consulting blog post

Lessons learned from businesses that underperformed against competitors and delivered low total shareholder return.

How to fail at communication and change management

Reading this post could make you 3.5x more likely to outperform your competitors.

According to benchmarking research from Towers Watson, organizations with high effectiveness in change management and communication are three and a half times more likely to significantly outperform their industry peers.

The same research found companies with the most effective employee communication programs delivered a 91% total return to shareholders (RTS), compared with 62% for firms that communicate less effectively. A significant improvement in communication effectiveness is in correlation with a nearly 16% increase in market value.

Great, but what does any of that have to do with this blog post?

The unfortunate truth is most large organizations struggle with internal communication. Many underperform or even fail as a result. A survey of 400 companies found miscommunication causes a staggering average loss of $62.4 million USD per company each year.

This series of posts picks apart some of the most spectacular communication failures we’ve experienced in our work, and shows you real-world solutions you can put to work in your organizations to eliminate:

  • Lost time to market
  • Inefficient work with no transparency or accountability
  • Stalled or stopped business due to exhausting time and resources
  • Sloth-like response to needs

How to achieve high effectiveness in change management and communication

Most businesses and their employees understand the importance of interdepartmental communication—it’s easy to make a case for why they should invest resources in creating effective and efficient processes.

The tricky part is how. Three processes are central to creating a framework through which companies achieving high effectiveness in communication and change management:

  1. Create a system that streamlines communication between departments.
  2. Standardize the necessary touch points between departments to allow easy project tracking and accountability.
  3. Ensure employees understand how their work fits within and impacts the entire organization.

Using this three-part framework, you can achieve the clear, efficient and highly effective communication that differentiates market leaders.

Step 1: Create a system that streamlines communication between departments.

Case Study: Artificial Intelligence Can’t Solve Every Problem

Case Study: Artificial Intelligence can't solve every problem

Time is money, so there has been an increasing trend in automation within internal communications. In this case, a leading retailer found themselves without enough resources to respond to inquiries from their stores (mostly out of stock inquiries).

This retailer received millions of inquiries from stores to the head office.

There simply weren’t enough people to manage that kind of volume, and the team responsible for responding to help desk tickets wasn’t allowed to expand.

Their solution?

The team’s management implemented Artificial Intelligence (AI) software that would scan incoming emails for a set of keywords chosen to identify the most important messages, and would delete the rest. The AI software was so “effective” that it eliminated approximately 80% of incoming emails.

Problem solved, right? Not exactly.

After a few months, there were more emails than before the software implementation. Undeterred by the AI program deleting their messages, stores would send a second email if they didn’t get an answer to their original query. More emails were generated, and more were deleted.

Frustrated employees at the stores looked for ways to get around the system. Their solution? Find a phone number at the home office and call.

The missing link

Effective communication is about employee trust, relationship building, providing clarity and collaboration within the organization. The implementation of the AI software failed to address these factors.

The first step to streamlining communications in this organization was to align each department’s idea of success. It turns out in all their zeal for reducing the number of help desk tickets they were creating nobody thought to ask why the stores were generating so many inquiries.

For the stores, success meant getting their questions answered in a timely fashion. The easiest way for them to go about that was to hit send until they got a response. The department in the head office’s idea of success was reducing the number of help desk tickets it received. By understanding this disconnect, we could recommend prioritizing stores questions and concerns and create a system that worked for everyone.

The new system worked because it measured and impacted all parties’ ideas of success. Making the stores and their concerns a priority meant that the company was no longer leaning on AI systems to do the guesswork and hone in on the inquiries that mattered. This dramatically cut down on the number of tickets generated, improving the organization’s success metrics.

Gain the competitive advantage of being 3.5X more likely to significantly outperform your industry peers, with the bonus of more harmonious department relations.

Ever found yourself frustrated because of ineffective communication processes? Share your experience by leaving a comment below!

And, stay tuned for Part 2 & Part 3, where we’ll share more real life business failures and solutions – plus, in the last post, tips for keeping your business from making the same mistakes!