Towers Watson 2011 – 2012 Change and Communication ROI Study

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The 2011 – 2012 Change and Communication ROI Study Report sheds new light on the pivotal role that effective change and communication processes play in global organizations today. This year's findings reveal that the way companies handle employee communication is fundamentally changing, largely due to increased expectations, diversity and globalization, as well as the growth of social media and networking.

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Towers Watson 2011 – 2012 Change and Communication ROI Study

  1. 1. Clear Direction in a Complex World How Top Companies Create Clarity, Confidence and Community to Build Sustainable Performance2011 – 2012Change and Communication ROI Study Report
  2. 2. Clear Direction in a Complex WorldHow Top Companies Create Clarity, Confidence andCommunity to Build Sustainable Performance Table of Contents Executive Summary 2 Key Findings 3 Introduction 4 Defining Communication and Change Effectiveness 5 Assessing Effectiveness and Performance 6 Clarity 8 Confidence 14 Community 20 Conclusion 27 2011 – 2012 Change and Communication ROI Study Report 1
  3. 3. At a Glance What drives ROI? Confirmed: Our fifth survey finds a strong relationship between superior financial performance and effective communication and change management — in any industry, region or economy. Effective communication and effective change management make a difference. Organizations that are highly effective in both their communication and change management practices are more than twice as likely to significantly outperform their peers as organizations that are not highly effective in either of these areas. Creating a clear direction in a complex world requires conveying a consistent story about the business, creating greater certainty, confidence and engagement with employees, and building a shared experience across diverse audiences. Executive Summary In a challenging and dynamic business world, Confidence: Supporting development of leaders and success depends on establishing a clear path to managers to better deliver confidence, and using navigate through complexity. Organizations and their a disciplined process to ensure effective use of leaders — wherever they are around the world and change and communication resources whatever business environment they face — must Community: Building a shared experience, a sense be able to chart the right course and deliver results. that employees and leaders are in it together — Organizations that are doing this best have leaders, sharing both the challenges and rewards of working managers, communication and change practices that create: This report describes what the companies that communicate and manage change effectively are Clarity: Conveying to employees the direction of the doing, and how practices compare globally. Read business along with ways they can contribute to the on to find the steps you can take to create a clear enterprise direction for your organization.2 towerswatson.com
  4. 4. Key FindingsOur 2011 – 2012 Change and Communication that find social media cost effective are mostROI Study sheds new light on the pivotal role likely to be investing in social networks (63%)that effective change and communication and leadership journals or blogs (58%) to supportprocesses play in global organizations today. collaboration, share new ideas and cultivateHere are the lessons learned: community or team building.• An employee value proposition (EVP) • Managers and leaders are more important positions a company’s employment deal than ever in delivering effective communication as unique and helps bind employees to and change management. Nearly two-thirds an organization. Among companies with of our participants report that managers are high communication effectiveness, roughly taking on more responsibility when it comes to two-thirds (62%) have a clearly articulated communication with employees, but only 28% EVP. While companies highly effective at are evaluating managers on their communication communicating are nine times as likely effectiveness. This gap is a global issue and has to have managers who are effective at been consistent across all five of our studies. promoting the EVP to employees (36% • Many companies are training managers to compared to 4%), there remains much communicate and manage change effectively, room for improvement. but very few find it effective. Given the increasing• When compared to companies with low complexity and diversity of organizations, it is change and communication effectiveness, eye-opening that only 35% of firms that train firms that are highly effective at change managers how to listen to different points of management are nearly five times as likely view actually find the training effective. to create an integrated communication and • Organizations that manage change effectively change management strategy — and more are more likely to have a formal, systematic than eight times as likely to continue to process and a dedicated staff that includes the exhibit new behaviors and use new skills internal communication function. They typically after changes are made. involve internal communicators earlier in the• Building a shared experience is another decision-making process — while the company hallmark of highly effective organizations. is identifying a challenge or opportunity and Companies that are highly effective at considering possible approaches to address the change management use various media required change. and their managers to create the sense that employees and leaders are “in it together,” and are about seven times as likely to create a sense of ownership among employees as part of a change initiative Effectiveness and the bottom line and to build the critical mass of support As revealed