI within their industries

4. 4
© 2014, Sinickas Communications, Inc.
HP and GE identified supervisor communication
link with productivity and turnover
• Regression analysis of attitude survey results at Hewlett-
Packard and at General Electric found strong statistical
correlation between communication and bottom-line
cost items based on employee survey results
• Employees who are more satisfied with their supervisor’s
communication interactions are:
– More likely to be as productive as they can be
– Less likely to be looking for a new job

5. 5
At a B2B company, as information
levels on vision/goals improved…
5

6. 6
…customer satisfaction also
improved
© 2014 Sinickas Communications, Inc.
RBIS meets or exceeds my expectations for…

7. 7
Correlation between knowledge of strategy and
profitability in one company’s 13 geographic retail areas
informed on
strategy
74%
informed on
strategy
55%64%
Average
1 4
3
6
7
2
8 9 1011 12
5
13
Also is the most
profitable retail
geographic area
Also are among the
least profitable retail
geographic areas
© 2014, Sinickas Communications, Inc.

8. 8
Towers Watson bi-annual study of employee
communication and financial success
“Companies that are highly effective at
employee communication are 1.7 times
as likely to be high-performing than
companies that are not highly effective
at communication.”
© 2012 Towers Watson. Source: Towers Watson

9. 9
Focusing Communication on
Measurable Behavior Change

10. 10
© 2012 Sinickas Communications, Inc.
Typical communication messaging
• Organizational goals and performance
results
– What leadership is trying to achieve
• Communication tactics
– Key messages about goals and results

11. 11
© 2012 Sinickas Communications, Inc.
More effective communication messaging
based on research…
• Organizational goals and performance results
– What leadership is trying to achieve
• Audience actions
– What should different stakeholders do more of or less of, or do
differently in order to achieve the goals?
• Audience perceptions (knowledge and attitudes)
– What do stakeholders need to know in order to do the right things?
– What do stakeholders need to believe in order to do the right
things?
• Communication tactics
– Key messages about goals and results leading to behaviour
change

12. 12
Timing of communication manager’s
involvement in change processes
© 2012 Towers Watson.

13. 13
Employee information levels are much higher for
companies with full-time internal communicators
40%
31%
27%
35%
22%
28%
14%
27%
22%
59%
47% 46% 45% 43% 41% 40% 40%
36%
0%
10%
20%
30%
40%
50%
60%
70%
Facility/siteplans
HR/Policies
Companyfinancials
HowIcontributeto
co.goals
Customer
satisfaction
Companyplans
Employee
recognition
Localnews
Careerdevelopment
Without Internal Communicator With Internal Communicator
How well informed employees are about:

14. 14
Information levels improve once companies
create a full-time employee communication role
17%
44%37%
63%
25%
45%
48%
33%
0%
10%
20%
30%
40%
50%
60%
70%
2003 2005 2006
Company-wide news How I help meet company goals
Company plans Company financials
How well informed employees are about:

15. 15
Using Research to Maximize the
Impact of Communication
Messages
and
Channels

16. 16
Hierarchy of messages employees need to
hear before they can become enaged
Source: Roger D’Aprix

17. 17
Informal “interviews” to identify possible concerns of
employees relocating to a new production site
TTooppiiccss
HHoouurrllyy
EEmmppllooyyeeeess
MMoovviinngg
OOffffiiccee
EEmmppllooyyeeeess
MMoovviinngg
EEmmppllooyyeeeess
NNoott
MMoovviinngg
TTrraannssppoorrttaattiioonn
WWhhoo mmoovveess
FFoooodd
SShhoowweerrss
LLoocckkeerrss
SSeeccuurriittyy
Legend: = mentioned by 1/4 to 1/2 in this category.
= mentioned by less than 1/4 in this category
= mentioned, but only by a few people
= not mentioned at all

18. 18
© 2014, Sinickas Communications, Inc.
Change
Made?
Suggested Change Negative Outcome if Not Changed

Reverse two parts of e-mail
subject line so impact on current
employees shows up before that
on future employees.
Many current employees would not open the
e-mail since only the first portion would show
up on their in-box screens; they would
automatically delete it since it didn’t seem
relevant.

