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Excellence Lecture Zurich 2005 © Prof.dr. Cees B.M. van Riel 11
Second Second MsComMsCom Excellence in Communications Lecture Excellence in Communications Lecture
CREATING ALIGNMENT IN MULTI-BUSINESS COMPANIES WITH
PROFESSIONAL EMPLOYEE COMMUNICATIONS
Prof.dr. Cees B.M. van RielRSM/Erasmus University Rotterdam, The Netherlands
Managing Director Reputation Institute
Zurich Financial Services/HarbourclubOctober 12, 2005
Excellence Lecture Zurich 2005 © Prof.dr. Cees B.M. van Riel 22
Table of Contents Table of Contents
1. The What and Why of Strategic Business Alignment (SBA)
2. Employee Communication as a vital tool to impact SBA
3. Measuring the impact of Employee Communication on SBA
4. Take aways
Excellence Lecture Zurich 2005 © Prof.dr. Cees B.M. van Riel 33
1 1 The What and How of Strategic Business Alignment (SBA)The What and How of Strategic Business Alignment (SBA)
Excellence Lecture Zurich 2005 © Prof.dr. Cees B.M. van Riel 44
The What and Why of Strategic Business AlignmentThe What and Why of Strategic Business Alignment
• Strategic Alignment means that all employees understand, buy into and are able to enact their organizations strategic objectives.
• Building Strategic Alignment is vital: Companies depend on employees to achieve strategic initiatives.
• Ultimately, strategic alignment leads to better organizational performance. Hence, organizations should create strategic alignment to facilitate their functioning.
Excellence Lecture Zurich 2005 © Prof.dr. Cees B.M. van Riel 55
TNT ExampleTNT Example
• Building SBA is vital because companies depend on their employees to achieve successes. TNT’s CEO Peter Bakker states that his job as CEO is primarily to build employee capabilities by having conversations with those people who can make the difference in the firm, asking questions as: – Do they understand and agree with TNT’s strategy?
– Have they been asked to contribute to the strategy?
– Have their opinions and support been sought?
– Have they been encouraged to contribute in an open and unthreatening way?
Excellence Lecture Zurich 2005 © Prof.dr. Cees B.M. van Riel 66
Key Question to Ask: Key Question to Ask: Do employees live up to the Strategic Initiatives of the Firm?Do employees live up to the Strategic Initiatives of the Firm?
The purple promise
“I will make every FedEx experience
outstanding”What should be done to make this
work?
Excellence Lecture Zurich 2005 © Prof.dr. Cees B.M. van Riel 77
Report Conference Board USAReport Conference Board USA
Various globally active firms forge alignment in many ways – by breaking down silos, integrating systems. coordinating business unit activities to achieve strategic initiatives. Strongly aligned companies have a shared vision of what they want to achieve and why.
Getting there requires the unwavering support of top management and the sustained commitment of every stakeholder to the change effort.
Companies can apply hard and soft-wiredinitiatives to create an aligned company. Replacing executives, variable pay, performance contracts, etc. are examples of ‘hard’ tools. Soft tools are leadership development, empowerment, internal communication and storytellingSoft-wired initiatives work best
Source: The Conference Board 2003
Excellence Lecture Zurich 2005 © Prof.dr. Cees B.M. van Riel 88
Strategic AlignmentStrategic Alignment
STRATEGIC ALIGNMENT:
Trends explaining the increased
attention for SBA
Excellence Lecture Zurich 2005 © Prof.dr. Cees B.M. van Riel 99
Dominant Global Trend: Creating Clarity about Ownership
Excellence Lecture Zurich 2005 © Prof.dr. Cees B.M. van Riel 1010
Increased tendency to endorse ALL business unitsIncreased tendency to endorse ALL business units
‘
Excellence Lecture Zurich 2005 © Prof.dr. Cees B.M. van Riel 1111
Same situation in Switzerland?Same situation in Switzerland?
Excellence Lecture Zurich 2005 © Prof.dr. Cees B.M. van Riel 1212
Aligned Company?
