Rosemary Plorin

Internal Communication: Don’t Let What Happened to Enron Happen to You

By Rosemary Plorin

An effective internal communications program is an integral component of any productive organization. Look at any top 10 business list and you are almost guaranteed to find companies with robust internal communications programs and strong corporate cultures.

Look further down those lists and you’ll find companies that fail to implement internal communications programs that fully tap into the benefits of a well-planned system.

Effective communications allow business leaders and company employees to share insights and knowledge in a two-way dialogue. Successful communication strategies encourage collaboration and teamwork, promote a company’s goals, provide education and motivate employees. They help reinforce the “true north” of a company’s strategic plan and provide an important feedback loop from the bottom of the organizational chart to the top.

Internal communications are particularly important during times of change or crisis. It’s imperative that organizations have an efficient, comprehensive and relevant communication program in place before a crisis occurs.

Social Business Meeting
Social Business Meeting

Internal Communications: The Building Block of Success

The Business Dictionary defines internal communication as “The sharing of information within an organization for business purposes.” It sounds simple but it’s not as easy as it sounds. Clear communication between departments, team members, managers, executives and employees is difficult enough when an organization is in one building. Add in factors such as field locations, mobile workforces and telecommuters and communication becomes even more complicated. Fortunately, there are new tools and tactics you can put into place now to connect with everyone, from the traveling sales rep to the off-site call center operator to the CEO.

Plan and strategize. If there is no internal communication plan in place, develop a strategy that meets the goals you want to achieve. If you already have a plan, look at what works and what doesn’t. Conduct an audit to identify how and when employees prefer to receive information and what they need to do their jobs well. Strengthen what’s working, identify barriers, define improvements. Work out a budget. Keep in mind that high employee turnover, low employee morale, misunderstandings and lost revenue are intrinsically connected to a lack of or poor internal communication.

Choose simple tools. Make communication easy. Implement an instant chat system, such as Slack or Yammer. Utilize cloud platforms like Google Drive to bring everyone in the company together, regardless of physical location. Use online project management tools and a single platform for email, documents, files and calendars. Employees won’t use communications tools if they’re complicated, redundant or time-consuming.

Provide a forum for employee feedback.  Provide a forum for team members to share ideas, supply feedback, brainstorm, discuss problems and voice suggestions. Bringing employees, managers and leaders together in a relaxed, comfortable forum, whether it’s a chat channel or cloud-based service, promotes camaraderie and innovation and shows you care about what they think.

Inform and inspire. Electronic newsletters can be an effective form of internal communication. but many organizations miss out on the opportunity to inspire and motivate in their newsletters. A newsletter is the ideal place for sharing motivational quotes or rewarding customer experiences, reminding everyone of the company’s goals and mission and offering praise. If used correctly, an electronic newsletter spurs actions and raises morale.

Measure the effectiveness of internal communications procedures. Determining the success or failure of an internal communication program won’t happen overnight. But, there are early indications to show where your newly implemented program is going. Indicators include changes in profits, sales and productivity, differences in staff retention rates and shifts in employee happiness and job fulfillment answers on surveys. Gauge your program’s effectiveness through regular, annual or biannual, surveys using your audit results as a benchmark.

Adapt. As you analyze the results and communicate with users, adapt your internal communications procedures to fit the needs of the organization and individuals. Be purposeful to ensure your communications tactics stay relevant and useful. But …

Avoid overload.  Information overload is a real threat to effective internal communications. Avoid overloading team members with too much information, too many emails or too frequent newsletters. Make sure your communications tools have clearly defined purposes and editorial calendars.  Resist the urge to layer in too much “feel good” info (work anniversaries, birthdays, recipes) that can water down the tool’s effectiveness. Be brief and to the point and always try to add-value to the employee’s work day.

A Cautionary Tale

A lack of internal communication is a recipe for disaster. The rise and fall of Enron, an American energy company, is a prime example of what can happen when internal communications fail. Clearly, many factors played roles in Enron’s demise, but an academic analysis conducted by Matthew W. Seeger of Wayne State University and Robert R. Ulmer of the University of Arkansas – Little Rock, placed much of the blame on poor internal communications.

According to the abstract, Enron management did not utilize “adequate communication to be informed of organizational operations.” Executives were able to hide the true state of the company’s finances, confuse shareholders and analysts with a convoluted business model and practice unethical accounting methods to misrepresent earnings because no one else in the company knew what they were doing.

We’re seeing a similar scenario play out in the Flint, Michigan, water crisis, in which several high-ranking officials appear to have been unaware of a crisis brewing in the city’s water system for almost two years.  Had the lines of communication been more open, more relevant, more accessible to employees on the local and state level, could the crisis have been averted?

Don’t let a lack of or poor internal communications be your Achilles’ heel. Isn’t it time you reviewed your organization’s internal communications program?

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