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Barriers to effective planning

Communication policy essential for the growing SME

This is a summary of a talk given by Martin Kuhne of Ibis Associates in Bremen to an audience of small business advisors in September 2004.


One of the most serious barriers that a growing company faces is to resolve the problem of information flow – upwards, downwards, and sideways which is often grandly termed communication. This problem can cut in at a very early stage – Ibis staff have personal experience of dangerously limited communication in an enterprise of six individuals! As the effectiveness of communication declines, staff (and other stakeholders) become:

Less clear about what is expected of them;
Less sure about exactly what is going on throughout the company;
More suspicious of motives and less willing to accept change;
Poorer quality decision makers;
More likely to become departmentally rather than company minded with an emphasis on NIH (Not invented here);
More inward looking and more task orientated.

The combination of these factors means that policy implementation and task completion slows – or in the worst cases stops, labour turnover, absenteeism, disciplinary problems go up, productivity goes down.

Research suggests that most supervisory staff and management have a clear, but limited view of communication. This is to tell stakeholders what they (that is supervisors/ managers) want them to hear – and not to create a series of functional two way channels which improve reactivity within the enterprise, lead to much better decision making, and create enhanced shared values for all stakeholders. There is no single magic component – managers cannot wave a wand and say “let there be communication” - because a business is made up of a complex interaction of individuals both within and outside the enterprise, there are many communication channels, and effective communication will comprise their interaction. As with all Ibis suggestions, we see the creation of this improved communication system as incremental – companies can steadily introduce more and more components, ensure that they work, and then move on to others.

Some pointers to improved communication

All research shows that stakeholders like to be informed – they may not take in the information, but respond with trust to the enterprise that is trusting them with the information. A useful analogy is with Freedom of Information legislation – think about making communication inclusive rather than exclusive.
Individuals are very poor at separating wheat from chaff in information, which leads to information overload for some – unless the system is properly planned.
Individuals differ in the way that they take in information – some require voice (and individual contact), others require image while others prefer print.
The broader the range of communication channels, the better the overall information that individuals within the enterprise will receive.
Libraries have not evolved in the way they work by accident. Most of have an idea that relevant information existed and go looking for it. Make sure that the information is available in an organised and accessible way – a key feature of an effective management information system.
Few individuals take in all information at one presentation. The analogy to advertising messages is also relevant to information – each individual will require a minimum of messages to receive the underlying information.
Advertising has another lesson for communication – make sure that everything that is communicated is legal, decent and honest. You can sell anything once – to employees and other stakeholders – but once you have done this wrongly – your communication system will never be trusted again.
Commitment from the top, like all others aspects of company management is essential. Employees will become rapidly aware if senior management words are not linked to their deeds.

Changing from a disorganised to organised communication system

What must be accepted by the growing organisation is that the informal system of talking to colleagues across the table in the shared office will no longer work as more and more employees join the enterprise and the number of external stakeholders increase. Certain researchers refer to this as the “platform” - we see it as a steady movement away from resolving structural problems towards operational concerns.

Exactly when this will happen will vary, but it is clear that once the organisation passes beyond the point where the team leaders can maintain informal contact with all individuals on a daily basis, the enterprise needs to increasingly rely on a mixture of three different types of channel:

Formal/ informal;

Let us take one example of each to clarify the distinction between the three. Strictly formal methods of communication would include a company newsletter which would provide clearly defined information to employees and possibly other stakeholders as well. Formal/ informal methods are those where the company establishes a formal framework within which informal communication can occur. A classic example is the creation of a company canteen/ coffee area which is designed to provide a relaxing atmosphere – in which discussions are encouraged. Truly informal communication would include techniques such as management by walking about.

It is the Ibis experience that the majority of emphasis in the development of the communication policy should concentrate on formal and formal/ informal techniques. It is very difficult to change specific management styles or attitudes – some individuals can naturally handle management by walking about – others cannot – so any attempt to legislate for this will be doomed to failure, and be counter-productive.

Three elements are important to summarise the main options for improving communication: what is the channel, what can it do to improve communication/ decision making, and how rapidly it should be introduced into the growing company. The components are shown in table form below. Many of these elements are either part of or comprise an entire standard operating procedure of the 68 that Ibis currently have available.

The need to closely manage many parts of the communication mix

Caution is required during the implementation of a communication policy. Many companies find that an increasing amount of time and energy is sucked up in what can be termed “communication” but is in reality large quantities of hot air. This is a specific problem in certain communication channels which are marked in the chart as TWP – Time Wasting Potential. All of us have encountered individuals who believe that because they have had a meeting they have achieved something – the communication channel becoming an end in itself, rather than as a means to some practical activity. In each of these high risk areas the enterprise should create a clear policy which organises the system

effectively. Small changes can have very significant effects in improving overall operational effectiveness. For example, organising the timing and flow of telephone, e-mail, fax, and letters can dramatically improve productivity. One Ibis client analysed productivity through the classic mechanism of an activity diary, and found that only 45% of management time could be considered “productive”. By a series of simple changes, productivity rose within two months to 70% without any reduction in client or supplier contact – in fact, customer satisfaction surveys showed both of these to have improved.

