Towers Watson 2011 – 2012 Change and Communication ROI Study

Clear Direction in a Complex World How Top Companies Create Clarity, Confidence and

Community to Build Sustainable Performance 2011 – 2012 Change and Communication ROI Study Report

2011 – 2012 Change and Communication ROI Study Report 1

Clear Direction in a Complex WorldHow Top Companies Create Clarity, Confidence and Community to Build Sustainable Performance

Table of Contents

Executive Summary 2

Key Findings 3

Introduction 4

Defining Communication and Change Effectiveness 5

Assessing Effectiveness and Performance 6

Clarity 8

Confidence 14

Community 20

Conclusion 27

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In a challenging and dynamic business world, success depends on establishing a clear path to navigate through complexity. Organizations and their leaders — wherever they are around the world and whatever business environment they face — must be able to chart the right course and deliver results. Organizations that are doing this best have leaders, managers, communication and change practices that create:

Clarity: Conveying to employees the direction of the business along with ways they can contribute to the enterprise

Executive SummaryConfidence: Supporting development of leaders and managers to better deliver confidence, and using a disciplined process to ensure effective use of change and communication resources

Community: Building a shared experience, a sense that employees and leaders are in it together — sharing both the challenges and rewards of working

This report describes what the companies that communicate and manage change effectively are doing, and how practices compare globally. Read on to find the steps you can take to create a clear direction for your organization.

At a Glance What drives ROI? Confirmed: Our fifth survey finds a strong relationship between superior financial performance and effective communication and change management — in any industry, region or economy.

Effective communication and effective change management make a difference. Organizations that are highly effective in both their communication and change management practices are more than twice as likely to significantly outperform their peers as organizations that are not highly effective in either of these areas.

Creating a clear direction in a complex world requires conveying a consistent story about the business, creating greater certainty, confidence and engagement with employees, and building a shared experience across diverse audiences.


Our 2011 – 2012 Change and Communication ROI Study sheds new light on the pivotal role that effective change and communication processes play in global organizations today. Here are the lessons learned:

• An employee value proposition (EVP) positions a company’s employment deal as unique and helps bind employees to an organization. Among companies with high communication effectiveness, roughly two-thirds (62%) have a clearly articulated EVP. While companies highly effective at communicating are nine times as likely to have managers who are effective at promoting the EVP to employees (36% compared to 4%), there remains much room for improvement.

• When compared to companies with low change and communication effectiveness, firms that are highly effective at change management are nearly five times as likely to create an integrated communication and change management strategy — and more than eight times as likely to continue to exhibit new behaviors and use new skills after changes are made.

• Building a shared experience is another hallmark of highly effective organizations. Companies that are highly effective at change management use various media and their managers to create the sense that employees and leaders are “in it together,” and are about seven times as likely to create a sense of ownership among employees as part of a change initiative and to build the critical mass of support necessary to be successful.

• While roughly two-thirds (64%) of respondents are more knowledgeable about using social media tools than they were a year ago — and 69% plan to increase their use over the next 12 months — few know for sure whether they’re working well. Only 28% of all participants report these tools are cost effective, and only 15% have measurement tools in place for social media. The firms

that find social media cost effective are most likely to be investing in social networks (63%) and leadership journals or blogs (58%) to support collaboration, share new ideas and cultivate community or team building.

• Managers and leaders are more important than ever in delivering effective communication and change management. Nearly two-thirds of our participants report that managers are taking on more responsibility when it comes to communication with employees, but only 28% are evaluating managers on their communication effectiveness. This gap is a global issue and has been consistent across all five of our studies.

• Many companies are training managers to communicate and manage change effectively, but very few find it effective. Given the increasing complexity and diversity of organizations, it is eye-opening that only 35% of firms that train managers how to listen to different points of view actually find the training effective.

• Organizations that manage change effectively are more likely to have a formal, systematic process and a dedicated staff that includes the internal communication function. They typically involve internal communicators earlier in the decision-making process — while the company is identifying a challenge or opportunity and considering possible approaches to address the required change.

Key Findings

As revealed in our prior studies, effective communication and financial performance are strongly related: Companies that are highly effective at communication are 1.7 times as likely to outperform their peers.

Our research confirms that effective communication is an important element of change management, and if both are done well, there is a stronger relation with financial performance. Companies highly effective at both communication and change management are 2.5 times as likely to outperform their peers as companies that are not highly effective in either area.

Effectiveness and the bottom line

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For years, our ROI study has found a strong relationship between effective communication practices and better financial performance. In this, our fifth study, we have expanded our inquiry to include change management. Our latest research finds that organizations that are highly effective at both are more than twice as likely to outperform their peers than organizations not highly effective at either.

How do the best do it? If you think of the current business environment as a white-water river, internal change managers and communicators often serve as guides for their organization. The best guides match their knowledge and experience on the river with the abilities and needs of the crew. They help direct the passage through the rocks and anticipate the course corrections that may be needed if the unexpected occurs. In the process, they create clarity, build confidence and help establish a shared purpose.

