There’s a reason why most communications professionals obsess about measurement and ROI – most executives see little value in corporate communications. Most executives, not all, see corporate communications, like the intranet, as a cost center.
It is one of the reasons why I obsess about measurement and ROI; why I wrote a 60-page white paper called Finding ROI: Appraising the Value of Intranet Investments The value of employee communications and the corporate intranet is tremendous, and it can be measured in terms of…
- Cost savings / cost avoidance
- Customer satisfaction
- Employee satisfaction
- Employee retention
- Management satisfaction
- Increased sales / revenue
- Employee productivity
The Watson Wyatt 2005/2006 Communication ROI Study (cost is $45) adds some metrics to the value of corporate communications. Key findings:
- The 2005/2006 study found evidence that communication effectiveness is a leading indicator of financial performance.
- Companies that communicate effectively have a 19.4 percent higher market premium than companies that do not.
- Shareholder returns for organizations with the most effective communication were over 57 percent higher over the last five years (2000-2004) than were returns for firms with less effective communication.
- Firms that communicate effectively are 4.5 times more likely to report high levels of employee engagement versus firms that communicate less effectively.
- Companies that are highly effective communicators are 20 percent more likely to report lower turnover rates than their peers.
- Two-thirds of the firms with high levels of communication effectiveness are asking their managers to take on a greater share of the communication responsibility, but few are giving them the tools and training to be successful.
- On average, firms within the financial and retail trade sectors rank among the most effective communicators. Health care, basic materials, telecommunications and other service companies rank among the least effective communicators.
Comparing the 2003/2004 and 2005/2006 Studies:
- An 8 percent increase in companies relying on a reactive approach to communication
- A 10 percent increase in companies using formal communication measures
- An 18 percent increase in companies in which communicators play a lead role in managing the content of the intranet
If you don’t have a comprehensive communications plan – note comprehensive not just a one-pager in some notebook – that focuses particularly on face-to-face people communications supported by a powerful intranet, what is your excuse?
© 2006 Toby Ward - Prescient Digital Media