Internal affairs

Using communication capital to reconstruct the results chain of internal messages


Many of the existing studies on internal communication focus on performance issues. This is natural, since internal communication, like other communication investments, is expected to yield positive results.

(Photo by Hush Naidoo on Unsplash)

Despite this concern, little agreement exists among scholars and professionals regarding how internal communication performance should be conceived and assessed. Existing studies propose some valid empirical measures, but lack a comprehensive understanding of internal communication performance as a whole.

Beyond metrics

First of all, we need to take into consideration that measurement is a double-sided coin: it has a ‘hard side’, which includes metrics and key performance indicators (KPIs), reliable and valid procedures, dashboards and results value chains; and it has a ‘soft side’, dealing with performance expectations, organisational measurement culture and performance stories. Beyond the selection of proper metrics, it is important to argue that the success of every measurement process depends also on contextual and situational elements. For instance, every performance requires a comparison of what was expected by top management and what was achieved.

Managing expectations about results is a core task for internal communication managers, for instance through the identification of benchmarks with other programmes, the reconstruction of past performances or consultation with stakeholders on what would be reasonable achievements. Every organisation has a different measurement culture. The internal communication manager would be conscious of that.

Which kind of measures are favoured by top management? How are results used? Does this organisation consider measurement as a punitive or an ameliorative process? Additionally, a good measurement process involves telling a credible performance story. There is a huge variety of ways to tell a performance story. The secret is presenting results and giving the evidences of them within a specific (rather than generic) organisational context.

Reconstruct the results chain

One of the most challenging task for a communication manager consists of reconstructing the so-called results chain, which represents the logical sequence of results that occur as consequences of internal communication activities. This article proposes to start from the construct of the Internal Communication Capital (ICC) to accomplish this task. Focusing on ICC helps us develop a practical comprehensive framework to measure the extent to which a company has achieved a satisfactory level of performance through internal communication.

Of course, communication capital is not a new concept. It has been studied for a long time as representing the whole value created by communication activities, both internal and external. It is conceived as an intangible asset, a lever for creating value which is recognised by business and for enhancing the competitive advantage of companies. Among dimensions and measures of communication capital, figure I offers some examples of metrics for conceptualising and measuring the dimensions of internal communication capital.

The dimensions of internal communication capital

Any internal communication activity can have an impact on more than one of the following four dimensions of internal communication capital: 1) relational, 2) human, 3) narrative and 4) organisational.

  1. It is often pointed out that the quality of relationships among employees, fostering morale and internal climate, plays a crucial role in enhancing psychological commitment and overall productivity. Relational capital represents the present value embedded in the firm’s set of employee relationships as well as a potential value, because it affects perceptions of a brand as an employer. So relational capital can potentially have an impact on the level of firm’s attractiveness towards new applicants. Many companies perform employee satisfaction surveys to analyse perceptions about work environment, job design and style of management. It is always important to compare the results of these surveys across different years in order to see if internal communication initiative s have been effective and to set programmes for the future. This kind of capital includes the internal culture and values which influence the way of doing work and of cultivating relationships with external stakeholders, such as clients.
  2. Human capital concerns communicative skills, abilities and competencies developed through appropriate training by an employee. The development of human capital is interwined with the relational capital and the collective development of knowledge. But even if they can be conceptually thought of as joint-products, they would be separately measured. For instance, in 1984 Rebecca Rubin and Matthew Martin created the Interpersonal Communication Competence Scale (ICCS) which measures a person’s ability to manage interpersonal relationships in communication settings, such as during internal meetings or sales negotiations. Another interesting measure is the level of employees’ abilities to maintain and cultivate relationships, such as the ability to interact with one another in an optimistic, cheerful and supportive manner while avoiding criticism. Human capital also includes measures based on past investment, for instance hours spent on training to develop communicative skills.
  3. Narrative capital deals with stories and conversations shared among employees which can be relevant for the business. Sometimes internal stories enhance the sense of belonging to organisation and employee engagement. To be relevant, stories should be based on past events as well as related to the present and they should represent a source of inspiration for the future of employees. This kind of capital is unique and authentic, and should be reflected in a distinctive and differentiated brand. For instance, a useful measure could be the gap between employee and external stakeholder perceptions about what the company is and what are its attributes.
  4. Organisational capital includes two main components: employee voice and communication network design. The more the internal communication initiatives stimulate workers to make their own suggestions for the decision making processes associated with the design of the production (such as online contests), the more the company will have greater opportunities to improve both efficiency and employee commitment. For instance, the number of suggestions and ideas taken into consideration to improve products or to modify processes is a crucial key performance indicator. For what concerns the other component, organisational capital includes the existing infrastructures/channels and practices to develop a stable network of communication among peers, employees and supervisors. To evaluate this component, measures such as the percentage of time spent with supervisor or with peers are used. If an intranet exists and it supports working processes, useful key performance indicators can be for instance time saved to do the job or to search work information.

Converting internal communication into money

Behavioural outcomes are the link between dimensions of internal communication capital and business performance. In fact, according to scientific studies, internal communication capital has six types of consequences that can affect business performance. Internal communication capital can enhance employees’ orientation to action, their overall problem-solving capabilities, the company’s orientation to innovation, the quality of products and services, the quality of working processes, the employee’s support during crises and, finally, employees’ own evaluations and perceptions about the company.

If a retailing company consults their employees individually or in groups about their views on the ordering process, organisational capital rises and affects the quality of order management. Consequentially, the company could verify if there has been a reduction in errors during the ordering process and calculate the money saved in a month or year.

Don’t neglect formative evaluation and predictive measures In recent years, many researchers have examined the business case for internal communication. In other words, whether the benefits (even financial) to the company can exceed or meet the costs of investment. The answer, as we have seen, is multifaceted, complex and situational. Internal communication capital can help communication managers reconstruct the results chain of every communication initiative in order to calculate a financial return (savings or earnings).

But the reconstruction of such a logical sequence of results should be tailor-made, adapted to the organisational measurement culture and to expectations expressed by the top management. We have seen that managing expectations and telling a credible performance story are further ingredients of an effective evaluation process.

Even if demonstrating the business value of internal communication is conceived as the ultimate goal, we should not forget that effective evaluation starts during the design and pretesting period of communication programmes. Formative evaluation is a valuable method of judging the worth of a programme while it is being formed as well as while it is running. Cost-effectiveness (cost of inputs/outcomes) and efficiency (cost of inputs/outputs) measures are crucial in the first steps of any internal communication activity. Also, the adequacy of a communication programme can be assessed through myriad standardised tests.

But what does the future hold? The answer is big data analytics. As Chris Foster, vice president of management consulting firm Booz Allen Hamilton, has argued: “Analytics will change communication by allowing us to move toward predictive modeling. The future is now.”

Stefania Romenti

Dr Stefania Romenti is assistant professor of corporate communication at IULM University, Milan, where she teaches public relations, and adjunct professor at IE Business School of Madrid where she teaches measuring intangibles and KPIs in communication. She is vice-director of the executive master in public relations at IULM University and academic referee of the Reputation Institute in Italy. Her research interests include communication measurement, reputation management and stakeholder engagement.