Internal Affairs

More and more companies are recognising the benefits of internal communications programmes. Sophisticated versions can blend internal and external messages and incorporate the aspirations of employees.

There was a time when internal communication might, at best, have been a corporate newsletter or, at worst, the company grapevine. Marketing was regarded as something that you did externally, and it was often the case that sophisticated external activities appeared to co-exist happily with internal marketing efforts that were stuck in a Sixties time-warp.

As some companies have been forced down the road of change, they are starting to realise that an effective internal communications function can be a powerful strategic tool which means the difference between success or failure. Some of the inspiration for this change in attitude has come from the new companies which have been quick to respond to opportunities in an increasingly competitive market. Recently established hi-tech organisations are cited by many as models for effective internal marketing: their leaner, flatter structure helps to keep lines of communication clear.

According to Dr Gil McWilliam of the London Business School, another factor comes into play: cross-functional integration. “Companies such as the newer, smaller IT firms intuitively market internally because they are often smaller and staffed by like-minded people, making communication that much easier. When these companies start to grow and become filled with financial or marketing bureaucrats, they might have to change,” says McWilliam. “Companies then inevitably go through a period of specialisation, resulting in lots of functional silos. Then you can have turf wars,” she adds.

For larger, role-based organisations with defined functional specialisms, the challenge of internal marketing is a tough one and it is to these companies’ credit that they are now starting to adapt. While they cannot always get rid of functional specialisation simply because of their size, they are now realising that making internal communications more of a two-way street can only help them to compete.

It is no surprise that one of Britain’s largest food retailers provides something of a blueprint for large organisations. Safeway was forced to face change head on in 1994: out of a workforce of about 65,000 people, 3,500 left through redundancy or early retirement and 10,000 moved to completely new jobs. In addition, the whole context in which Safeway was working became increasingly tough.

“The entire retail market was becoming more competitive,” says Kevin Hawkins, Safeway’s director of communications. “We were threatened by discounters and Asda was reviving – the whole framework had become more intense, and restrictions on planning meant you couldn’t grow your way out of trouble.”

Safeway’s restructuring programme, called Safeway 2000, resulted in a refocus of the whole business. One of the initiatives was the Make a Difference programme, which included local action teams of between five and seven people, with the slogan “local ownership, local action, local solutions”.

Employees were encouraged to come up with ideas and suggestions, and were given ownership and influence to resolve problems which might arise in stores.

“From a business that was traditionally run along command and control lines, we changed the way we ran things, listened more to employees, and took on board and implemented ideas in a very different way – just as you would with external customers,” says Hawkins, who sees the Make a Difference programme as a continual internal relationship-building exercise.

British Nuclear Fuels (BNFL) is another large multi-site company which has realised the importance of implementing a two-way communications programme to help change the corporate culture. Such a change was regarded as a necessity if the company was to compete on the world stage.

A strategy review and research into employee attitudes revealed a strong sense among employees of an outdated civil service culture, which was top-heavy, bureaucratic and slow to respond – described by one employee as “like eating rice pudding through a straw”.

The actions that are now in progress at BNFL include a review of the communications infrastructure across the company, more emphasis on a team-based approach, and an increasing level of training for managers. “As we are attempting to become world class, we should have world class communications to match that,” says Peter Osborne, one of the action team leaders working on the project. “This approach to communications will help to change the more bureaucratic culture we have at the moment.”

The advertising world has not been slow to catch on to demand from companies which wish to change the way they communicate internally. WPP Group has recently launched its own dedicated internal marketing agency, Banner McBride, after receiving an increasing number of requests for help from existing clients. “WPP decided there was an opportunity in the market,” says managing director Mike Pounsford. “There is a lot of change going on, and a growth in the demand for consulting about change, change management and internal comm- unications in general.”

The agency was called in on Safeway’s Make a Difference programme. “We helped with a whole programme of workshops for middle management on a number of in-store activities,” he says. “Make a Difference was the internal communications programme that was consistent with Lightening the Load, the external cultural brand. It was a good example of integrating the internal and external marketing activities, which doesn’t happen enough.”

The idea of functional integration is a common theme among internal marketing experts such as Pounsford and Dr McWilliam. One of the most obvious areas where there needs to be further congruence is between internal and external marketing activities: it makes sense for employees to send out a message that fits in with the images transmitted by marketing campaigns. Unfortunately many companies fall down on this and as a result are not able to deliver on promises to consumers. “I think there’s too much emphasis on the marketing people sending one message to the market and internal communications sending a message that is not aligned with the external,” says Pounsford.

Integration of the internal-external marketing functions leads inevitably to activities normally associated with the human resources department. The reasons for this make sense: if an employee is to sing the corporate song with any enthusiasm, he or she has to feel good about and valued by the organisation. As a result, employee training and motivation are now being seen as critical success factors in internal marketing.

Bill Quirke, author of Communicating Corporate Change (McGraw Hill) and managing director of Synopsis Communication Consulting, says he is seeing a coalition inside the organisation between human resources, marketing, and internal communications. “People are now realising that what’s wanted is emotional labour, so that what the individual wants out of life is linked to what the company wants. Most internal marketing is about linking the individual’s agenda – such as who do I want to work for and why – to the organisation’s agenda of how do we serve customers in the market.”

This is a sentiment echoed by Pounsford, who believes one of the challenges for organisations is to get marketing and human resources to work more closely together. “Marketing people don’t have a lot of time for human resources people, and human resources people think marketing people are all smoke and mirrors,” he says. “These are two very important disciplines that need to work together.”

One company which has successfully integrated both functions is the Argyll Group of marketing and PR consultancies. Not surprisingly, the company is small – 54 like-minded employees. It has a typical matrix-type structure, where employees are organised into cells of no more than 25 people who have complete autonomy over the projects they work on.

Argyll has taken human resources away from a specialist and integrated it cross-functionally. Across the group there is an investment in employee development that reflects a broader relationship marketing strategy, where the retention of employees is seen as the priority. “Most PR organisations don’t invest in their people and we are a people industry,” says Argyll chief executive Crispin Manners. “Success or failure relies on the performance of your people, so we’ve got to give them the tools and make them feel like they want to do it. The motivation has to come from within and you have to have an environment that caters for the individual.”

It is clear then that companies are now paying more than just lip-service to the fact that their employees are their most valuable resource and internal communication is playing a vital role in bringing employees from across all functions into the fold.

Internal marketing has come a long way from the Chinese whispers of the corporate grapevine. According to Pounsford, further integration will mean a growing corporate communications function within the UK. This move echoes what has already happened in the US, where there tends to be more representation at board level of the communications function.

For many human resources specialists this development will come as no surprise – it has been a long time coming, but perhaps, at last, companies are beginning to realise the potential of what has, until now, been an extremely well-hidden asset.

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