Excellence Lecture Zurich 2005 © Prof.dr. Cees B.M. van Riel 1313
Evolving from a group of companies...
Excellence Lecture Zurich 2005 © Prof.dr. Cees B.M. van Riel 1414
Towards ONE Aligned Company Towards ONE Aligned Company
Excellence Lecture Zurich 2005 © Prof.dr. Cees B.M. van Riel 1515
SBA can be strong or weak: SBA can be strong or weak: however if you have one name a minimal level of SBA is requiredhowever if you have one name a minimal level of SBA is required
Culture
Educations Youth
Relaxing
Sport Nature
Excellence Lecture Zurich 2005 © Prof.dr. Cees B.M. van Riel 1616
KantonalbankKantonalbank: ‘: ‘gemeinsamgemeinsam wachsenwachsen’’
Klik hier voor de film
Excellence Lecture Zurich 2005 © Prof.dr. Cees B.M. van Riel 1717
Creating Alignment: Practical Examples (1)Creating Alignment: Practical Examples (1)
• Daimler Chrysler– Unifying a German and US
conglomerate in automotive
Creating integrated services in mail, express and logistics with one brand name
Excellence Lecture Zurich 2005 © Prof.dr. Cees B.M. van Riel 1818
Creating Alignment: Practical Examples (2)Creating Alignment: Practical Examples (2)
– Promoting internal synergy to justify the external claim of providing products/services that supply “sense & simplicity”
– Re-building a collection of individual partner practices among one roof into an integrated company on a global scale
– Shifting from a collection of national representatives within an international network, into an integrated legal service provider serving major multinationals with integrated global practice groups
Excellence Lecture Zurich 2005 © Prof.dr. Cees B.M. van Riel 1919
SBA is stimulated by a mixture of specialistsSBA is stimulated by a mixture of specialists
• The variety of Change Methods applied by international firms are rooted in three disciplines:
• Human Resources
• Information Technology
• EMPLOYEE COMMUNICATION
Excellence Lecture Zurich 2005 © Prof.dr. Cees B.M. van Riel 2020
Five PreFive Pre--conditions to achieve SBAconditions to achieve SBA
Understanding Developing Capabilities
Awareness
Attitude
SupportiveBehavior
HRM IT
Excellence Lecture Zurich 2005 © Prof.dr. Cees B.M. van Riel 2121
Tools used by winning firms to create Strategic AlignmentTools used by winning firms to create Strategic Alignment
Awareness
Understanding
Awareness
Attitude
DevelopingCapabilities
Internal MediaIntranet, Town Hall MeetingsSymbols
Open book managementGlobal Life Audio Conference
Cascade TourChallenge & ConnectAccountability management
Knowledge Management Corporate Universities Group Decision Room
SupportiveBehavior
Excellence Lecture Zurich 2005 © Prof.dr. Cees B.M. van Riel 2222
2. Employee Communication as a vital tool to impact SBA
Excellence Lecture Zurich 2005 © Prof.dr. Cees B.M. van Riel 2323
Rules & DirectivesEfficiency
e.g., (Former) Governmental organizations, high risk
production/storage firms
Shared MeaningCreating commitment by
sense-making e.g., IBM,INVE, J&J, 3M
AccountabilityHigh output/profit
e.g., Consultancy, Accountancy, Law firms
Living Apart TogetherEmbracing ideology
e.g., Greenpeace, Amnesty
EC does not mean One Size fits allEC does not mean One Size fits all
Centralization Formalization
High
Low
External turbulence
Low High
Excellence Lecture Zurich 2005 © Prof.dr. Cees B.M. van Riel 2424
However, all paradigms in EC focus on 4 dimensionsHowever, all paradigms in EC focus on 4 dimensions
FlowFlow•Upward•Downward•Lateral
StructureStructure•Line•Parallel•Grapevine
ContentsContents•“Me-”•“We-”
ClimateClimate•Openness•Participation•Seriousness
Dimensions of EmployeeDimensions of EmployeeCommunicationCommunication
Employee Communication is the process through which organizations share information, build commitment, and manage change by a professional application of four dimensions of EC: structure, flow, contents and climate
© Van Riel, 2000
Definition of EC
Excellence Lecture Zurich 2005 © Prof.dr. Cees B.M. van Riel 2525
Structure of Employee Communication Structure of Employee Communication
• Condition sine qua non in EC: channels distributing information are necessary tools.