The best internal change managers and communicators guide their organizations by helping to create:

• Clarity: Delivering messages about business direction and performance, as well as all aspects of the employment deal

• Confidence: Engaging leadership at all levels and following a disciplined process for changing and communicating to create greater certainty, confidence and engagement among employees

• Community: Building a shared experience across diverse audiences, geographies and business units, and making greater use of new media tools

The best change and communication guides position their companies to keep employees engaged in the business, retain key talent, provide consistent value to customers and deliver superior financial performance to shareholders.

Introduction


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Asking for rapid feedback from employees about their opinions on the company

Integrating new employees into the organization

Educating employees about organizational culture and values

Helping employees understand the business5858

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Figure 1. Seven practices for effective communicationDefining effective communication

How effective is your organization at each of the following areas?

Providing individuals with information about the true value of their total compensation package

Providing information on organizational performance and �nancial objectives to employees

Communicating to employees how their actions affect the customer

Overall

Note: Percentages include respondents indicating “effective” or “highly effective” in these areas.

Highly effective firms represent the top third of study participants, with the highest overall communication effectiveness or change effectiveness scores based on their responses to the survey items that measure these areas. Less effective firms represent the bottom third of participants, with the lowest overall effectiveness. We then look at the financial performance of the companies in the highly effective group to measure the relationship between financial performance and effectiveness.

The following characteristics of effective communication and effective change management were developed by talking with our clients, reviewing available academic and other external research, and looking at our own experience and research.

Measuring Communication Effectiveness

We measure communication effectiveness using the seven practices in Figure 1. The organizations in the top third of the scores for this measure are designated “highly effective communicating companies.” Although there has been progress, there is still a lot of opportunity for improvement in these fundamentals.

Measuring Change Management Effectiveness

We measure change management effectiveness using the five practices in Figure 2. The organizations in the top third of the scores for this measure are designated “highly effective change management companies.”

Comparing High-Effectiveness and Low-Effectiveness Companies

Most questions in this survey used a five-point Likert or effectiveness scale. Where we compare high and low effectiveness, we are showing how many of the organizations designated as having high or low change or communication effectiveness responded to the item with a four, a five (agree/strongly agree or effective/highly effective) or a yes.

Changing at the right pace

Identifying the changes that are necessary to be successful

Achieving the desired operational goals from change initiatives

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Figure 2. Five practices for effective change managementDefining effective change management


Improving organizational �nancial performance through change initiatives

Sustaining positive impact from changes for at least �ve years

Overall

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Note: Percentages include respondents indicating “effective” or “highly effective” in these areas.

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Defining Communication and Change Effectiveness

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Assessing Effectiveness and PerformanceSince some of our participants are not publicly traded and do not have mandatory financial disclosures or share prices, we asked participants to rate how their organization performed financially compared to other companies in their industry over the past year. Where possible, we gathered financial information and confirmed that the companies that rated themselves as high performers had higher total return to shareholders, market premium and revenue per employee than other respondents.

In order to conduct our analysis, we divided the participants into three groups based on their self-reported financial performance relative to their peers’. The three groups are defined as follows:

• Organizations that report performing substantially above their peer group are considered high-performing organizations.

• Organizations that report performing about the same as or slightly above their peer group are considered average performers.

• Organizations that report performing slightly or substantially below their peer group are considered below-average performers.

Using this information, we confirmed the strong link between change and communication effectiveness and higher financial performance:

• Companies that are highly effective at communication are 1.7 times as likely to be high performing than companies that are not highly effective at communication.

• Companies that are highly effective at both communication and change management are 2.5 times as likely to be high performing than companies that are not highly effective at either.

In a recent article in Strategy@Work, Towers Watson’s online magazine, Capital One Bank’s leaders offer the following advice for companies that need to prepare employees for significant change: • Use a data-driven approach that aligns with business results. Undertake an inventory of change requirements to better understand both the magnitude of impending change and the impact of individual changes on different employee groups and their businesses.

• Avoid traditional siloed thinking. Major change often has a cross-function, cumulative impact on employees that needs to be managed.

• Listen for results and concerns. Tell people what’s going to happen and what it means for them. Set up feedback mechanisms for two-way dialogue. Act quickly with real solutions, not inspirational platitudes.

• Define and measure success. Set target metrics for employee retention, engagement and customer satisfaction, and be honest about whether they’re met so course corrections can be made where needed.

• Help managers become change leaders. Managers are the ones employees actually look to for leadership, so give them the knowledge and tools they need to lead the change.

To read the entire article, visit towerswatson.com/lessonslearned.

Lessons learned


No matter how big the change you have ahead, effective change management processes, including communication, can have a significantly positive impact on your overall chances for success. Our data show that the organizations with the best change management are more likely to have a formal,

Overall High change effectiveness Low change effectiveness

Figure 3. Effective companies include communication in their change management processTo what extent do you agree with each of the following statements?

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The internal communication function is part of the change management staff

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My organization follows a systematic change management process

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My organization has a dedicated change management staff

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Figure 4. Effective companies involve the communication function early in the change processAt what phase does the internal communication function first become involved

in the decision-making process?