in our prior studies, effective communication and financial necessary to be successful. performance are strongly related: Companies that are highly effective• While roughly two-thirds (64%) of respondents at communication are 1.7 times as likely to outperform their peers. are more knowledgeable about using social Our research confirms that effective communication is an important media tools than they were a year ago — element of change management, and if both are done well, there and 69% plan to increase their use over is a stronger relation with financial performance. Companies highly the next 12 months — few know for sure effective at both communication and change management are 2.5 whether they’re working well. Only 28% of times as likely to outperform their peers as companies that are not all participants report these tools are cost highly effective in either area. effective, and only 15% have measurement tools in place for social media. The firms 2011 – 2012 Change and Communication ROI Study Report 3
  5. 5. Introduction For years, our ROI study has found a strong The best internal change managers and relationship between effective communication communicators guide their organizations by helping practices and better financial performance. In this, to create: our fifth study, we have expanded our inquiry to • Clarity: Delivering messages about business include change management. Our latest research direction and performance, as well as all aspects finds that organizations that are highly effective at of the employment deal both are more than twice as likely to outperform • Confidence: Engaging leadership at all levels their peers than organizations not highly effective and following a disciplined process for changing at either. and communicating to create greater certainty, How do the best do it? If you think of the current confidence and engagement among employees business environment as a white-water river, internal • Community: Building a shared experience across change managers and communicators often serve diverse audiences, geographies and business as guides for their organization. The best guides units, and making greater use of new media tools match their knowledge and experience on the river The best change and communication guides position with the abilities and needs of the crew. They help their companies to keep employees engaged in direct the passage through the rocks and anticipate the business, retain key talent, provide consistent the course corrections that may be needed if the value to customers and deliver superior financial unexpected occurs. In the process, they create performance to shareholders. clarity, build confidence and help establish a shared purpose.4 towerswatson.com
  6. 6. Defining Communication and Change EffectivenessHighly effective firms represent the top third of study Figure 1. Seven practices for effective communicationparticipants, with the highest overall communication Defining effective communicationeffectiveness or change effectiveness scores How effective is your organization at each of the following areas?based on their responses to the survey items that 0% 20% 40% 60%measure these areas. Less effective firms represent Helping employees understand the businessthe bottom third of participants, with the lowest 58overall effectiveness. We then look at the financial Providing information on organizational performance and nancial objectives to employeesperformance of the companies in the highly effective 57group to measure the relationship between financial Educating employees about organizational culture and valuesperformance and effectiveness. 56The following characteristics of effective Integrating new employees into the organizationcommunication and effective change management 49were developed by talking with our clients, reviewing Communicating to employees how their actions affect the customeravailable academic and other external research, and 45looking at our own experience and research. Providing individuals with information about the true value of their total compensation package 42Measuring Communication Asking for rapid feedback from employees about their opinions on the companyEffectiveness 32We measure communication effectiveness using Overallthe seven practices in Figure 1. The organizations Note: Percentages include respondents indicating “effective” or “highly effective” in these areas.in the top third of the scores for this measureare designated “highly effective communicating Figure 2. Five practices for effective change managementcompanies.” Although there has been progress, Defining effective change managementthere is still a lot of opportunity for improvement in How effective is your organization at each of the following areas?these fundamentals. 0% 20% 40% 60%Measuring Change Management Achieving the desired operational goals from change initiativesEffectiveness 43 Improving organizational nancial performance through change initiativesWe measure change management effectiveness 43using the five practices in Figure 2. Theorganizations in the top third of the scores for this Identifying the changes that are necessary to be successfulmeasure are designated “highly effective change 43management companies.” Changing at the right pace 35Comparing High-Effectiveness and Sustaining positive impact from changes for at least ve yearsLow-Effectiveness Companies 31Most questions in this survey used a five-point Likert Overallor effectiveness scale. Where we compare high Note: Percentages include respondents indicating “effective” or “highly effective” in these areas.and low effectiveness, we are showing how many ofthe organizations designated as having high or lowchange or communication effectiveness respondedto the item with a four, a five (agree/strongly agreeor effective/highly effective) or a yes. 2011 – 2012 Change and Communication ROI Study Report 5
