The real value of communication

Headline findings from the 2005/2006 Communication ROI Study from employee benefits and HR consulting firm WatsonWyatt:

  • Companies that communicate effectively have a 19.4 percent higher market premium than companies that do not.
  • Shareholder returns for organizations with the most effective communication were over 57 percent higher over the last five years (2000-2004) than were returns for firms with less effective communication.
  • The 2005/2006 study found evidence that communication effectiveness is a leading indicator of financial performance.
  • Firms that communicate effectively are 4.5 times more likely to report high levels of employee engagement versus firms that communicate less effectively.
  • Companies that are highly effective communicators are 20 percent more likely to report lower turnover rates than their peers.

WatsonWyatt Wordwide | Effective Communication: A Leading Indicator of Financial Performance – 2005/2006 Communication ROI Studyâ„¢

Neville Hobson

Social Strategist, Communicator, Writer, and Podcaster with a curiosity for tech and how people use it. Believer in an Internet for everyone. Early adopter (and leaver) and experimenter with social media. Occasional test pilot of shiny new objects. Avid tea drinker.

  1. Marcel de Ruiter

    Hi Neville,

    I guess that any reader of this post, especially outside the communication business, would be very interested in the Report’s definition of “effective” and “less effective” communication. Would you know?

    Best regards,

  2. neville

    Marcel, as good a definition as any comes from Towers Perrin:

    • Open and honest exchanges of information
    • Clear, easy-to-understand materials
    • Timely distributions
    • Trusted sources
    • Two-way feedback systems
    • Clear demonstrations of senior leadership’s interest in employees
    • Continual improvements in communication
    • Consistent messaging across sources
  3. Robert Cenek

    The Watson Wyatt survey findings really validate the notion that high performing organizations derive their results through a highly competent leadership cadre.

    Strong leaders obtain the very highest contribution from their people by being engaged with their workforce, by being accessible, and through regular communication that translates the company’s vision, mission and strategy in a meaningful way that elicits worker commitment and discretionary work effort.

    Robert Cenek
    Cenek Company
    A fad-free weblog
    Trends and Research in the World of Work

  4. Farms

    One comment to add is that companies often translate this to mean that as long as they communicate “out” they will achieve a fully engaged workforce. Oh dear how wrong can they be! I prefer to think of it as creating a dialogue….I am sure that the companies cited do 5 things well
    1) They tailor their messages to ensure that it is relevant to each audience. They then check it has been undertstood.
    2) They keep to a core message and the message does not change in the short term.
    3) Communciation skills are worked upon in the management and leadership teams.
    4) They understand that the words are not the key…it is the actions they take in relation to their message that speak volumes.
    5) It is a continuing DIALOGUE….i.e the corporation has developed listening skills. So often I see people “inform” a lot of facts but they do not create dialogue by encouraging feedback and forums which allows discussion.

    Just my thoughts!

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