Not applicable

Only if a problem arises

Implementing the change

Planning the implementation

Selecting the approach to address the issue

Identifying possible approaches to address the issue

Identifying the problem or opportunity

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Identifying the problem or opportunity

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Figure 4. Effective companies involve the communication function early in the change processAt what phase does the internal communication function first become involved in the decision-making process?

Change management matters

systematic process and a dedicated staff that includes the internal communication function (Figure 3). These companies also involve their communication function earlier in the decision-making process (Figure 4).

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Highly effective firms are clear about their future with their employees, even when markets or strategies are in flux. Whether it’s about the business or the employee experience, there needs to be a sense of

direction and steps to follow. Managers and leaders can play a significant role in helping to create clarity for employees.

ClarityConveying the direction of the business and a clear path for employees to contribute


Figure 5. Effective organizations help employees understand the businessHow effective is your organization at the following?

Helping employeesunderstand the business

Overall Asia Paci�c Canada

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Providing information on organizational performance and �nancial objectives to employees

Figure 6. Highly effective companies communicate change clearlyHow effective is your organization at the following?


Clearly articulating what employees need to do differently to be successful

Communicating what the change means to individual employees

Communicating the business rationale for change

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Talk About Where the Business Is Headed

Since our first study, we’ve defined effective communication, in part, as helping employees understand the business and providing information about organizational performance. Today, we see just over half of all participants are effective at these fundamental practices:

• 58% of all respondents report they are effective at helping employees understand the business.

• 57% are effective at providing information on organizational performance.

Interestingly, there’s very little variation across regions on these items, though the figures are slightly higher in North America (Figure 5).

Be Clear About What the Change Means

During change, organizations with highly effective change management provide clarity for employees about the rationale for change and what the change will mean for them. Employees look to the company to put organizational and benefit changes into perspective and to tell them what they need to do differently to succeed. Highly effective communicators say more, not less (Figure 6).

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Articulate a Compelling EVP

Highly effective organizations clearly articulate their EVP as part of a well-thought-out strategy to attract, retain and engage top talent. Organizations that convey a clear message about the employee deal — including the total rewards program — find employees understand how things work, appreciate the value delivered and take action when required.

Organizations in the Asia Pacific region are more likely to report having a clearly defined EVP compared to other areas. Given the tight labor market in Asia, organizations there have an especially compelling incentive to articulate the reasons why an employee should be part of their firm. Other recent Towers Watson research indicates that other geographies with tight labor markets, such as Brazil, are also more likely to report that they have a clearly defined EVP.

The best EVPs are versatile and can be customized for critical talent, top performers or high-potential employees. Our data show that only 36% of study respondents are developing customized EVPs. As the battle for top talent continues, we may see more organizations pursuing this tactic in the future.

Companies with effective communication are nine times as likely as those with low-effectiveness scores to report that managers are effective at promoting the EVP to employees (36% compared to 4%). Even so, relatively few organizations are getting this right. Managers need to not only understand the EVP but also internalize the meaning in order to speak about it clearly and highlight what is most valued. Among companies that are highly effective communicators and train on this topic, 42% find it effective. So the best are not only better at defining the EVP, they’re also better at embedding it with their people. Figure 7 describes other ways in which highly effective organizations express their EVP.

The term employee value proposition, or EVP, refers to what the employer promises an employee can expect and what the employer expects in return from the employee. Also referred to as the employee deal, the EVP includes pay, benefits (including perquisites), the work environment and career opportunities. The best organizations align the employee experience with the internal brand as well as with the business and the external consumer experience. While an EVP can be aspirational, it must also be grounded in reality — the promise of the EVP must be credible and conform to the employee’s experience with the company’s people, policies and programs.

Employee value proposition

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Has a reputation among potential job applicants for having a good EVP

Has developed customized EVPs for different employee groups

Has a single, organization-wide EVP for everyone

Has a clearly de�ned EVP

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Figure 7. Highly effective organizations clearly articulate their EVPMy organization:

8th option

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Overall Asia Paci�c Canada Europe and Middle East U.S.


Managers Play an Important Role in Giving Clarity to Employees

Because managers in part deliver the promises made in the EVP, they play a key role in building trust and engagement in the organization. Highly effective companies are much more likely to have managers who clarify the organization’s vision and values through their words and actions. They are on the front lines when it comes to introducing new ideas and approaches to work, as well as in providing context and guidance regarding pay, performance and career growth. Yet, even with all the changes organizations have gone through over the past two years, fewer than half of all organizations report their managers are good at explaining the reasons for change to employees (Figure 8).

Half of the study respondents that have high communication effectiveness scores report their managers are good at helping employees with career planning and decisions, while more than three-quarters (77%) are good at helping set performance goals and providing feedback. Even at highly effective firms, managers are doing much better at talking with employees about short-term job performance than they are when it comes to long-term career growth (Figure 9). A failure to be clear with employees about long-term opportunities could have a significant impact on retention. Recent Towers Watson global research revealed that greater career advancement opportunity is often a key driver of employee retention, particularly among top performers, high potentials and employees with critical skills.

