Good communication boosts the bottom line

2007

Read my lips. Good communication by managers boosts the bottom line and creates a more committed workforce, according to latest research. So why are so many managers still so bad at it?

Research among 264 companies by consultancy Watson Wyatt has identified six communication practices that distinguish the top performers from the also-rans.

Most of these are not new, and not even particularly innovative, yet focusing on basics such as these can make a real difference, it argued.

In fact, companies with the most effective communication programmes reported a massive 47 per cent higher total return to shareholders from 2002 to 2006, compared with companies that communicated less effectively.

Such companies were also four times more likely to report high levels of employee engagement as those that failed to get the message across.

The six communication practices of high-performing companies identified by the research were:

  • focusing managers and employees on customer needs;
  • engaging employees in running the business;
  • helping managers to communicate effectively;
  • leveraging the talents of internal communicators to manage change more effectively;
  • measuring the impact of employee communication; and
  • branding the employee experience

It was also clear employers that treated their workers like grown-ups and involved them in decisions tended to do better than those where the management team cloistered themselves away or communicated from on high.

Fewer than one in five of the firms polled let their employees weigh in on decisions that affected them.

Yet the top financial performers were 10 times more likely to invite employee feedback, it added.

More optimistically, more companies were communicating directly with employees on how their actions affected the customer.

The percentage of companies consistently providing this sort of feedback increased from 21 per cent in 2003 to 39 per cent in 2007, said Watson Wyatt.

The percentage of companies treating managers as a distinct and important audience for advance communication increased 7.5 per cent, with the top financial performers 50 per cent more likely as others to provide such information, it added.

"Top-performing companies treat communication as a key business driver," said Kathryn Yates, global director of communication consulting at Watson Wyatt.

"They use communication to educate managers and engage employees in the business by providing line-of-sight to customers' needs and business goals.

"Furthermore, by gaining insight into what top-performing companies are doing, employers can reorient their communication programs, brand their employee experience and make a difference in their business results," she added.

Effective communication programmes could make a real difference to employer/employee relationships, she continued.

"This is not just a 'feel-good' exercise. Companies that communicate effectively with employees have an engaged workforce and superior financial results," she stressed.