Connecting organisational communication to financial performance

Connecting organisational communication to financial performance - 2003/2004 communication ROI Study

1. Introduction

The better you communicate, the better your return on investment (ROI). The fact is that organizations that communicate effectively dramatically outpace organizations that don’t.

2. Key findings

# A significant improvement in communication effectiveness is associated with a 29.5 percent increase in market value.

# Companies with the highest levels of effective communication experienced a 26 percent total return to shareholders from 1998 to 2002, compared to a –15 percent return experienced by firms that communicate least effectively.

# Organizations that communicate effectively were more likely to report employee turnover rates below or significantly below those of their industry peers.

3. How is effective communication a key driver of superior performance?

It comes down to connections:

# Employees feel connected to the business and understand how their actions can support it.

# New employees exhibit solid connections to the company culture — starting from their initial days on the job.

# Communication quickly connects employees to changing business challenges, facilitating faster adjustments to fluctuating market conditions.

# Management effectively connects with employees through strong leadership during organizational change.

4. Communicate effectively to drive business performance

# Build a strong foundation of formal communication structure and processes, which rely on employee feedback and use technology to connect with employees effectively

# Deal directly with the strategic issues of change, continuous improvement and business strategy integration and alignment

# Creat real employee behavioral change by driving change in managers’ and supervisors’ behavior and by creating a line of sight between employees and customers

BOTTOM LINE: Communication is no longer a "soft" function. It drives business performance and is a key contributor to organizational success.