– Line channels to support upward and downward flow
• E.g., reports, memo’s, general meetings, meetings with direct manager
– Parallel channels are functional for cooperation and creating unity between the different departments and for lateral EC flow
• E.g., newsletters, brochures, intranet, phone, website, email, workgroups, lateral meetings, corporate university
– Grapevine channels are functional to create interpersonal trust, cooperative climate, and to enhance unity in the organization
• E.g., Company bar, restaurant, company organizations and non-work related activities
FlowFlow•Upward•Downward•Lateral
StructureStructure•Line•Parallel•Grapevine
ContentsContents•“Me-We”
ClimateClimate•Openness•Participation•Seriousness
EmployeeEmployeeCommunicationCommunication
Excellence Lecture Zurich 2005 © Prof.dr. Cees B.M. van Riel 2626
Which structure of Employee Communication will catalyze SBA best?
Excellence Lecture Zurich 2005 © Prof.dr. Cees B.M. van Riel 2727
First Corporate than CommunicationFirst Corporate than Communication
• Communication follows strategy and structure as…. “structure follows strategy” (Chandler, 1962)
• In other words: decision making about the desired structure for EC has to be a logical consequence of the nature of the organizational structure
Excellence Lecture Zurich 2005 © Prof.dr. Cees B.M. van Riel 2828
Organizational StructureOrganizational Structure
• Purpose of Organizational Structure:– to achieve more calculable and
predictable control over organizational members in order to enhance organizational performance
• Means to implement structure:– specialization: division of subtasks; grouping
people together in similar task groups
– centralization: the locus of control within a system
– formalization: standard procedures, rules and documentation aimed at controlling behavior
Excellence Lecture Zurich 2005 © Prof.dr. Cees B.M. van Riel 2929
As a consequence ….As a consequence ….
• Employee Communication is primarily communication between organizational members in the same area of specialization, being informed by and reporting to the person in charge of their unit about tasks they agreed to do based on their function description
Excellence Lecture Zurich 2005 © Prof.dr. Cees B.M. van Riel 3030
Structure of Employee Communication
Top Mgt Front line
Grape vine
Line Communication
Parallel Information
Excellence Lecture Zurich 2005 © Prof.dr. Cees B.M. van Riel 3131
INFORMATION FLOWWhat is most effective to stimulate alignment?
Excellence Lecture Zurich 2005 © Prof.dr. Cees B.M. van Riel 3232
Flow of Employee CommunicationFlow of Employee Communication
FlowFlow•Upward•Downward•Lateral
StructureStructure•Line•Parallel•Grapevine
ContentsContents•“Me-We”
ClimateClimate•Openness•Participation•Seriousness
EmployeeEmployeeCommunicationCommunication • H2: The upward, downward and
lateral EC should be judged as sufficient, trustworthy, actual, and useful
• Flow/structure of EC increases alignment with the organization because it provides the glue that keeps the constituent parts of the organization together by the exchange of information about the organization’s goals and the clarification of the roles individuals are supposed to have in the realization of these objectives
Excellence Lecture Zurich 2005 © Prof.dr. Cees B.M. van Riel 3333
Information Flow through the Line
Board
Top Management
Higher Management
Middle Management
Employees
1
23
4
5
Excellence Lecture Zurich 2005 © Prof.dr. Cees B.M. van Riel 3434
Information FlowInformation Flow
• Flow will be better if there is High Trust in Management resulting in:– more upward information ..– more favourable upward information …
• Flow will be better if there is High Trust in Management preventing:– Negative mechanism of corporate silence– Mechanisms applied by the dominant coalition (implicit and explicit)
create a ‘spiral of silence’ in an organization, resulting in the application of their dominant logic to solve problems
– Causes: fear for debate in which they can be confronted with negative criticism
– © Morrison & Milleken, Academy of Management Journal, 2000
Excellence Lecture Zurich 2005 © Prof.dr. Cees B.M. van Riel 3535
When does the content of ECincrease alignment?
