Home Is Where the Benchmark Is
Measurement is a tough job, but PR's gotta do it. And in the vast ocean of communications disciplines and benchmarking strategies, many PR pros are choosing to launch their measurement at home (internally), where it's "safe." Research conducted by the Public Affairs Group reveals that of all the communications disciplines being put under the microscope, employee communications is the most frequently measured and tweaked.
Perhaps this trend reflects a tendency for communicators to kick off their first attempts at measurement in familiar territory. "Internal communications is easiest because you can measure attitudes of employees, productivity, product development and manufacturing efficiencies," says Mark Schannon, partner/director at Ketchum DC. You can also show an immediate affect on the bottom line when you track turnover - a cut and dry indication of employee satisfaction - and make improvements. "For us to hire a person who's worth $100,000, we pay $35,000 to a headhunter right off the bat," Schannon says. "So if you've got a 25 percent turnover rate and you're paying a headhunter one third commission every time, plus expenses? You do the math."
Putting a tourniquet on hemorrhaging recruitment budgets is certainly a critical issue. And when communicators can stop the blood, CEOs are happy. But many companies are benchmarking their internal communications with hopes of seeing a different kind of financial gain - in the form of increased revenue streams.
Employee Morale Feeds Customer Service
Sears Roebuck and Co. is a prime example. Measurement studies conducted by the mega-retailer have shown that improved employee communications trickle down into better customer service experiences, which, in turn, translate into bottom line gains. "We measure the macro - employee attitudes, which lead to customer satisfaction, which lead to financial performance," says Tom Nicholson, director of PR and communications at Sears.
This measurement philosophy extends beyond the retail industry. Insurance powerhouse Allstate also is tracking the effectiveness of its internal communications toward the goal of improved customer service. The company already has realized dividends on this investment via improvements in its claims department's customer service ratings.
"Our intent from the beginning was to tie communications to employee effectiveness and then to customer satisfaction," says Pattie Overstreet-Miller, assistant vp, corporate relations at Allstate What Allstate doesn't yet know is which specific drivers are pumping up employee morale and translating into customer satisfaction. But the company intends to find out.
Where Science Falls Short
Overstreet-Miller admits there are certain aspects of employee attitudes that just can't be measured. "There's a fuzzy area surrounding whether people buy into and take ownership of a corporation's methods and objectives to the extent that they become deeply committed to it," she says. Like PR, marketing also seeks to influence human behavior, but its goal is clear: to get someone to buy a product. When you're talking about influencing a very broad range of emotional commitments among employees, outcomes are harder to measure.
"You may be able to get people to follow a certain process when they answer a telephone or deal with a customer," Overstreet-Miller says. "But what's more important is to get them to take ownership of that customer and to jump through hoops for that customer." She cites Southwest Airlines as a cultural paragon in terms of customer service, and attributes the company's high staff morale to the leadership of CEO Herb Kelleher.
"He knows instinctively how to pull the right levers," she says. "But what we want to know is, how do you go beyond the instincts of a great leader and how can you make this a tool we can use?"
Maybe the answer is to view leadership as the tool that needs R&D. At Sears, internal measurement of employee attitudes resulted in a reallocation of funds toward communications training for managers.
"Individual management skills have more impact on employee attitudes than any communication program," Nicholson says. "The customer's experience in the store is far more powerful in shaping their attitude about Sears than all of our advertising, PR and communication combined."
New Roles for Communicators
PR roles are changing. As companies reinvent themselves, a new level of communicator is rising from the ashes and claiming a seat in the executive suite.
"Probably the most fascinating conversation I've overheard recently was between two [communications executives] discussing CEO turnover because of M&As," says Edie Fraser, president & CEO of the Public Affairs Group. "You've got a new CEO coming in and there's a change of culture and a change in making certain that staff are truly getting proactive communications to the new CEO. You're also making sure the exiting CEO has an integrated function, so that analyst communications and customer relations and employee communications are in sync." Here is a situation in which internal communications expertise plays a role at the highest level - in fact, facilitating a transfer of power.
While many communicators view measurement as a means of justifying their value to CEOs, there are other advantages to solid data collection. Often, concrete data may force corporate leaders to come to terms with their own inadequacies.
Jim Shaffer, principal at the management consulting firm Towers Perrin, notes that when employee morale is in the gutter, it's often due to a disconnect between what the company (translation: CEO) says and what it does. "If you communicate that teamwork is important, but you have a pay system that rewards individual achievement, then your 'do' is out of sync with your 'say,'" he explains. "If you say speed is important, but your structure requires 16 signatures to do anything, then you're not consistent."
Once upon a time, a PR exec might have been fired for telling a CEO that employee turnover was the CEO's fault. Today's executive communicator - armed with measurement data as proof - is earning eternal respect as a strategic innovator. Show a CEO how communication affects ROI and you may even get a raise in the process.
(Schannon at Ketchum, 202/835-8812; Overstreet-Miller at Allstate, 847/402-6334; Nicholson at Sears, 847/286-5231; Shaffer at Towers Perrin, 703-351-4750; Fraser at PAG, 202/466-8209)