Mention that there is an option for
current employees in first
paragraph, not just a plan for
future employees.
Current employees would stop reading the e-
mail and delete it since it doesn’t seem to
apply to them.

Refer to the option being a one-
time-only choice more often.
Because the one-time nature was referred to
only once in the e-mail, people might not
have realized the importance of the choice.

Say whether the Webcast will
include additional information
or not (mentioned in two places in
the e-mail).
People would have changed their busy
schedules on short notice and then
discovered that no new details were being
provided. Their productive time would have
been lost.
Focus groups were used to pretest and change
an e-mail announcing a benefit change before
brochures and webcast were available

19. 19
© 2014, Sinickas Communications, Inc.
Surveys can track interest and
information levels on key topics

20. 20
© 2012 Sinickas Communications, Inc.
You can measure an increase in actual
knowledge of correct facts
75%
74%
61%
58%
30%
12%
0% 20% 40% 60% 80% 100%
Increase no. of contracts
Increase no. of customers
Increase revenue by acquisitions
Increase revenue from time-sold
Increase no. of large projects not relying on
time-sold
I'm not sure
 The right answer
How is XYZ going to double the value of the company?

21. 21
Choosing the right channels or
mediums for communication
• Match channel to audience: Employees
prefer different sources on different topics
of information; preference varies by type
of employee as well.
• Match channel to message: Different
channels are more suitable for different
types of messages. Messages may need
to be rewritten for different channels.
Source: Wiseman and Schenk-Hamlin

22. 22
What types of channels employees
generally want more or less of
46%
13%
19%
29%
15%
52%
59%
62%
67%
75%
3%
28%
18%
5%
11%
0% 20% 40% 60% 80% 100%
Face-to-face
with senior
leaders
Mass e-mail
Print
Face-to-face
with
supervisor
Intranet
Far/Slightly too Little Just Right Slightly/Far too Much
The amount of information I receive from each of these methods is…

23. 23
Example: Sources for
“How I can help XYZ reach its goals”
10%
23%
25%
29%
45%
14%
23%
25%
27%
40%
0% 10% 20% 30% 40% 50%
Large meetings
Dept/site manager
Leadership
Staff meetings
My manager
Current Sources Preferred Sources
Source: One Sinickas Client

24. 24
Example: Sources for
“Our competitors & how we compare”
4%
6%
6%
7%
12%
13%
13%
15%
17%
33%
16%
16%
11%
22%
7%
9%
7%
13%
10%
24%
0% 10% 20% 30% 40% 50%
Other employees
No source
Customers
External press
Local newsletters
E-mails
Leadership
Large meetings
Company Intranet
Company newsletter
Current Sources Preferred Sources
Source: One Sinickas Client

25. 25
Match channels to messages
Complex or sensitive topics should use richer mediums
• Posters
• Bulk mail
• Magazines
• Websites
• Letters
• Email
• Blogs
• TV
• YouTube
• Webcast
Written Audio Video
2-way1-way
• Telephone
• Discussion
boards
• Video
conference
• Face-to-face
• Radio
• Podcast
• Voicemail
• Text msg
(SMS)
Leaner
mediums
Richer
mediums
Effectiveness of
communication
Source: Adam Clark

26. 26
Consider the impact of “push” vs.
“pull” channels on outcomes
Channels where
information is
pushed
to people:
• Newsletters
• E-mail
• Digital signage
• Team meeting
• In-person all-hands
meeting
Channels where
employees choose
if/when to pull
information:
• Intranet
• Subscriptions to
newsletters or podcasts
• Social media
• Webcast of all-hands
meeting
© 2014 Sinickas Communications, Inc.

