Internal communication, the key to business success 

Estimated reading time: 10 minutes.

Editor’s note: Today on ZyncroBlog we would like to share a magnificent article by Gorka Zumeta. We would like to thank him for letting us reproduce it in its entirety. As you know, at Zyncro we are working day by day to give you tools that make internal communication much easier.

Gorka Zumeta holds a degree in Information Sciences from the University of Navarra, has completed the Management Development Program (PDD) at the IESE Business School and has worked principally at Cadena SER. He is an expert in Corporate Communication (internal and external) and lectures on Communication at ESIC Business & Marketing School and Radio at CES, both in Madrid.

In this article, published on his blog, Gorka speaks in depth about the importance of internal communication as the key to business success. Thanks, Gorka, for allowing us to reproduce it in full below.

“Internal communication, the key to business success”

Internal Communication

When things go well, it’s easy to look after internal communication

The headline is a clear declaration of intentions: use communication as a tool for attaining notable achievements in the company’s objectives.

A headline that inevitably needs to be associated with another concept that employers find hard to assimilate: communication in general, and internal and external communication in particular, should never be identified with ‘expense’, rather, with ‘investment’.

Companies need to invest in raw material, in technology, in sustainable energy consumption, but the fundamental pillar for everything to work better is internal communication. It’s not only the best investment, it’s the top investment.

Modern theories talk about Internal Communication 2.0, based largely on the tools that new technologies make available to us, with a special emphasis given to new personal communication channels.

Those in charge of Internal Communication are forced to recycle their knowledge continuously with the new developments that mark the technological evolution, which certainly seem never ending.

It’s true that these tools favor communication—I’m not going to argue that—and if they are used properly, they can provide greater efficiency in this process between a company and its employees.

Objectives and strategies of Internal Communication

The main goal of Internal Communication in any company, regardless of its size, is to create a corporate culture, stimulate a pride of belonging to the company, and hence ensure greater employee involvement and participation in the company’s objectives. In short, it’s about motivating employees, something that only can be done vertically, from top down, never the opposite way.

To develop these objectives, Internal Communication uses different strategies with a tendancy towards a common destination:

  • Readdressing and reconciliating the work-personal life balance
  • Promoting the retention of talent, stimulating teamwork
  • Saving money through better resource management
  • Improving the public image of the company
  • Managing knowledge
  • Supporting the free flow of information on the company’s progress.

Internal Communication—and there’s reason to it—helps to reduce incertainty and prevent the feared ‘rumorology’, one of the main enemies of any company.

All manuals on ‘Internal Communication’ generously quote concepts like the company’s mission’, or employee loyalty’, identifying employees as the internal customer’.

So in other words, according to this theory, companies not only have to sell their products to the outside world, but also sell themselves to their own staff.

 

We’ll analyze at this delicate issue at a later stage.

Internal communication

If the information doesn't leave the office, the company has a major problem

So far we’ve revised the main lines of theory marked by Internal Communication, but what is the real environment in which companies move nowadays?

Unfortunately, the crisis is causing thousands of SMEs to disappear and staff to be ‘restructured’ in large companies, which in many cases translates into mass redundancies.

It goes without saying, it’s not usually dealt with from the best of contexts, i.e. asking employees to become motivated, loyal, identify, etc. with their company.

Internal Communication in crisis

The circumstances that the business world is experiencing, immerse in years of recession and crisis, have forced the parameters governing the relationship with employees to be revised. Against this backdrop, a lack of information is fatal.

Silence does nothing more than feed the rumor-mongering, generating fear, the worst feeling that any company can generate. If fear, instability, uncertainty, insecurity take over, it’s more than likely that it will just accelerate the closure.

So the main goal is to keep information going on the commercial activity, the lifeline of the company.
acuerdo

But what happens when things go wrong?

But the fact that information flows doesn’t automatically mean that there’s good communication. Other factors come into play beyond those of merely passing on data.

Internal Communication 2.0 is questioned in a crisis. It’s not enough to resort to this new technological formulation to calm the nerves of employees in a company whose survival is hanging by a thread.

No employee will want to delve into the intranet for them to find the bad news that next month they’ll be joining the unemployment ranks. And yet more than one has gone to court over being fired by email (or by bureaufax).

These cases should be displayed out in the open for public ridicule for those who commit them and shows their absolute lack of not just professionalism but pure human empathy in dealing with their subordinates.

The Spanair case

The recent closure of the airline Spanair, which received in extremis financial aid from the Barcelona City Council and the Catalan Regional Government, has illustrated to onlookers an absolute lack of internal transparency.

The company’s lack of resources was common knowledge yet no one could forsee such a hasty, impending end. The directors—headed up by the businessman Ferran Soriano—recognized that they suspended flights ‘for safety reasons’, because the workers ‘were agitated’. A decisive symptom of the lack of an effective internal communication policy.

