As a result, communication dollars can be spent
on the programs that have the greatest return on investment,
and communication drives results through improved business
performance.
Here’s How It Works
To quantify the impact of communication, it is necessary to
conduct a survey. The key here is that the research tactic
required for measuring impact goes way beyond the scope of
traditional research methodologies.
With traditional research, you conduct a survey and receive
a report of results that identifies the strengths and weaknesses
of your programs. Based on this, you develop initiatives that
will improve the weaknesses and maintain the strengths.
But how do you know that improving your weaknesses will have
any impact on your company’s bottom-line? The answer
is, you don’t, because you are left making assumptions
based solely on the strengths and weaknesses.
Impact Research: Advanced research methodologies
tell us which areas to focus on by identifying the key drivers
of performance and quantifying the impact of communication.
In addition, these methodologies can be applied to both internal
and external communication. Here’s a brief summary of
how it works:
1. Establish a Hypothesis. First, think
about how communication influences your organization. What
communication channels exist? How do these channels help
people understand the organization and how they contribute
to it? How does communication influence employee involvement?
How does employee involvement influence the work environment?
What do you want to accomplish as a result of your communication
efforts? Where does all of this ultimately influence financial
performance? You may need to conduct focus groups to obtain
this information.
Use the answers to these questions to draw a visual diagram
of how communication influences your organization. See the
sample below.
Sample Hypothesis Model: Impact of Communication on
Performance
2. Develop a Survey Instrument. Using
your hypothesis model, develop a survey instrument that
will test the model. This is a critical step—the survey
questions must be written properly and in a manner that
will enable you to test your model.
Be sure to include questions about each of your communication
programs, as well as questions about the results of your communication,
such as understanding business issues and opinions about the
level of employee involvement, opinions about the overall
work environment and so forth.
3. Identify Your Measures of Performance.
Using the model you developed, figure out how to obtain
measures of performance for the organization. You can use
many different types of measures. Some you may be able to
include on the survey itself, such as opinions about the
overall work environment, intentions to stay with the company
(a measure of turnover) or attitudes about employee productivity.
Ideally, you’ll want to include actual bottom-line
measures, such as business unit revenue, performance against
departmental budgets, turnover rates, safety scores, performance
scorecard results or others. These types of measures are typically
collected outside the survey instrument. For example, your
finance department may be able to provide business unit revenue
information, or your HR department may provide turnover or
performance scorecard information.
4. Conduct the Survey. Conduct the survey
in a manner that gives everyone an equal opportunity to
participate. It is important to obtain enough completed
surveys to conduct the impact analysis. For example, if
you are using business unit revenue as your measure of performance,
then you need enough employees in each business unit to
participate for the results to be statistically representative
of each business unit’s entire population.
5. Use Advanced Statistical Analysis to Interpret
the Results. If all you do with your survey data
is run a frequency analysis that shows the percent of respondents
that checked each box on the survey, then you’re short-changing
yourself. Survey data contains a goldmine of information,
but it takes a skilled analyst to uncover the gold.
Applying advanced statistical analysis techniques to the
hypothesis model you developed earlier will enable you to
eliminate the guess-work from strategic planning by actually
identifying which communication programs have the greatest
influence on the organization. These are the key drivers of
performance.
In addition to identifying the key drivers, advanced analysis
can quantify the impact that communication has on your organization’s
performance. By doing so, you can actually predict changes
in the organization’s performance based on improvements
to communication. Here, you’ll match up the performance
measures you developed above (in step 3) with the survey results,
and use statistical analysis to quantify the linkages between
the two. (Unless you have a strong understanding of statistics,
you should use a qualified statistician for this type of analysis.)
For example, let’s say your model results show that
a 10 percent improvement in your key communication drivers
will lead to a 2 percent increase in business unit revenue.
If your company has revenues of US$100 million, that’s
an increase of US$2 million, directly attributable to improved
communication. And if you can achieve those improvements with
an investment of US$500,000, that’s a 400 percent return
on investment!
Sounds too good to be true? Consider these case studies:
- For a regional banking operation, Joe Williams Communications,
Inc. conducted a multi-year research project in which a
bank wanted to improve its internal work environment. The
research identified three key drivers that had the most
impact on their work environment. Over five years, the bank
implemented initiatives to improve those key drivers, directly
resulting in a 17 percent improvement in their internal
work environment, even during a major employee layoff. At
the beginning of the project, only 35 percent of employees
said there was a good level of trust between management
and employees. In a follow-up survey, that number increased
to 50 percent. The statistical analysis model accurately
predicted these improvements throughout the five-year study.
- For an international publishing, financial services and
media company, specific key drivers for each of its four
business units needed to be identified. Incorporating business
unit revenue and net income into the model showed that a
10 percent improvement in their key communication drivers
would result in US$15 million in additional revenue.
- For a telecommunications company with high turnover problems,
Joe Williams Communications identified specific channels
and vehicles that were directly linked to how long employees
intended to stay with the company. Improving these channels
by 12 percent would decrease their turnover rate by 6 percent.
With some advanced research and analysis into the key drivers
of organizational performance, the next time you walk into
the CEO’s office, you’ll be armed with data that
shows the actual measure of the impact of communication on
your organization, presenting a solid business case for investments
in your key communication drivers.
John Williams is President of Joe Williams Communications,
Inc., a 19-year-old communication research, training and consulting
firm. You may reach him at John.Williams@JWCom.com
or 918-336-2267.
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