How does Ibis improve your communication policy?

Most of the opportunities that the enterprise has to improve communications in formal and formal/ informal contexts are covered by the Ibis SOP programme. In that accompanying chart, where these are available are highlighted in black. What this means is that the Ibis monitoring programme will automatically build in improved communications policies as part of the overall development of the organisation.

What can it do to improve communication/ decision making?
When should it be introduced into company communication planning?

Employee suggestion scheme
Vital for improving enterprise performance – the most cost effective communication tool
As soon as possible via SOP
Customer satisfaction survey
Vital for improving quality of product/ service offering, and new product/ new service development
As soon as possible via SOP
Corporate governance
Establishes formal rules for availability of information to wide range of stakeholders
Stage by stage introduction from early growth phase of company – financials and action plan crucial initial first steps. Must be accompanied by good time management TWP
Business plan
Informs all stakeholders of where the enterprise has been and sets clear goals for the future
As soon as possible – publish edited highlights where necessary
Annual report
Can provide clear information about company performance and future direction
Essential for legal purposes; can be improved into powerful communication tool
Review meetings
Crucial to integrate key staff into operational and strategic developments of enterprise
Stage by stage introduction. Must be accompanied by action planning and good time management TWP
Planning meetings key suppliers/ customers
Improves understanding of suppliers/ customer requirements, improves integration with company operations
Key customers and suppliers should be linked in as sales/ orders reach significant levels
Document storage for wide availability
Enables all staff to access information and standard operating procedures
As soon as possible via company Intranet system – also create a magazine/ book/ manual/ SOP hard copy storage point (not necessarily a library)
Web site
Has multiple functions. Serves as on-line brochure, and can be rapidly updated. Provides e-commerce platform which provides service information for both suppliers and customers
As soon as possible, provided responsibility is defined for management and regular updating
Provides reference site for regulatory notices; social events; company progress
As soon as possible – but responsibility must be assigned for upkeep
Provides stakeholders/ potential stakeholders with continuing information
Depends on company circumstances
General meetings
Difficult to manage as a communication channel – better to deal in small groups
Only essential when major change has to be announced
Employment contract/ code of conduct/job description
Provides employees with clear information of what is expected of them
Legal requirement - good practice to make as clear and detailed as possible
Employee manual
Provides detailed information on operating procedures in form of collection of SOP material
Should be part of induction training
Disciplinary and grievance code
Provides clear information on how the enterprise will manage employee problems – creates reporting system in tandem
Should be introduced early and be accompanied by SOP
Customer complaint system
Provides key communication on customer perceptions of company and when properly handled can be positive sales tool
As soon as possible
Public relations
Provides company with low cost route to maintain contact with market when properly structured and managed
When company has reached platform
Formal communication – email, letter, telephone, fax
Needs specific policy to ensure that communication rather than time wasting element is maximised considerable potential for TWP
Careful introduction and management to ensure effectiveness, and regular review
Promotional expenditure
Part of the communication mix
When necessary
Formal/ informal

Canteen/ coffee room
Enables all staff to meet in environment conducive to discussion
Consider when possible
Premises design
Research suggests that involving staff in premises design can create environment that stimulates communication
Consider when possible
Team work
Enables staff to develop links within enterprise while completing a specific task
As soon as possible
Quality circles
Provides formal platform for informal discussions about company performance
Link with quality assurance programme including ISO
Permits two way information on employee perception of enterprise and enterprise view of employee (360o)
Starts within first year of enterprise and is programmed on regular basis
Job design/ rotation
Ideal for improving understanding and links within the organisation
Worth thinking about regularly
Motivation design
Can link with appraisal in providing individual solutions to job satisfaction – ideal communication channel
Worth thinking about regularly
Compensation design
Bonus systems linked to group performance can certainly influence communication
Worth thinking about regularly
Induction training
Provides ideal platform for creating informal links within organisation
Vital at early stage
Maintenance training
Provides means of developing team cohesion if provided in-house with case study/ project content
Needs to be part of developing company programme
Development training
Provides means of developing team cohesion if provided in-house with case study/ project content
Needs to be part of developing company programme

Management by walking about
Very good communication channel providing that management style is appropriate
Individual decision
Face to face discussions
Ideal communication channel is management style is appropriate
Individual decision
Social gatherings
Normally poor communication channel
Handle with care

About the Author

The business planning group Ibis Associates has this and many other articles listed on its web site




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