Russell-Oliver Brooklands, a former Corporate Brand Manager at Allied Dunbar, has devised a new way of working out how much communications cost a company. He maintains that cutting your communications budget will actually cost more in the long run.

For years, people have been trying to work out how to measure the commercial impact of internal comms. And with the economy struggling, and budgets under pressure, never could the arrival of a robust measurement tool be more timely.

This is important news, whether you work in-house, as a freelance or for an agency.

What’s measurable

Traditionally, people have tried to link internal comms to some kind of employee feel-good factor, connected in turn to productivity measures. But there’s something much easier to measure directly – the cost of employees’ time:

- time spent producing and receiving communications, and

- time spent delivering stakeholder value on the back of those communications.

We can measure how much of that time is being used productively, and how much is just going to waste. And if we’re smart about it, we can prove to the Finance Director (or anyone else that needs it proving) that cutting the internal comms budget will actually cost the business money. Loads of money. Here’s how.

Mainstream & ad-hoc

First of all, we need to divide the internal comms cake into two major pieces:

1. Mainstream communications - those worked on by internal communication professionals - major announcements, intranet comms, company magazines, Team Briefs etc. In short, those that directly involve the internal communication budget.

2. Ad-hoc comms - those one-off e-mails and meetings that anyone can produce or run. It’s clear when we look at the huge amount of people’s time spent generating and receiving these communications, that they’re almost certainly costing the business much more than the mainstream comms – many times over in fact.

And if the business cuts back on mainstream communications, what happens to those ad-hoc comms?

Firstly, history shows that cutbacks on ‘official’ channels of communication always result in the growth of unofficial ones: a mushrooming of the grapevine and the rumour-mill. And these can easily consume huge amounts of hitherto productive work time – far outweighing any savings.

But this is just the tip of the iceberg because, as the volume goes up, the quality goes down.

Knock-on effect

To understand why, we need to recognise that when someone sits down to write an ad-hoc email, or calls or attends an ad-hoc meeting, there are potentially four ‘intellectual foundations’ they can draw upon when deciding what to say:

1. Earlier ad-hoc communications

2. Mainstream communications

3. Externally acquired Information – things they might have read in the paper that morning, or learned earlier in their careers (eg during their professional training)

They can put these three together using…

4. Their creative thinking processes

Let’s assume a business is currently producing all the mainstream communications it needs – to the right standard. This would mean that cutting back on mainstream comms would undermine one of those ad-hoc foundations. So, through time, the quality of ad-hoc comms themselves couldn’t help but degenerate incrementally, together with the results they produce.

Communication failure

This is where the under investment really begins to hurt. After all, if a communication fails to produce its desired result it will need to be done again, thus increasing rather than reducing the overall communication cost.

Furthermore, if people aren’t receiving – accurately, and in a timely manner - all the information they need to do their jobs, chances are they’ll be making mistakes, and creating misunderstandings, which will need to be corrected. This can (and does) eat up huge amounts of time (not to mention customer good will).

And all the time that people spend producing and receiving grapevine communications, going through repeated mainstream comms, and correcting mistakes and misunderstandings, they’re not getting on with the day job. So opportunities to either save money, generate income, or add other stakeholder value are going begging.

Not surprisingly, all the wasted time, mistakes and uncertainty, tend to damage staff morale, which can mean lower productivity, and more people ‘throwing sickies’. It can also cause higher staff turnover, with the inevitable loss of skills, higher recruitment and training costs, and so on.

How to save money

In short, any knee-jerk reaction which cuts the internal comms budget is about as false an economy as it’s possible to make. Whether the Finance Director likes it or not, it will cost the business a fortune. If the senior management really want to save money – or to make more of it – far wiser to invest modestly in improving the quality of the mainstream communication practices. This may seem odd, but could it be true?

Do you, for example, have to work with people who sometimes struggle to brief you properly, or who move the goalposts, or start you off on a comms project only to cancel it half way through? Or do some communication approvals go round and round in circles? These are common issues facing most internal comms teams.

And they’re showing that there are direct savings to be made by bringing the mainstream process itself up to scratch. Better still, improving those mainstream ‘foundation’ comms can’t help but have a virtuous knock-on effect on the ad-hoc comms which follow. Thus you can turn those communication failure costs on their heads, and get the internal comms function recognised for what it really should be: the engine room of every profit centre in the business.

The Communication Value Calculator

This is all well and good in theory, but can we prove it? In a word “Yup”. There’s now a FREE web-based tool: the Communication Value Calculator - which you can use to work out the cost of wasted employee time – in hard cash terms.

You’ll find the Calculator at: www.internalcommunicationmodel.com/cib

This version of the Calculator is just the first of several, each of which will enable you to measure different aspects of the internal comms process. I’ve spent 18 months putting the whole thing together, with the help of four accountants.

So apart from being able to deliver credible, robust (and often mind-blowing) figures, this first version has loads of useful resources to help you construct a compelling commercial case. (If you work for an agency or as a freelance, it may be extremely productive for you to help your clients put this case together, or just point them in the right direction.)

Whether or not you’re suffering from the threat of budget cuts, you can use the Calculator to show the senior management that they may need to invest just a little bit more in internal comms, if they want the business to save serious money.

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