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Communication policy essential for the growing SMEThis 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.BackgroundOne 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 systemWhat 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; Formal/ informal;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 mixCaution 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.ChannelWhat can it do to improve communication/ decision making?When should it be introduced into company communication planning?FormalEmployee suggestion schemeVital for improving enterprise performance – the most cost effective communication toolAs soon as possible via SOPCustomer satisfaction surveyVital for improving quality of product/ service offering, and new product/ new service developmentAs soon as possible via SOP Corporate governanceEstablishes formal rules for availability of information to wide range of stakeholdersStage by stage introduction from early growth phase of company – financials and action plan crucial initial first steps. Must be accompanied by good time management TWPBusiness planInforms all stakeholders of where the enterprise has been and sets clear goals for the futureAs soon as possible – publish edited highlights where necessaryAnnual reportCan provide clear information about company performance and future directionEssential for legal purposes; can be improved into powerful communication toolReview meetingsCrucial to integrate key staff into operational and strategic developments of enterpriseStage by stage introduction. Must be accompanied by action planning and good time management TWPPlanning meetings key suppliers/ customersImproves understanding of suppliers/ customer requirements, improves integration with company operationsKey customers and suppliers should be linked in as sales/ orders reach significant levelsDocument storage for wide availabilityEnables all staff to access information and standard operating proceduresAs soon as possible via company Intranet system – also create a magazine/ book/ manual/ SOP hard copy storage point (not necessarily a library)Web siteHas multiple functions. Serves as on-line brochure, and can be rapidly updated. Provides e-commerce platform which provides service information for both suppliers and customersAs soon as possible, provided responsibility is defined for management and regular updatingNoticeboardProvides reference site for regulatory notices; social events; company progressAs soon as possible – but responsibility must be assigned for upkeepNewsletterProvides stakeholders/ potential stakeholders with continuing informationDepends on company circumstancesGeneral meetingsDifficult to manage as a communication channel – better to deal in small groupsOnly essential when major change has to be announcedEmployment contract/ code of conduct/job descriptionProvides employees with clear information of what is expected of themLegal requirement - good practice to make as clear and detailed as possibleEmployee manualProvides detailed information on operating procedures in form of collection of SOP materialShould be part of induction trainingDisciplinary and grievance codeProvides clear information on how the enterprise will manage employee problems – creates reporting system in tandemShould be introduced early and be accompanied by SOPCustomer complaint systemProvides key communication on customer perceptions of company and when properly handled can be positive sales toolAs soon as possiblePublic relationsProvides company with low cost route to maintain contact with market when properly structured and managedWhen 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 TWPCareful introduction and management to ensure effectiveness, and regular reviewPromotional expenditurePart of the communication mixWhen necessaryFormal/ informalCanteen/ coffee roomEnables all staff to meet in environment conducive to discussionConsider when possiblePremises designResearch suggests that involving staff in premises design can create environment that stimulates communicationConsider when possibleTeam workEnables staff to develop links within enterprise while completing a specific taskAs soon as possibleQuality circlesProvides formal platform for informal discussions about company performanceLink with quality assurance programme including ISOAppraisalPermits 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 basisJob design/ rotationIdeal for improving understanding and links within the organisationWorth thinking about regularlyMotivation designCan link with appraisal in providing individual solutions to job satisfaction – ideal communication channelWorth thinking about regularlyCompensation designBonus systems linked to group performance can certainly influence communicationWorth thinking about regularlyInduction trainingProvides ideal platform for creating informal links within organisationVital at early stageMaintenance trainingProvides means of developing team cohesion if provided in-house with case study/ project contentNeeds to be part of developing company programmeDevelopment trainingProvides means of developing team cohesion if provided in-house with case study/ project contentNeeds to be part of developing company programmeInformalManagement by walking aboutVery good communication channel providing that management style is appropriateIndividual decisionFace to face discussionsIdeal communication channel is management style is appropriateIndividual decisionSocial gatheringsNormally poor communication channelHandle with care