Excellence Lecture Zurich 2005 © Prof.dr. Cees B.M. van Riel 3636
Contents of Employee CommunicationContents of Employee Communication
FlowFlow•Upward•Downward•Lateral
StructureStructure•Line•Parallel•Grapevine
ContentsContents•“Me-We”
ClimateClimate•Openness•Participation•Seriousness
EmployeeEmployeeCommunicationCommunication – Content of EC facilitates alignment
because it discloses the goals, values and achievements of the organization (Cheney, 1983)
– Effective EC pays attention to topics that are relevant for the organization as a whole (management perspective) and for the individual organizational member. More precise:
• Information about the company (We)
• Individual feedback (Me)
• H3: ME, WE, should be evaluated as useful and trustworthy
Excellence Lecture Zurich 2005 © Prof.dr. Cees B.M. van Riel 3737
When will communication climate impact SBA positively?
Excellence Lecture Zurich 2005 © Prof.dr. Cees B.M. van Riel 3838
Communication ClimateCommunication Climate
• An ideal communication climate is characterized by :– supportiveness
– participative decision making
– trust, confidence, credibility
– openness and candor
– high performance goals
Source: Redding, 1972
Excellence Lecture Zurich 2005 © Prof.dr. Cees B.M. van Riel 3939
Communication ClimateCommunication Climate
FlowFlow•Upward•Downward•Lateral
StructureStructure•Line•Parallel•Grapevine
ContentsContents•“Me-We”
ClimateClimate•Openness•Participation•Seriousness
EmployeeEmployeeCommunicationCommunication Climate
• The EC-Climate affects alignment because it satisfies the need of self- categorization(Turner, 1987) and the need for self enhancement (Tajfel, 1981), which requires that group membership is rewarding, (Morrissen & Milleken, 2000)
• Effective EC is especially characterized by a positive EC-climate, more precise:
• H4: EC should be evaluated by organizational members as open
• H5: EC should be evaluated by organizational members as providing an opportunity to participate in decision making
• H6: EC should be evaluated by organizational members as creating a climate in which one is taken seriously
Excellence Lecture Zurich 2005 © Prof.dr. Cees B.M. van Riel 4040
Rules & DirectivesEfficiency
e.g., (Former) Governmental organizations, high risk
production/storage firms
Shared MeaningCreating commitment by
sense-making e.g., IBM,INVE, J&J, 3M
AccountabilityHigh output/profit
e.g., Consultancy, Accountancy, Law firms
Living Apart TogetherEmbracing ideology
e.g., Greenpeace, Amnesty
Again: EC does not mean One Size fits allAgain: EC does not mean One Size fits all
Centralization Formalization
High
Low
External turbulence
Low High
Excellence Lecture Zurich 2005 © Prof.dr. Cees B.M. van Riel 4141
Resulting in the following consequencesResulting in the following consequences
Paradigm
Flow-Upward-Downward-Lateral
Structure-Line-Parallel-Grapevine
Content- Me-We
Climate-Participation (P)-Openness (O)-Seriousness (S)
Accountability Mainly upwardReporting Results
Line is vital Focus on Me
Focus on WeMe only relevant as control
Focus on WEMe only relevant as part of the award systemClarity about WE, Me topics irrelevant; only the ideal counts
Goal orientedCubbyhole cultureP + O medium; S high
Rules & Directives
Downward and Lateral EC
Line is vitalThe larger the organization, the more parallel media are needed.