  7. 7. Assessing Effectiveness and Performance Since some of our participants are not publicly • Organizations that report performing about the traded and do not have mandatory financial same as or slightly above their peer group are disclosures or share prices, we asked participants considered average performers. to rate how their organization performed financially • Organizations that report performing slightly or compared to other companies in their industry over substantially below their peer group are considered the past year. Where possible, we gathered financial below-average performers. information and confirmed that the companies that Using this information, we confirmed the strong link rated themselves as high performers had higher total between change and communication effectiveness return to shareholders, market premium and revenue and higher financial performance: per employee than other respondents. • Companies that are highly effective at In order to conduct our analysis, we divided the communication are 1.7 times as likely to be high participants into three groups based on their self- performing than companies that are not highly reported financial performance relative to their effective at communication. peers’. The three groups are defined as follows: • Companies that are highly effective at both • Organizations that report performing substantially communication and change management are above their peer group are considered high- 2.5 times as likely to be high performing than performing organizations. companies that are not highly effective at either. Lessons learned In a recent article in Strategy@Work, Towers • Define and measure success. Set target Watson’s online magazine, Capital One Bank’s metrics for employee retention, engagement leaders offer the following advice for companies and customer satisfaction, and be honest that need to prepare employees for significant about whether they’re met so course change: corrections can be made where needed. • Use a data-driven approach that aligns with • Help managers become change leaders. business results. Undertake an inventory of Managers are the ones employees actually look change requirements to better understand to for leadership, so give them the knowledge both the magnitude of impending change and and tools they need to lead the change. the impact of individual changes on different To read the entire article, visit employee groups and their businesses. towerswatson.com/lessonslearned. • Avoid traditional siloed thinking. Major change often has a cross-function, cumulative impact on employees that needs to be managed. • Listen for results and concerns. Tell people what’s going to happen and what it means for them. Set up feedback mechanisms for two-way dialogue. Act quickly with real solutions, not inspirational platitudes.6 towerswatson.com
  8. 8. in the decision-making process? 0% 20% 40% 60% 80% Identifying the problem or opportunity 14 22 9 Identifying possible approaches to address the issue 26 29 Change management matters 20 Selecting the approach to address the issue 10 No matter how big the change you have ahead, systematic process and a dedicated staff that 11 effective change management processes, 6 includes the internal communication function including communication, can have a (Figure 3). These companies also involve their Planning the implementation significantly positive impact on your overall communication function earlier in the decision- 20 chances for success. Our data show that 18 making process (Figure 4). 22 the organizations with the best change Implementing the change likely to have a formal, management are more 17 13 21 Only if a 3. Effective companies include communication in their change Figure problem arises management process 6 To what extent do you agree with each of the following statements? 2 0% 10 20% 40% 60% 80% Not applicable The internal communication function is part of the change management staff 7 5 43 13 62 26 My organizationHigh change effectiveness Overall Low change effectiveness follows a systematic change management process 33 65 14 My organization has a dedicated change management staff 26 45 16 Overall High change effectiveness Low change effectiveness Figure 4. Effective companies involve the communication function early in the change process At what phase does the internal communication function first become involved in the decision-making process? 30% 29 25% 264 22 22 20% 28 21 20 20 68 18 2015% 17 14 13 13 10% 11 20 10 10 9 40 31 35 7 5% 6 6 5 0% 2 Identifying the Identifying Selecting Planning Implementing Only if a Not problem or possible the approach the the change problem arises applicable opportunity approaches to address implementation to address the issue the issue 5 Overall High change effectiveness Low change effectiveness 2 2011 – 2012 Change and Communication ROI Study Report 7
  9. 9. Clarity Conveying the direction of the business and a clear path for employees to contribute Highly effective firms are clear about their future with direction and steps to follow. Managers and leaders their employees, even when markets or strategies can play a significant role in helping to create clarity are in flux. Whether it’s about the business or the for employees. employee experience, there needs to be a sense of8 towerswatson.com