Figure 8. Trusted managers inform, encourage and explainManagers at my organization:

Overall High communication effectiveness Low communication effectiveness

Encourage new ideas and new ways of doing things

Are a trusted source of information about what is going on in the organization

Keep employees informed about organizational changes that affect their work

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Are good at explaining the reasons for changes that happen in the organization

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Figure 9. Managers are better at discussing short-term job performance than long-term career growthManagers at my organizaton are effective at:

Promoting the EVP

Helping employees with career planning and decisions

Enthusiastically implementing new approaches to work

Providing feedback to employees about their job performance

Helping employees set appropriate goals for their performance

Supporting the organization's vision and values through their actions

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How effective is the training your organization provides for managers in the following areas?

Overall response

High communication effectiveness

Low communication effectiveness

Supporting the organization’s vision and values through their actions

Percentage that train 82% 91% 69%

Percentage of those that train that are effective 43% 65% 19%

Enthusiastically implementing new approaches to work



Helping employees with career planning and decisions



Helping employees set appropriate goals for their performance



Providing feedback to employees about their job performance



Promoting the EVP



Firms that are highly effective at communicating are more likely to have managers who are skilled at delivering clear messages to employees. Effective organizations aren’t just conducting training — lots of organizations accomplish that. The best conduct effective training. They’re better at focusing the training on the critical outcomes and behaviors that fit their organization, people and objectives, and they do more to measure the results.

Training for managers


Topic Most prevalent vehicleBiggest differences from low-effectiveness companies

Business issues • Face-to-face discussions or webcasts with senior leaders (70%)

• One-way electronic media (71%)

• 2.4 times as likely to be using interactive electronic media

Organizational performance and financial objectives

• One-way electronic media (65%) • Face-to-face discussions or webcasts with senior leaders (63%)


Organizational culture and values

• One-way electronic media (67%) • 2.4 times as likely to be using interactive electronic media

• 2 times as likely to be using discussions with managers

Customer experience • One-way electronic media (54%) • 3.4 times as likely to be using interactive electronic media

Career development • Face-to-face discussions or webcasts with managers (62%)


• 2.0 times as likely to be using discussions with senior leaders

Health and welfare benefits and wellness initiatives



• 2.1 times as likely to be using discussions with managers

Retirement programs and planning



Value of the total compensation package

• One-way electronic media (40%) • Printed materials (39%) • Face-to-face discussions or webcasts with managers (32%)



• 2.2 times as likely to be using discussions with managers

A mark of effectively communicating organizations is taking the time to choose the right vehicles for the message and the audience. Most firms continue to rely on one-way electronic media such as e-mail or intranet pages. Effective communicators use a mix of media — including interactive electronic media such as online social networking — to better reach increasingly diverse and selective audiences.

Using the right vehicle for the message

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The most effective practitioners of change and communication create confidence. As the world grows more complex, demands more fast paced and media more varied, the basis for confidence building is fundamental, even old-fashioned. The best organizations build a plan, and they’re disciplined in

following it, measuring results and making course corrections. They engage stakeholders in the process, especially managers and leaders. By taking these fundamental steps, they reduce the level of uncertainty, indicating that someone has a firm hand on the wheel — and that breeds confidence.

ConfidenceEngaging leadership at all levels and following a disciplined process for changing and communicating to create greater certainty, confidence and engagement among employees


Lead With Confidence

Leaders are essential in increasing employees’ confidence in their organization. Authenticity, accessibility and transparency are all more common among highly effective firms (Figure 10). If leaders don’t have the courage to talk openly about what employees care most about, how can they expect employees to have confidence in leadership — or the organization?

Our data show that course-setting activities — creating a vision, building motivation among employees and confirming executive sponsorship — are much more common among organizations with effective change management (Figure 11). If they are carefully managed early on in the change process, these are among the activities that have the most influence on the success of a change initiative.

Assess the Current State

Effective firms not only plan ahead, they work to understand what’s going on now. They take the time to assess the current state of their communication practice, their organization and their people, so they have a better sense of how to target messages and use their resources well.

Conducting a thorough audit of current communication effectiveness helps evaluate your current program, what’s working, and where a little more energy and attention is needed. Compared to companies with low communication effectiveness, organizations that are highly effective at communication are four times as likely to conduct audits of their communication practices to evaluate actual outcomes against stated goals — still, only 38% of them are doing so (Figure 12, page 16). We suspect a higher use of auditing and benchmarking would help more companies move their programs toward greater effectiveness.

A look at the environment and the audience is critically important at the start of a change initiative. Companies that are highly effective at change management assess culture and people as part of change planning, and use the findings as a framework for interpreting, prioritizing and acting on change initiatives.

Key questions during this exercise might include:

• Will your culture support or impede the change you want to see?

• Will the change also reshape the culture, and do you want this to happen?

• What do your critical employees need to think, say or do differently to make change successful? Do you have the tools to drive those changes?

• Are managers and leaders only talking change, or are they getting ready to walk the talk (i.e., be visible champions and frontline advocates with employees)?

The best do the hard work of understanding who is critical to a successful change, and how roles need to change during a specific period of time. They look at change impact by role, and determine how to best support talent and mitigate risk. Their plans and actions then build awareness and understanding, align training and system changes, and motivate action with each of the key stakeholders.

