Wednesday, June 16, 2010

Which Audience Is Most Important: Internal or External?

In any kind of business or organizational crisis, internal communication is often more important than external, or at least as important.

Whether you’re BP, Toyota, Apple or a small mom-and-pop business, you will not only lose the battle, but the war, if you don’t keep your employees, partners, and their families informed and reassured.

Under normal operating conditions, effective internal communication leads to better and more productive and supportive employees. In a crisis, it is even more important to keep employee spirits up and maintain employee confidence and support. Otherwise, management mistrust takes over and when employees do not trust their bosses, productivity suffers, and productivity impacts the bottom line.

I can give you two examples – at the extreme – of size and potential damage.

An international manufacturing company that does business in Europe, North America and elsewhere, was faced with an unfounded attack on one of its consumer products. The public media was told the allegation was not true, but the story persisted and critics took to the Internet.

With thousands of employees around the world, the company wisely met the issue head-on in its plants, distribution centers and offices and explained the facts and the misperception that was being spread. The employees believed their management and conveyed that to their own families, and in a couple of weeks, the issue disappeared.

At the other end of the spectrum, a client with fewer than 200 employees and contracts with several federal government agencies. An employee was fired for cause, and set out to get even by filing federal whistle blower complaints. After many of the complaints were dismissed, the ex-employee finally found a government lawyer with his own agenda.

The company faced a multi-million dollar settlement and we were called in to help management get ready for the media coverage. Our advice was the media would probably not pay much attention, but employees would panic when they heard about the settlement and fear for their jobs.

The owner rejected our initial recommendation to concentrate on reassuring employees that the company was sound and the settlement, although over the top, would not slow the company’s growth and success. The owner said, that was none of his employee’s business!

We prevailed, however, and when the settlement was made public, we had employee meetings scheduled and appropriate explanations ready and talking points for a private meeting with the company’s banks and lenders. When each meeting was done, the employees and bankers said, “okay” and work resumed, business continued to grow and the media paid almost no attention at all. It was a one-day business page story in a couple of local newspapers

Internal communications is all about creating and maintaining a trusting relationship. It is as much about what you say, as how you say it and when. If you wait for your employees to hear about your bad news from someone outside the organization, it will come back to haunt you.

If you don’t communicate quickly and effectively in a crisis, employees will lose their trust in you and the entire organization will suffer.

This is just as important in today’s environment of “downsizing” and “right-sizing” and all the other euphemisms for lay-offs. When you lose a customer, it impacts your bottom line, but you can go after another customer.

When you lose an employee because of a lay-off, you not only lose a person that will not be replaced, but you will send shock-waves through the remaining employees, who will begin to fear they will be next and/or resent the fact they will have to work harder to make up for the person or persons who have been thrown out like dirty dish water.

Internal communication before, during and after a lay-off will determine the future of the organization and whether it will prosper again, or not.

1 comment:

  1. Good post, Larry. In this era of insta-communications and social media the lines between internal and external communications are obliterated. In fact, there is no more internal/external communications...but search engines do make all communications eternal. Carefully orchestrated launches of consistent communications are key.