Ferran Soriano

Ferran Soriano, Chairman of Spanair

How could they be anything but agitated if the salvation of the company, Qatar Airways, finally announced that it wouldn’t become shareholder in Spanair?! The delicate financial situation that the Catalan airline was going through, with debts to the tune of more than three hundred million euros, no credit lines and the public channels (authorities) drained, had led it to insufficient cash flow even for purchasing fuel.

Against this backdrop, not only was information essential, but fluid communication between board and union representatives should have been a must.

Maybe Spanair’s situation was already irreversible and there was no other way out other than closure, but the truth is its main director, Ferrán Soriano, said to have a starting salary of 600,000 euros, later reduced by half to combine this responsibility with the rest of his network of companies (in other words, 300,000 euro for a part-time job), saw the drop in revenue in the company long before January 28 when he decided to cease its activity.

The progressive downslide in income and the lack of competitiveness required adjustment measures long before, without mentioning the lack of control held by the Catalan authorities over the financial aid granted to Spanair.

Spanair’s economic activity had deteriorated long before January, and August 2011, for certain. And even before that. However the workers lacked reliable information on their company’s operations. They lived and worked in ignorance, a far cry from the balance sheet and, hence, the company’s future. How could this conflict have been solved?

There are no infallible rules, of course; but I think that internal communication—inexistent in this glaringly obvious case—was, modestly, one of the keys to success. There wasn’t any, nor was it expected. And if there was any, it was completely whimsical.

The example of the small fry

Lastly, Internal Communication is the safeguard of the company’s survival.

Without mentioning names, I refer to two direct cases that I know of SMEs that continue operating in Euskadi (the Basque Country), whose industrial network has managed to ensure that the effects of the crisis are less toxic that in the rest of Spain.

In both cases, Internal Communication—and not Internal Communication 2.0, with all due respects—has enabled their activity to continue, despite being directly threated with closure.

Internal CommunicationIn one case, there were ten operators as well as the director and the managing director, brothers; and in the other, four workers and the owner, who also worked in the same way as his employees. In both examples, selected from the machinery sector, communication between the team was fluid.

Without going as far as forming fast friendships between them, the relationship in the second company was a much closer one, widely surpassing the usual employer-employee distance.

Faced with a drop in revenue, everyone, employers and workers alike came to an agreement to reduce their salaries, so that they were in line with the income statement. The decision was made with the figures laid out before them.

There was a willingness for continuity from everyone and the decision was made unanimously. In both case, the decision was the right choice because in both examples, the situation, thanks to the international market where they have launched themselves, has enabled them to recover their position.

 

“The shoemaker’s son always goes barefoot”

Companies whose corporate mission is within the communication area should, by simple coherence, practise communication at home.

But far from complying with that desideratum, they exercise misinformation and feed rumors.

The Confidentials or insider newsletters that fill the internet with their news—some biased, others poisoned— comply with the role of the intranet in many journalistic companies. Their employees give them credibility that they are unable to win it with their executives.

ConfidentialIf that wasn’t enough, in some companies, the truthfulness of these news pieces suggest that their sources belong to the staff in other companies, due to the level of information they possess. I’m absolutely certain that some companies look for spies and in others, they have been discovered.

Moving in that strategy is, without a doubt, the biggest mistake that can happen in a company. More so if their goal is precisely communication. Often, the pages of newspapers dedicated to that section, to ‘Communication’, have a two-fold purpose: sing the praises of their own actions and attack the competition’s progress.

Just look at the pages that El País dedicates to El Mundo and vice versa. The attack not only damages one or another, but by extension it mars the prestige and the credibility of the entire profession.

 

Communication

Internal Communication, essential in times of crisis

One thing is theory and another how it is applied in practice. The policy of fine gestures, from one to another, employers and employees, implies the joint acceptance of an adverse context and the univocal reply to the challenge.

A businessman can’t go about flaunting his economic position, showing himself off in the public eye when the company that he manages is undergoing a poor financial situation.

At the same time, you can’t ask staff to be loyal when the company decides to embark on a redundancy program, not to ensure its survival, but to maintain its profit margin. In the same way, workers cannot respond to the perseverance of the company’s management in finding a solution with an all-out strike.

The crisis is forcing both sides to reach an agreement. The situation—their survival—condemns them to find common ground. But if there is no communication, no information, the road to understanding is almost impossible. Though the size of the company can condition the progress of the internal communication policy.

At first sight, it may seem easier to come to an agreement with a select few than do it when all parties means a hundred or a thousand workers. But there lies the skill and the gift of opportunity of the spokespeople. At times, when it comes down to it, Internal Communication is just talking and trying to understand one another. Let’s not agonize over it anymore…