Figure 11. Effective organizations develop a clear vision of change and motivate employeesHow effective is your organization at the following?

Creating strong employee motivation for making organizational change

Developing a clear vision of desired organizational change

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Figure 10. Effective leaders are authentic, accessible and transparentLeaders at my organization are:

Creating a dialogue with employees

Transparent in messages to employees

Accessible and responsive to employee ideas or questions

Authentic in delivery of messages

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Figure 13. Effective organizations create an integrated change and communication strategy To what extent do you agree with each of the following statements about your organization?

My organization has a documented corporatecommunication strategy in place

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My organization is effective at creating an integrated communication and change management strategy



Audit of communication practices to evaluate actual outcomes against stated goals

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Understanding the potential impact of anticipated changes on people3838

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Figure 12. Effective companies assess the current state of their communication programsHow effective is your organization at the following?

Assessing organizational culture and readiness for change

Overall

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“Whether it’s for internal communication or a change initiative, highly effective organizations create a plan before they move forward.”

Create a Plan and Set Your Direction

Whether it’s for internal communication or a change initiative, highly effective organizations create a plan before they move forward. Overall, we see that less than half (47%) of all participants report having a corporate communication strategy in place (Figure 13).

The numbers drop further when looking at those organizations that create an integrated change and communication strategy ahead of a change initiative. Roughly three-quarters (72%) of organizations highly effective at change management take this important first step, versus only 15% of companies with low effectiveness. When misalignment between communication and change management occurs, people can be left wondering why the change is taking place and feeling frustrated about repeated requests for actions they don’t understand.



Figure 14. Effective companies measure and benchmark their communicationinitiativesTo what extent do you agree with each of the following statements?

Bar title 8

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The organization benchmarks the performance of the communicationfunction against other companies

Measure Progress Along the Way

Measurement is a critical tool to determine direction, refine efforts along the way and assess whether you’ve reached your goal. In addition, rigorous measurement helps build the business case required to gain additional resources or initiatives, and provides the data to confirm that you are using resources wisely.

This year’s study found that 60% of participating companies are using the same number of metrics as last year. Only about four in 10 use measurement findings in planning future communication initiatives and making business decisions, and even fewer benchmark their work against that of other organizations. Companies with highly effective communication are three times as likely as low- effectiveness companies to take this important step (Figure 14).

Equally important as evaluating progress is sharing that information with the rest of the organization. Surprisingly, many organizations have no formal process for reporting the outcomes of their communication measurement (Figure 15). Firms with highly effective communication are more likely to have a formal process, but there is plenty of room for improvement.

These findings suggest a lack of confidence. Why don’t more organizations measure? It’s a question the communication profession has explored for years, and the progress in practical terms is disappointing. As communicators, we need to do a much better job of measuring our contribution to the business and communicating those results to leadership.

Figure 15. Effective organizations report outcomes to leadershipHow do you report the outcome of your communication measurement?

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Figure 16. Highly effective organizations measure against their goalsHow effective is your organization at the following?

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Measuring progress against goals established for change initiatives

De�ning clear, measurable goals for the impact of changes


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Among firms with effective change management, we find that measurement also plays a significant role. Across all participants, only 37% are measuring progress against their change goals (Figure 16). The highly effective change management organizations are six times as likely as low-effectiveness companies to have this practice in place.

We know measurement matters. But what do you measure? The best organizations measure objective outcomes, such as changes in employee behavior, including program participation rates or reporting safety concerns, as well as links to business metrics, revenue or sales growth (Figure 17).

Figure 17. Six methods and metrics to measure outcomesTo what extent do you use the following methods or metrics to determine the effectiveness of your internal communication efforts?

Employee awareness or understanding of a program or message via focus groups or surveys

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Employee behavior change (e.g., reporting safety concerns) as reported via focus groups or surveys

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Improved retention of critical talent

Financial measures (e.g., revenue growth, pro�tability)

Customer measures (e.g., sales growth)

Measuring the success of change initiatives

Measuring your way to success


“ Overall, only 38% of our participants report that their managers are effective at helping employees adapt to change.”

Managers Play a Critical Role in Creating Confidence

It’s not news that managers are key to effectively delivering messages and engaging employees. When leaders and managers convey confidence to employees, they build trust, which can help stoke employee engagement. In many ways, managers are the face of the organization for employees — translating mission, values and strategy into behavior and words.

The best companies recognize this connection and go beyond simply providing managers with information to pass along to employees. They prepare managers to move away from cascading corporate messages and toward sharing the

meaning of these messages with their team. This requires engaging with managers, listening to their reactions, supporting their personal change journeys and crafting content that can be delivered in a manager’s own voice.

Overall, only 38% of our participants report that their managers are effective at helping employees adapt to change. Training for managers is quite common, but relatively few organizations train them effectively to help employees through change. We find that, among all participants, 82% train managers to help employees adapt, but only 36% find that training effective (Figure 18). The data clearly show that highly effective companies are getting a better return on their investment in training than less effective firms.

Figure 18. Nearly all companies train managers, but is the training effective?How effective is the training your organization provides for managers in helping employees adapt to change?