  10. 10. Talk About Where the Business Is Figure 5. Effective organizations help employees understand the businessHeaded How effective is your organization at the following? 80%Since our first study, we’ve defined effectivecommunication, in part, as helping employees 69 67understand the business and providing information 60% 64 58 59 57 57about organizational performance. Today, we see 54 54 54just over half of all participants are effective atthese fundamental practices: 40%• 58% of all respondents report they are effective at helping employees understand the business. 20%• 57% are effective at providing information on organizational performance. 0% Helping employees Providing information onInterestingly, there’s very little variation across understand the business organizational performance andregions on these items, though the figures are nancial objectives to employeesslightly higher in North America (Figure 5). Overall Asia Paci c Canada Europe and Middle East U.S.Be Clear About What the ChangeMeans Figure 6. Highly effective companies communicate change clearly How effective is your organization at the following?During change, organizations with highly effective 0% 20% 40% 60% 80% 100%change management provide clarity for employeesabout the rationale for change and what the Communicating the business rationale for changechange will mean for them. Employees look to 55the company to put organizational and benefit 87changes into perspective and to tell them what they 28need to do differently to succeed. Highly effective Communicating what the change means to individual employeescommunicators say more, not less (Figure 6). 41 68 13 Clearly articulating what employees need to do differently to be successful 39 01 01 01 66 01 01 12 Overall High change effectiveness Low change effectiveness 9 20 25 21 15 11 16 12 9 56 45 40 62 52 45 2011 – 2012 Change and Communication ROI Study Report 9
  11. 11. Articulate a Compelling EVP The best EVPs are versatile and can be customized for critical talent, top performers or high-potential Highly effective organizations clearly articulate employees. Our data show that only 36% of study their EVP as part of a well-thought-out strategy to respondents are developing customized EVPs. As attract, retain and engage top talent. Organizations the battle for top talent continues, we may see more that convey a clear message about the employee organizations pursuing this tactic in the future. deal — including the total rewards program — find employees understand how things work, appreciate Companies with effective communication are nine the value delivered and take action when required. times as likely as those with low-effectiveness scores to report that managers are effective at Organizations in the Asia Pacific region are more promoting the EVP to employees (36% compared to likely to report having a clearly defined EVP 4%). Even so, relatively few organizations are getting compared to other areas. Given the tight labor this right. Managers need to not only understand market in Asia, organizations there have an the EVP but also internalize the meaning in order especially compelling incentive to articulate the to speak about it clearly and highlight what is most reasons why an employee should be part of their valued. Among companies that are highly effective firm. Other recent Towers Watson research indicates communicators and train on this topic, 42% find it that other geographies with tight labor markets, such effective. So the best are not only better at defining as Brazil, are also more likely to report that they the EVP, they’re also better at embedding it with have a clearly defined EVP. their people. Figure 7 describes other ways in which highly effective organizations express their EVP.Figure 7. Highly effective organizations clearly articulate their EVPMy organization:0% 20% 40% 60% 80% 100% Employee valueHas a clearly de ned EVP proposition 45 53 The term employee value proposition, 39 37 or EVP, refers to what the employer 38 promises an employee can expect and what the employer expects in return fromHas a single, organization-wide EVP for everyone the employee. Also referred to as the 29 37 employee deal, the EVP includes pay, 25 benefits (including perquisites), the work 24 environment and career opportunities. 19 The best organizations align the employeeHas developed customized EVPs for different employee groups experience with the internal brand as well 36 as with the business and the external 35 consumer experience. While an EVP can 41 be aspirational, it must also be grounded 48 24 in reality — the promise of the EVP must be credible and conform to the employee’sHas a reputation among potential job applicants for having a good EVP experience with the company’s people, 42 policies and programs. 42 48 37 44 Overall Asia Paci c Canada Europe and Middle East U.S.10 towerswatson.com 01 01 01 01 01
  12. 12. Managers Play an Important Role in Figure 8. Trusted managers inform, encourage and explainGiving Clarity to Employees Managers at my organization: 0% 20% 40% 60% 80% 100%Because managers in part deliver the promisesmade in the EVP, they play a key role in building trust Keep employees informed about organizational changes that affect their workand engagement in the organization. Highly effective 70companies are much more likely to have managers 91 44who clarify the organization’s vision and valuesthrough their words and actions. They are on the Are a trusted source of information about what is going on in the organizationfront lines when it comes to introducing new ideas 65 90and approaches to work, as well as in providing 37context and guidance regarding pay, performance Encourage new ideas and new ways of doing thingsand career growth. Yet, even with all the changes 51organizations have gone through over the past two 69years, fewer than half of all organizations report 35their managers are good at explaining the reasons Are good at explaining the reasons for changes that happen in the organizationfor change to employees (Figure 8). 