27. 27
We use intranets a lot, but they are not good at
getting information to all employees quickly
45%
17%
35%
3%
Part of my routine
When email/link alerts me to something new
Only when I need specific information
Other
Reasons for
searching
intranet
41%
27%
13%
10%
12%
Daily Weekly
Monthly Less than monthly
Never
Frequency of
searching
intranet
© 2014 Sinickas Communications, Inc.

28. 28
How effective is the face-to-face
communication “cascade”?

29. 29
© 2014, Sinickas Communications, Inc.
Three organizations where understanding of strategy is
much higher than the norm—question is why?

30. 30
© 2014, Sinickas Communications, Inc.
Face-to-face communication is not a consistent predictor
of higher scores on understanding strategy

31. 31
© 2007, Sinickas Communications, Inc.
However, a lack of face-to-face communication might be
a predictor of lower scores on understanding strategy
48% 48% 53% 38% 43%
15%
20%
25%
30%
35%
40%
45%
50%
55%
60%
Supervisor
explains company
strategy
Supervisor
explains how I
can help
contribute to
strategy
Senior
management
explains company
strategy
Well/very well
informed on
company strategy
Well/very well
informed on how I
can contribute to
strategy
Database Norm Org. X Org. Y Org. Z

32. 32
71%
59%
64%
54%
46%
41%
69%
50%
36%
30% 29% 27%
0%
20%
40%
60%
80%
Sr. Execs Sr.
Managers
Managers Senior
Profess-
ionals
Other
Profess-
ionals
Assistant
XYZ 2005 XYZ 2007
Segmenting audiences can show how
cascade drops by job level
% informed about company financial results
During 2-year
period, client
tried to use
management
“cascade” to
communicate
this topic, with
a very bad
result
Rumors begin as soon as the first
cascading meeting occurs

33. 33
To limit the negative impact of bad
face-to-face communication, use face-
to-face for strategy communication to
provide context after information has
been broadcast through consistent
print/electronic channels…
…Preferably very
frequent ones

34. 34
© 2014, Sinickas Communications, Inc.
Two organizations relying on team briefing
cascades, no publications available
81%
63%
42%
32%
23%
18%
0%
10%
20%
30%
40%
50%
60%
70%
80%
90%
100%
Directors Managers Production
Company A Company B
% informed about company plans

35. 35
© 2014, Sinickas Communications, Inc.
Impact of having timely newsletters vs. relying
on cascade for timely information: less loss in
information levels by job
55%
47%
42%
34%
59%
40%
31%
22%
0%
10%
20%
30%
40%
50%
60%
70%
Directors Managers Professionals Production
Organizations with daily newsletters All other organizations
% informed about company plans

36. 36
Print or online newsletters? Readership of one
monthly employee magazine went down 20 percentage
points when it changed from print to only online
• Only 48% read or skim at
least half of each issue, which
is improved over 2009’s 42%,
but still down 3 points from
last year and down 20 points
from 2007 when it was last
printed (when 68% read all or
most of it).
– This current level is 11
percentage points under the
database norm of 59%.
12%
28% 26%
17%
23% 25%
20%
31% 32%
29%
26% 27%
30%
25% 25%
29% 28% 27%
38%
17% 17%
25% 23% 21%
0%
25%
50%
75%
100%
2007
Printed
2009
Online
2010
Online
2011
Online
2012
Online
2013
Online
Read beginning to end
Read/skim about half
Read only what interests me
Don't read it
How much of an issue is read
© 2014 Sinickas Communications, Inc.

37. 37
More employees say they do not have access to
the online magazine than when it was printed
© 2014 Sinickas Communications, Inc.

38. 38
Usefulness of magazine dropped 11 percentage
points when it went only online
© 2014 Sinickas Communications, Inc.