Percentage that train

0% 20% 40% 60% 80% 100%

Low change effectiveness

High change effectiveness

Overall

1313

3535

6767

6363

3232

9292

36368282

Percentage of those that train that are effective

20 towerswatson.com

What do the best do to build community? First, they recognize that a shared experience and purpose is important to the business. They understand that building community requires an ongoing conversation. They do not shy away from connecting with employees, and they have the courage to address controversy.

CommunityBuilding a sense that employees and leaders are in it together — sharing both the challenges and rewards of working

The best organizations use a variety of media and are careful to remain consistent while localizing the message when necessary. They segment audiences to make sure tailored messages reach those who need to hear them, and they take care to nurture an inclusive culture. Again, in these efforts, managers and leaders play an important role.


Figure 19. Using social media for collaboration, sharing ideas, community and team buildingDo you use social media for collaborating or sharing new ideas? Is it effective?

Percentage of those that use it that �nd effectivePercentage that use it for this purpose



Overall

43433535

5353

5959

2828

6060

42428282

99

25252020

21211515

1111

45454040

62625252

4545

Do you use social media tools for community and team building? Is it effective?



Overall

38385151

5050

2323

5959

4141

0% 20% 40% 60% 80%

Creating Community With Social Media

By definition, social media enables social interaction. With social media technology, organizations extend existing social networks beyond face-to-face interaction and design segmentation. While social networks are ideally suited to building community within an organization, overall, just over half (51%) of our participants use it for this purpose, and only about one-third of those find it effective. Not surprisingly, among companies that are highly effective at communicating, we find a higher frequency of use and effectiveness (Figure 19).

Social media is also well suited to support collaboration, and here we find a similar trend across all organizations.

“We communicate to make sure our people know where we are going, why, and where they fit into the organization. Also, if communication is not upward, too, then you miss out on some really good ideas. An outfit that values real communication creates competitive advantage over those that don’t.”

Lee McIntireChairman and CEO

CH2M HILL

22 towerswatson.com

Twitter/Yammer

Podcasts

Employee journals or blogs

Video-sharing site

HR or other function journal

Collaboration sites

Enhanced online employee pro�les

Leadership journal or blog

Social networks

Instant messaging

5858

5050

4646

6363

5656

5151

4242

4242

6363

4848

Figure 21. Use of social media tools among companies that find it cost effective 0% 20% 40% 60% 80%

0% 20% 40% 60% 80%

Risk taking

Understanding how the employee's job contributes to the organization's success

Innovation

Supporting organizational change efforts

Sharing feedback with senior management

Community or team building

Collaborating or sharing new ideas

6161

7575

7676

5050

7171

7474

4242

7070

Figure 24. Topics for social media tools among companies that find itcost effective

0% 20% 40% 60% 80%

7676

7575

7474

7171

7070

6161

5050

Figure 22. Topics for social media tools among companies that find it cost effective

Risk taking

Understanding how the employee’s job contributes to the organization’s success

Innovation

Supporting organizational change efforts

Sharing feedback with senior management

Community or team building

Collaborating or sharing new ideas

Using social media effectively While two-thirds of respondents are more knowledgeable about using social media tools than they were a year ago, and 69% plan to increase their use over the next 12 months, only about one-quarter (28%) report that these tools are cost effective, and only 15% have related measurement tools in place. A larger share of our U.S. participants report that they know more about social media than they did a year ago and have a policy in place (Figure 20).

Companies with effective communication are more than two times as likely to report that they find social media cost effective. They also get more support from their CEO, and have a documented policy and effectiveness measures in place. We believe these findings are related. Having both a plan and measurement capability in place can help you build support among leadership and improve your overall success.

Organizations that report social media is cost effective are investing in new social media tools, especially instant messaging, social networks, and leadership journals and blogs (Figure 21). The companies that find social media cost effective use these tools to support collaboration or share new ideas; they also cultivate community or team building, and share feedback with senior management (Figure 22).

0% 20% 40% 60% 80% 100%

My organization has the tools in place to measure the effectiveness of our social media

In my experience, the use of social media tools for employee comunication has been cost effective at my organization

I am more knowledgeable about using social media tools than I was 12 months ago

My organization has a documented social media policy

7777

4545

4343

3737

3030

8686

6060

6464

6464

5151

2424

31312828

2424

1414

1313

2828

2424

1515

Figure 20. Effective communicators are more likely to find social media cost effectiveTo what extent do you agree with the following statements about your organization?

1919

0%

20%

40%

60%

80%

100%

Figure 22. Effective communicators are more likely to find social media cost effectiveTo what extent do you agree with the following statements about your organization?

454543433737

3030

77778686

60606464 6464

5151

242431312828

2424 2828

14141313

24241515

1919

My organization has the tools in place to measure the effectiveness of our social media

In my experience, the use of social media tools for employee comunication has been cost-effective at my organization

I am more knowledgeable about using social media tools than I was 12 months ago

My organization has a documented social media policy




Creating a Shared Experience

If you have a diverse organization, with several business units or geographic locations, how do you create a shared experience? If your organization includes acquisitions that still function on their own, how do you include them? What if you want to reach key talent with a message that is unique to their perspective?