40Half of the study respondents that have high 60 20communication effectiveness scores report their 25managers are good at helping employees with Overall High communication effectiveness Low communication effectivenesscareer planning and decisions, while more thanthree-quarters (77%) are good at helping set Figure 9. Managers are better at discussing short-term job performanceperformance goals and providing feedback. Even than long-term career growthat highly effective firms, managers are doing much Managers at my organizaton are effective at:better at talking with employees about short-term 0% 20% 40% 60% 80% 100%job performance than they are when it comes tolong-term career growth (Figure 9). A failure to be Supporting the organizations vision and values through their actionsclear with employees about long-term opportunities 51 81could have a significant impact on retention. Recent 24Towers Watson global research revealed that greatercareer advancement opportunity is often a key Helping employees set appropriate goals for their performance 56driver of employee retention, particularly among 50 45 77top performers, high potentials and employees with 20 40critical skills. Providing feedback to employees about their job performance 62 50 52 77 45 23 Enthusiastically implementing new approaches to work 40 65 16 Helping employees with career planning and decisions 28 50 7 Promoting the EVP 19 36 4 Overall High communication effectiveness Low communication effectiveness 2011 – 2012 Change and Communication ROI Study Report 11
  13. 13. Training for managers Firms that are highly effective at communicating are more likely to have managers who are skilled at delivering clear messages to employees. Effective organizations aren’t just conducting training — lots of organizations accomplish that. The best conduct effective training. They’re better at focusing the training on the critical outcomes and behaviors that fit their organization, people and objectives, and they do more to measure the results. How effective is the training your organization Overall High communication Low communication provides for managers in the following areas? response effectiveness effectiveness Supporting the organization’s vision and values through their actions Percentage that train 82% 91% 69% Percentage of those that train that are effective 43% 65% 19% Enthusiastically implementing new approaches to work Percentage that train 79% 85% 68% Percentage of those that train that are effective 33% 52% 13% Helping employees with career planning and decisions Percentage that train 83% 90% 72% Percentage of those that train that are effective 28% 45% 9% Helping employees set appropriate goals for their performance Percentage that train 91% 97% 81% Percentage of those that train that are effective 42% 62% 14% Providing feedback to employees about their job performance Percentage that train 91% 95% 84% Percentage of those that train that are effective 44% 66% 13% Promoting the EVP Percentage that train 65% 77% 49% Percentage of those that train that are effective 25% 42% 5%12 towerswatson.com
  14. 14. Using the right vehicle for the messageA mark of effectively communicating organizations is taking the time to choose the right vehicles for themessage and the audience. Most firms continue to rely on one-way electronic media such as e-mail orintranet pages. Effective communicators use a mix of media — including interactive electronic mediasuch as online social networking — to better reach increasingly diverse and selective audiences. Biggest differences from low- Topic Most prevalent vehicle effectiveness companies Business issues • Face-to-face discussions or • 2.4 times as likely to be using webcasts with senior leaders (70%) interactive electronic media • One-way electronic media (71%) Organizational • One-way electronic media (65%) • 2.5 times as likely to be using performance and • Face-to-face discussions or interactive electronic media financial objectives webcasts with senior leaders (63%) Organizational culture • One-way electronic media (67%) • 2.4 times as likely to be using and values interactive electronic media • 2 times as likely to be using discussions with managers Customer experience • One-way electronic media (54%) • 3.4 times as likely to be using interactive electronic media Career development • Face-to-face discussions or • 2.7 times as likely to be using webcasts with managers (62%) interactive electronic media • 2.0 times as likely to be using discussions with senior leaders Health and welfare • One-way electronic media (77%) • 2.7 times as likely to be using benefits and wellness interactive electronic media initiatives • 2.3 times as likely to be using discussions with senior leaders • 2.1 times as likely to be using discussions with managers Retirement programs • One-way electronic media (53%) • 6.3 times as likely to be using and planning interactive electronic media • 3.2 times as likely to be using discussions with senior leaders Value of the total • One-way electronic media (40%) • 4.1 times as likely to be using compensation • Printed materials (39%) interactive electronic media package • Face-to-face discussions or • 2.7 times as likely to be using webcasts with managers (32%) discussions with senior leaders • 2.2 times as likely to be using discussions with managers 2011 – 2012 Change and Communication ROI Study Report 13
  15. 15. Confidence Engaging leadership at all levels and following a disciplined process for changing and communicating to create greater certainty, confidence and engagement among employees The most effective practitioners of change and following it, measuring results and making course communication create confidence. As the world corrections. They engage stakeholders in the grows more complex, demands more fast paced and process, especially managers and leaders. By taking media more varied, the basis for confidence building these fundamental steps, they reduce the level of is fundamental, even old-fashioned. The best uncertainty, indicating that someone has a firm hand organizations build a plan, and they’re disciplined in on the wheel — and that breeds confidence.14 towerswatson.com