39. 39
Measuring Outcomes and ROI

40. 40
© 2007, Sinickas Communications, Inc.
How reading the employee
publication affects employees’ jobs
• The green bars show
how many
respondents agreed
or strongly agreed
with each statement
about the publication
• Over half said the
publication has
helped them do their
jobs better, with 80%
saying it has helped
them talk with
customers and other
outsiders more
knowledgeably
• Numbers were even
stronger for sales
employees

41. 41
© 2012 Sinickas Communications, Inc.
On surveys, ask questions not just
about satisfaction, but outcomes
The new Portal has helped me:

42. 42
© 2012 Sinickas Communications, Inc.
How much time the new Portal saves
• For the employees
who said it helps them
save time, ask them
how much time is
saved

43. 43
© 2012 Sinickas Communications, Inc.
Productivity savings due to portal for
about 10,000 employees
58% (5,800) x average of 7.5 minutes
29% (2,900) x average of 22.5 minutes
9% (900) x average of 45 minutes
4% (400) x average of 60 minutes
725 hrs/wk
1,088 hrs/wk
675 hrs/wk
+ 400 hrs/wk
Total hours saved per week 2,888 hrs/wk
X 49 wks worked
Hours of productivity saved each year
Convert hours to weeks
Average salary per week
141,512 hrs/yr
3,538 weeks/yr
X $1,500 pay/wk
Total productivity savings from portal $5,306,700

44. 44
© 2013 Sinickas Communications, Inc.
Calculating ROI if the total cost of
replacing the intranet was $500,000
Benefit/cost ratio
$5.3 million ÷ $.5 million
=
10.6
Return on investment (ROI)
($5.3 million – $.5 million)
÷
$.5 million
= 9.6 X 100%
= 960% ROI

45. 45
© 2013, Sinickas Communications, Inc.
ROI is the financial value of changed audience
behaviors vs. cost of communication
Gain – Cost
___________
Cost

46. 46
© 2012 Sinickas Communications, Inc.
Ways to isolate communication’s
impact on behavior change for ROI
• Survey question
• Timing
• Pilot/control groups
• Different URLs, phone numbers, addresses in different
communications that lead to action steps with a financial
impact

47. 47
© 2013, Sinickas Communications, Inc.
ROI Ex. 1: Communication impact on
long-distance dialing costs
• Situation: Employees were dialing
long-distance calls directly instead of
using a string of pre-dialing
numbers that reduced the cost
• Solution: Humorous internal
communications campaign over
three-month period using e-mails
and the intranet; repeated every
few months to alert new hires and
remind back-sliders
• Outcome: Company long-distance costs reduced over
$20,000 per month with the same call volume

48. 48
© 2013, Sinickas Communications, Inc.
ROI Ex. 1: Calculating communication
ROI on long-distance cost savings
• Annual long-distance savings
(12 x $20,000) $240,000
• Annual salary and benefits for
one communicator - $ 86,000
• Net annual cost saving $154,000
• Cost of comm. salary/benefits ÷ $ 86,000
• Annual ROI = 179%

49. 49
© 2013, Sinickas Communications, Inc.
Example 2: Reducing insurance
costs at Westec Security
• Situation: Most employees
drove vehicles; insurance
costs due to accidents
were skyrocketing
• Solution: Communicator
piloted a new safety
communications in
3 of their 7 branches
• Outcome: Company
insurance premium
reduced by $1 million per
year at the three pilot
branches; no change at
other 4 branches

50. 50
© 2013, Sinickas Communications, Inc.
Example 2: Calculating communication’s
ROI at Westec
• Annual insurance cost savings $1.00 million
• Annual salary of communicator -$ .06 million
• Annual cost saving $ .94 million
• Annual salary of communicator ÷ $ .06 million
• Annual ROI = 1566%
If ROI seems too high to be believable,
add more costs to the equation

51. 51
Conclusion
• Carefully identify your stakeholders
• Focus communication on desired behaviors
• Use research to identify communication needs
and to pretest proposed communication
• Evaluate success afterward to improve next
time
© 2014 Sinickas Communications, Inc.

52. 52
© 2013, Sinickas Communications, Inc.
Free monthly
newsletter
with practical
measuremen
t tips
available by
emailing
angela@
sinicom.com