Trying to balance organization-wide or global consistency with local or regional customization continues to be a focus for companies, as shown in Figure 23. Most organizations use a mix of centralized and decentralized communication, but we did not find a significant degree of message differentiation used by companies with either high or low communication effectiveness. In this finding, we see an opportunity for organizations to develop a deeper understanding of employees though micro-segmentation of their audiences. An

awareness of regional and divisional differences helps organizations create more relevant messages. In addition, maintaining a clear and shared sense of purpose across segments and regions creates globally consistent content and helps build community.

As mentioned earlier, an emerging trend is to customize the EVP and reward programs by employee segment as a way to ensure that resources are directed to talent critical to the success of the organization. Similarly, we find that most participants are targeting messages about pay, benefits and career development by job level and manager status (Figure 24). To deliver these targeted messages, most firms use one-way electronic media, such as e-mail or intranet pages. We believe there is much room for improvement in both targeting and choice of delivery vehicle for these messages.

0%

10%

20%

30%

40%

50%

All employees receive the samecommunication content, regardless of business unit or geography

1616

2929

2424

3232

2424

1212

2525 2424

4848

414141413737

9944

771212

333388

66

Figure 23. How organizations communicate about strategy, performance, vision and valuesHow are the messages from your headquarters about business strategy, performance or vision and values communicated to employees outside of your headquartered country?

Most communication is the same, regardless of business unitor geography

Some content is the same, some varies by business unit or geography

Most communicationcontent is different by business unit orgeography

All content varies by business unitor geography

17173131

4242

3333


“We see an opportunity for

organizations to develop

a deeper understanding

of employees through

micro-segmentation of

their audiences.”

Twitter/Yammer

Podcasts

Employee journals or blogs

Video-sharing site

HR or other function journal

Collaboration sites

Enhanced online employee pro�les

Leadership journal or blog

Social networks

Instant messaging

5858

5050

4646

6363

5656

5151

4242

4242

6363

4848

Figure 21. Use of social media tools among companies that find it cost effective 0% 20% 40% 60% 80%

Business unit Job level Managers

Top performers Tenure Age group

EVP 15% 19% 20% 14% 4% 3%Pay 24% 39% 36% 18% 5% 3%

Benefits 21% 32% 26% 12% 8% 7%

Personal health and wellness 16% 13% 12% 5% 5% 9%

Culture and values 19% 15% 19% 8% 5% 4%

Career development 20% 31% 32% 27% 4% 3%

Figure 24. Companies are targeting messages on pay, benefits and career development by job level and manager status

24 towerswatson.com

Involve Employees to Reach Your Change Goals

During a change initiative, it’s important to nurture support across your organization. Highly effective organizations are careful to build a sense of ownership and develop support among employees (Figure 25). Effective employee involvement shows up in successful implementation and improvement of a change initiative.

Less than half (47%) of companies use social media to support organizational change efforts. Among highly effective change management firms, that number grows to 54%. Understanding the impact of various media on building community can help the change and communication professional apply resources to the tools that will have the greatest impact. Overall High change effectiveness Low change effectiveness

Figure 25. Effective companies involve employees to reach change goalsHow effective is your organization at the following?

3535

66663232

2299

2525

8484

2020

44

68682828

2828

40403535

22

2323

36363939

55

2020

44443131

Developing support from enough employees forchange initiatives to succeed

0% 20% 40% 60% 80%

70701111

Creating a sense of ownership aboutorganizational change initiatives

61611010

2929Dealing with resistance to change initiatives

Around the globe, organizations are having trouble attracting top talent, especially high-potential and critical-skill employees. According to our 2011 – 2012 Talent Management and Rewards Study, most North American firms don’t tell employees that they have been identified as high-potential employees. Less than half of organizations identify critical-skill employees. A surprising majority of participants in this study (58%) report that they are not delivering targeted messages to

top performers. Among those who do, this usually takes the form of meetings with senior leadership or managers, or one-way electronic communication. By focusing on critical or high-performing talent as a key audience, change and communication professionals can partner with human resources and line management to develop targeted messages using effective media that are relevant to the people who drive their organizations toward greater success.

A missed opportunity


Leaders and Managers Play an Important Role in Creating Community

Most organizations aren’t fully leveraging managers and leaders to create community. As our organizations become increasingly diverse and complex, listening is more important than ever. Organizations are especially struggling with how to help managers listen to different points of view. Eighty-four percent of our respondents are training on this topic, but only 35% find the training effective. Among highly effective communicating firms, 55% find training on this topic effective (Figure 26).

Two-thirds of all participants report that they are using leadership visits to create a shared experience among employees, although most seem to be focused on business results. While business results are important, educating employees about the culture, integrating new employees, and seeking key

feedback about the company’s plans and progress also help build a sense of community. Senior leaders and managers are an ideal conduit to build understanding. However, our data demonstrate that most organizations (67%) rely on one-way electronic media to talk about the organization’s values. The companies most effective at communication are also using one-on-one discussions with senior leaders and managers, as well as interactive media.