  16. 16. Lead With Confidence • What do your critical employees need to think, say or do differently to make change successful? DoLeaders are essential in increasing employees’ you have the tools to drive those changes?confidence in their organization. Authenticity, • Are managers and leaders only talking change,accessibility and transparency are all more common or are they getting ready to walk the talk (i.e., beamong highly effective firms (Figure 10). If leaders visible champions and frontline advocates withdon’t have the courage to talk openly about what employees)?employees care most about, how can they expectemployees to have confidence in leadership — or The best do the hard work of understanding who isthe organization? critical to a successful change, and how roles need to change during a specific period of time. They lookOur data show that course-setting activities — at change impact by role, and determine how to bestcreating a vision, building motivation among support talent and mitigate risk. Their plans andemployees and confirming executive sponsorship actions then build awareness and understanding,— are much more common among organizations align training and system changes, and motivatewith effective change management (Figure 11). If action with each of the key stakeholders.they are carefully managed early on in the changeprocess, these are among the activities that have Figure 10. Effective leaders are authentic, accessible and transparentthe most influence on the success of a change Leaders at my organization are:initiative. 0% 20% 40% 60% 80% 100%Assess the Current State Authentic in delivery of messages 49Effective firms not only plan ahead, they work to 72understand what’s going on now. They take the time 24to assess the current state of their communication Accessible and responsive to employee ideas or questionspractice, their organization and their people, so they 49have a better sense of how to target messages and 71 28use their resources well. Transparent in messages to employeesConducting a thorough audit of current 42communication effectiveness helps evaluate 66your current program, what’s working, and where 19a little more energy and attention is needed. Creating a dialogue with employeesCompared to companies with low communication 41effectiveness, organizations that are highly effective 63at communication are four times as likely to conduct 21audits of their communication practices to evaluateactual outcomes against stated goals — still, only Overall High communication effectiveness Low communication effectiveness38% of them are doing so (Figure 12, page 16). Wesuspect a higher use of auditing and benchmarking Figure 11. Effective organizations develop a clear vision of change andwould help more companies move their programs motivate employeestoward greater effectiveness. How effective is your organization at the following? 0% 20% 40% 60% 80% 100%A look at the environment and the audience iscritically important at the start of a change initiative. Developing a clear vision of desired organizational changeCompanies that are highly effective at change 48management assess culture and people as part 84of change planning, and use the findings as a 19framework for interpreting, prioritizing and acting on Creating strong employee motivation for making organizational changechange initiatives. 32 67Key questions during this exercise might include: 9• Will your culture support or impede the change Overall High change effectiveness Low change effectiveness you want to see?• Will the change also reshape the culture, and do you want this to happen? 2011 – 2012 Change and Communication ROI Study Report 15
  17. 17. Figure 12. Effective companies assess the current state of their Create a Plan and Set Your Directioncommunication programsHow effective is your organization at the following? Whether it’s for internal communication or a change initiative, highly effective organizations create a plan0% 10% 20% 30% 40% 50% before they move forward. Overall, we see that less than half (47%) of all participants report having aUnderstanding the potential impact of anticipated changes on people corporate communication strategy in place 38 (Figure 13).Assessing organizational culture and readiness for change 35 Overall “Whether it’s for internalHow effective is your organization at each of the following areas? communication or a change0% 10% 20% 30% 40% 50% initiative, highly effectiveAudit of communication practices to evaluate consistency in messaging organizations create a plan 25 37 before they move forward.” 13Audit of communication practices to evaluate actual outcomes against stated goals The numbers drop further when looking at those 23 organizations that create an integrated change and 38 communication strategy ahead of a change initiative. 9 Roughly three-quarters (72%) of organizations Overall High communication effectiveness Low communication effectiveness highly effective at change management take this important first step, versus only 15% of companies with low effectiveness. When misalignment betweenFigure 13. Effective organizations create an integrated change and communication and change management occurs,communication strategy people can be left wondering why the change isTo what extent do you agree with each of the following statements about your organization? taking place and feeling frustrated about repeated80% requests for actions they don’t understand.60% 60 51 49 49 4740% 44 40 37 34 3220% 0% My organization has a My organization is effective documented corporate at creating an integrated communication strategy communication and change in place management strategy Overall Asia Paci c Canada Europe and Middle East U.S. 8th option16 towerswatson.com 01 01 01 01 01 01 01 01