Again, effective training can make a big difference in helping managers to authentically represent the company culture. A majority (82%) of organizations report training managers to support the organization’s vision and values through their actions, but only 43% find the training effective. Among highly effective communicators, more than half (65%) find it effective, but clearly there’s a great deal of room for improvement.

Figure 28. Training managers to listen is important, but only if it is effectiveHow effective is the training your organization provides for managers in listening carefully to different points of view?

0%

20%

40%

60%

80%

100%

Lowcommunicationeffectiveness

5555

91918484

3535

1111

7171

Highcommunicationeffectiveness

Overall

Percent who train Percent of those who train who are effective

0% 20% 40% 60% 80% 100%



Overall8484

9191

7171

2828

1111

5555

3535

Figure 26. Training managers to listen is important, but only if it is effectiveHow effective is the training your organization provides for managers in listening carefully to different points of view?

Percentage that train Percentage of those that train that are effective

Nearly half (48%) of our participants report they are using social media to allow employees to deliver feedback to senior management. Companies with highly effective communication are 1.5 times as likely to do this as companies with low-effectiveness scores (56% versus 38%) — and they are more likely to find it effective, too.

“Effective training can make a big difference in helping managers to authentically represent the company culture.”

Create a two-way conversation between leaders and employees

26 towerswatson.com

About the Participants

The 2011 – 2012 Change and Communication ROI Study looks at data collected in April and May 2011 from 604 organizations in various regions around the world.

20% Southeast Asia

20% Greater China

9% Other Asia Paci c

23% Europe and Middle East

7% Canada

21% United States

By region

20%

9%

20%

23%

21%

7%

11% Other

7% Energy and Utilities

7% General Services

9% IT and Telecomm

21% Financial Services

7% Wholesale and Retail

11% Health Care

6% Public Sector and Education

22% Manufacturing

By industry sector

11%

21%

9%

11%

22%

6%

7%

7%

7%

0% 20% 40% 60% 80%

Other

Divestiture

Merger

Offshoring or outsourcing

Reprioritizing bene�t spending

Pay freezes

New HRIS system

Acquisition

Reduction in staff/downsizing/layoffs

Changing corporate focus or direction

New performance management system

Reorganization6363

4848

3939

3737

3434

3030

2424

2020

1919

1515

1212

88

8

7

Figure 27. Organizations have experienced significant change in the last two yearsWhich, if any, of the following changes has your organization undergone in the last two years?

Overall

Participants experiencing change in last two years

0%

5%

10%

15%

20%

1111

1717

Number of changes in the last two years

1717

1919

1515

1919

22

43210 5 6 or more

6 or more

5

4

3

2

1

022

1919

1717

1111

1919

1515

1717


0% 20% 40% 60% 80%

Other

Divestiture

Merger

Offshoring or outsourcing

Reprioritizing bene�t spending

Pay freezes

New HRIS system

Acquisition

Reduction in staff/downsizing/layoffs

Changing corporate focus or direction

New performance management system

Reorganization6363

4848

3939

3737

3434

3030

2424

2020

1919

1515

1212

88

8

7

Figure 27. Organizations have experienced significant change in the last two yearsWhich, if any, of the following changes has your organization undergone in the last two years?

Overall


0%

5%

10%

15%

20%

1111

1717

Number of changes in the last two years

1717

1919

1515

1919

22

43210 5 6 or more

6 or more

5

4

3

2

1

022

1919

1717

1111

1919

1515

1717

The majority of participants in our study have experienced significant change over the last two years. Our typical participant experienced at least three of the changes listed in Figure 27.

Clarity, confidence and community: The most effective change and communication organizations do the hard work of creating clear, relevant and measurable programs that drive results and create a sense of shared purpose. They understand and support the role of the manager. They also deploy media that work for their culture and understand that control of the message is less effective than equipping a manager to deliver meaning.

The 2011 – 2012 Change and Communication ROI Study shows us the relevance of traditional practices — including clear plans and good measurement — as well as the impact of new approaches. The best aren’t afraid of change. They use a disciplined approach, do the research to understand their audiences and use media that work — even if the tools are new to them.

Perhaps most important, the best practitioners of communication and change recognize that the demands and pace of change in business don’t always (or even often) coincide with the needs and capacity for change of

employees. The best business leaders know this. They understand the benefit of hearing the perspective and counsel of communication and change professionals — of being not only informed of employees’ readiness for change and capacity for training but also educated in the nuances of message, media and manager support that mark successful change efforts.

As we noted in the introduction, internal change managers and communicators are like guides on a white-water river. New technology and techniques can aid in the effort to shoot the rapids. But at the core, the best guides have mastered the art of reading human behavior and the skill of judging the best moves to make when the water is roughest.

Towers Watson began this series of studies in 2003, and we remain impressed with the innovative approaches of the most effective companies and strong advocates of those that continue striving to deliver more.

Conclusion

Copyright © 2011 Towers Watson. All rights reserved.TW-NA-2011-19860

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About Towers WatsonTowers Watson is a leading global professional services company that helps organizations improve performance through effective people, risk and financial management. With 14,000 associates around the world, we offer solutions in the areas of employee benefits, talent management, rewards, and risk and capital management.