  18. 18. Measure Progress Along the Way Figure 14. Effective companies measure and benchmark their communication initiativesMeasurement is a critical tool to determine To what extent do you agree with each of the following statements?direction, refine efforts along the way and assess 0% 20% 40% 60% 80%whether you’ve reached your goal. In addition,rigorous measurement helps build the business The organization uses measurement ndings in planning futurecase required to gain additional resources or communication initiatives and/or business decisionsinitiatives, and provides the data to confirm that you 42 62are using resources wisely. 24This year’s study found that 60% of participating The organization measures the communication function’s contributioncompanies are using the same number of metrics to meeting strategic business goalsas last year. Only about four in 10 use measurement 40findings in planning future communication initiatives 56 22and making business decisions, and even fewer 2benchmark their work against that of other The organization benchmarks the performance of the communicationorganizations. Companies with highly effective function against other companies 24communication are three times as likely as low- 36effectiveness companies to take this important 13 25step (Figure 14). Overall High communication effectiveness Low communication effectivenessEqually important as evaluating progress is sharingthat information with the rest of the organization.Surprisingly, many organizations have no formal Figure 15. Effective organizations report outcomes to leadership How do you report the outcome of your communication measurement?process for reporting the outcomes of theircommunication measurement (Figure 15). Firms 0% 20% 40% 60% 80%with highly effective communication are more likely Annual presentation to senior leadersto have a formal process, but there is plenty of room 84 25for improvement. 33 18These findings suggest a lack of confidence. Whydon’t more organizations measure? It’s a question 4 Quarterly status reports 28 23the communication profession has explored for 68 30years, and the progress in practical terms is 20 16disappointing. As communicators, we need to do Summary reports by projecta much better job of measuring our contribution to 20 40 37the business and communicating those results to 31 35 46leadership. 23 44 5 28 Bar title 8 Other 10 23 15 39 7 36 2 No formal process 44 34 62 Overall High communication effectiveness Low communication effectiveness 30 2011 – 2012 Change and Communication ROI Study Report 17
  19. 19. Measuring the success of change initiatives Among firms with effective change Figure 16. Highly effective organizations measure against their goals management, we find that measurement also How effective is your organization at the following? plays a significant role. Across all participants, 0% 20% 40% 60% 80% only 37% are measuring progress against their De ning clear, measurable goals for the impact of changes change goals (Figure 16). The highly effective 39 change management organizations are six 76 times as likely as low-effectiveness companies 14 to have this practice in place. Measuring progress against goals established for change initiatives 37 73 12 Overall High change effectiveness Low change effectiveness Measuring your way to success We know measurement matters. But what Figure 17. Six methods and metrics to measure outcomes do you measure? The best organizations To what extent do you use the following methods or metrics to measure objective outcomes, such as changes determine the effectiveness of your internal communication efforts? in employee behavior, including program 0% 20% 40% 60% 80% participation rates or reporting safety concerns, Employee awareness or understanding of a program or message as well as links to business metrics, revenue or via focus groups or surveys sales growth (Figure 17). 30 46 8 4 Employee behavior change (e.g., reporting safety concerns) 28 as reported via focus groups or surveys 68 20 27 47 7 20 40 Objective measures of changed employee behavior (e.g., increased employee 31 35 participation in a program) 34 44 5 28 54 Bar title 8Improved retention of critical talent 14 23 3139 36 45 2 12 Financial measures (e.g., revenue growth, pro tability) 34 46 22 Customer measures (e.g., sales growth) 35 48 22 Overall High communication effectiveness Low communication effectiveness18 towerswatson.com
  20. 20. “ Overall, only 38% of our participants report that their managers are effective at helping employees adapt to change.” Managers Play a Critical Role in meaning of these messages with their team. This Creating Confidence requires engaging with managers, listening to their reactions, supporting their personal change journeys It’s not news that managers are key to effectively and crafting content that can be delivered in a delivering messages and engaging employees. manager’s own voice. When leaders and managers convey confidence to employees, they build trust, which can help stoke Overall, only 38% of our participants report that their employee engagement. In many ways, managers managers are effective at helping employees adapt are the face of the organization for employees to change. Training for managers is quite common, — translating mission, values and strategy into but relatively few organizations train them effectively behavior and words. to help employees through change. We find that, among all participants, 82% train managers to help The best companies recognize this connection employees adapt, but only 36% find that training and go beyond simply providing managers with effective (Figure 18). The data clearly show that highly information to pass along to employees. They effective companies are getting a better return on prepare managers to move away from cascading their investment in training than less effective firms. corporate messages and toward sharing the Figure 18. Nearly all companies train managers, but is the training effective? How effective is the training your organization provides for managers in helping employees adapt to change? 0% 20% 40% 60% 80% 100% Overall 82 36 35 High change effectiveness 92 63 Low change effectiveness 32 67 13 Percentage that train Percentage of those that train that are effective 2011 – 2012 Change and Communication ROI Study Report 19
  21. 21. Community Building a sense that employees and leaders are in it together — sharing both the challenges and rewards of working What do the best do to build community? First, they The best organizations use a variety of media and recognize that a shared experience and purpose is are careful to remain consistent while localizing the important to the business. They understand that message when necessary. They segment audiences building community requires an ongoing conversation. to make sure tailored messages reach those who They do not shy away from connecting with employees, need to hear them, and they take care to nurture an and they have the courage to address controversy. inclusive culture. Again, in these efforts, managers and leaders play an important role.20 towerswatson.com
  22. 22. Creating Community With Social Media Figure 19. Using social media for collaboration, sharing ideas, community and team building By definition, social media enables social interaction. Do you use social media for collaborating or sharing new ideas? Is it effective? With social media technology, organizations extend 0% 20% 40% 60% 80% existing social networks beyond face-to-face interaction and design segmentation. While social Overall networks are ideally suited to building community 53 within an organization, overall, just over half (51%) 43 35 of our participants use it for this purpose, and High communication effectiveness only about one-third of those find it effective. Not 60 surprisingly, among companies that are highly 59 effective at communicating, we find a higher Low communication effectiveness frequency of use and effectiveness (Figure 19). 42 28 8 Social media is also well suited to support collaboration, and here we find a similar trend Do you use social media tools for community and team building? across all organizations. Is it effective? Overall 9 51 20 38 25 High communication effectiveness 59 50 21 Low communication effectiveness 15 11 41 23 Percentage that use it for this purpose Percentage of those that use it that nd effective 45 40 62“We communicate to make sure our people know where we are 52 45 going, why, and where they fit into the organization. Also, if communication is not upward, too, then you miss out on some really good ideas. An outfit that values real communication creates competitive advantage over those that don’t.” Lee McIntire Chairman and CEO CH2M HILL 2011 – 2012 Change and Communication ROI Study Report 21
  23. 23. Using social media effectively While two-thirds of respondents are more knowledgeable about using social Figure 21. Use of social media tools among media tools than they were a year ago, and 69% plan to increase their use companies that find it cost effective over the next 12 months, only about one-quarter (28%) report that these 0% 20% 40% 60% 80% tools are cost effective, and only 15% have related measurement tools in Instant messaging for social media tools among companies that Figure 24. Topics place. A larger share of our U.S. participants report that they know more 63 cost effective about social media than they did a year ago and have a policy in place 0% 20% 40% 60% (Figure 20). Social networks 63 Companies with effective communication are more than two times as likely Collaborating or sharing new ideas to report that they find social media cost effective. They also get more Leadership journal or blog support from their CEO, and have a documented policy and effectiveness Community or team building 58 measures in place. We believe these findings are related. Having both a Enhanced online employee pro les plan and measurement capability in place can help you build support among 56 Sharing feedback with senior management leadership and improve your overall success. Collaboration sites Organizations that report social media is cost effective are investing in Supporting organizational change efforts 51 new social media tools, especially instant messaging, social networks, and HR or other function journal leadership journals and blogs (Figure 21). The companies that find social Innovation 50 media cost effective use these tools to support collaboration or share new ideas; they also cultivate community or team building, and share feedback Video-sharing site Understanding how the employees job contributes to the organizations with senior management (Figure 22). 48 61 Figure 20. Effective communicators are more likely to find social media Employee journals or blogs Risk taking cost effective 46 50 To what extent do you agree with the following statements about your organization? 42 Podcasts 0% 20% 40% 60% 80% 100% 42 Twitter/Yammer My organization has a documented social media policy 42 43 30 45 Figure 22. Topics for social media tools among 37 companies that find it cost effective 77 0% 20% 40% 60% 80% I am more knowledgeable about using social media tools than I was 12 months ago Collaborating or sharing new ideas 64 76 51 60 Community or team building 64 75 86 Sharing feedback with senior management In my experience, the use of social media tools for employee 74 comunication has been cost effective at my organization 28 Supporting organizational change efforts 31 71 24 24 Innovation 28 70 Understanding how the employee’s job contributes to My organization has the tools in place to measure the organization’s success the effectiveness of our social media 61 15 13 Risk taking 24 50 14 19 Overall Asia Paci c Canada Europe and Middle East U.S.mmunicators are more likely to find social media 22 towerswatson.comree with the following statements about your organization?

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