Regulated/ rigid, plans/policiesPOS low to medium
Shared meaning All directions, however, only if this will stimulate acceptance for core values
Strong parallel media and persuasive Line EC
Visionary: one company, one visionPOS high
Living Apart Together
Mainly upward and lateral
Strong Parallel and GrapevineEC/ Hardy Line EC
Innovative/ Intimacy/ cooperativeP and S extremely high
Excellence Lecture Zurich 2005 © Prof.dr. Cees B.M. van Riel 4242
3 Measuring the impact of Employee Communication on SBA
Excellence Lecture Zurich 2005 © Prof.dr. Cees B.M. van Riel 4343
General assumptions from academic research……General assumptions from academic research……
FlowFlow•Upward•Downward•Lateral
StructureStructure•Line•Parallel•Grapevine
ContentsContents• WE• ME
ClimateClimate•Openness•Participation•Seriousness
EmployeeEmployeeCommunicationCommunication
AlignmentAlignment
EfficiencyEfficiencySelf Self
CategorizationCategorization
Self Self EnhancementEnhancement
It increases….. Resulting in….
Supportive Supportive BehaviorBehavior
–© Smidts, Pruyn, Van Riel, Academy of Management Journal, –vol. 44, number 5, 2001, 1051-1062)
Two basic motives explain people’s need for OI: the need for self-categorization(helping to define the individuals place in the organization) and the need for
self-enhancement (requiring that group membership is rewarding)
Excellence Lecture Zurich 2005 © Prof.dr. Cees B.M. van Riel 4444
Applying Fundamental Academic Research into PracticeApplying Fundamental Academic Research into Practice
• Based on previous academic research we developed tools to measure involvement of employees with their organizations
• In the nineties this was called the ROIT instrument focusing on the impact of employee communication on organizational identification. The results of this study was published in the Academy of Management Journal 2001
• The most recent development is the EcQ instrument, focusing on the impact of employee communication on strategic alignment, especially the behavior of employees regarding the desired actions of internal audiences: an article* summarizing the main ideas about this newinstrument is submitted to the Academy of Management Journal in 2005 again
*Van Riel, Berens, Dijkstra, The influence of Employee Communication On Strategic Business Alignment, Working paper RSM/Erasmus University Rotterdam, 2005
Excellence Lecture Zurich 2005 © Prof.dr. Cees B.M. van Riel 4545
Newest model predicting the impact of EC on AlignmentNewest model predicting the impact of EC on Alignment
Understanding of Strategic
Initiatives
Awareness of Strategic
Initiatives
EcQ®
Communication Climate
Management communication
Internal media
Cross-departmental
communication
Indicators of Employee
Communication
Indicators of Employee Support
Individual messaging
Corporate messaging
SupportiveBehavior
for Strategic Initiatives
Capabilities for implementing
Strategic Initiatives
Strategic Alignment
Attitude toward Strategic
Initiatives
Excellence Lecture Zurich 2005 © Prof.dr. Cees B.M. van Riel 4646
Where has Where has EcQEcQ® been Conducted so Far?® been Conducted so Far?
• This new model (called EcQ® Monitor) has been applied with employees of 15-20 global companies, including Philips, TNT, INVE, and AKZO Nobel.
• These studies have been applied in more than 40 different countries, including USA, UK, France, Germany, China, Japan, Brazil, Mexico.
• We are actively developing an international database of companies against which to benchmark EcQ® results of each individual company.
Excellence Lecture Zurich 2005 © Prof.dr. Cees B.M. van Riel 4747
Example: Overall results of an Example: Overall results of an EcQEcQ® Survey® Survey
improve
maintain
Immediate action
Maintain (≥70)Improve (60-69)Immediate action (≤60)
61.6 64.961.5
71.2
64.058.6
52.0
0
20
40
60
80
100
EcQ® Cross-departmental
communication
Internal media Managementcommunication'
Individualmessaging
Corporatemessaging
Communicationclimate
Excellence Lecture Zurich 2005 © Prof.dr. Cees B.M. van Riel 4848
Benchmarking Benchmarking EcQEcQ® across Firms Provides Norms® across Firms Provides Norms
Firm X Chemical80 countries
64.000 employees
Financial 24 countries
45.000 employees
Agri Business30 countries
800 employees
Building constructor3 countries
10.000 employees
Pharmaceutical68 countries
18.000 employees
Attitude toward strategic initiatives
60.2 68 75 73 62 78
EcQ® 62.0 68 65 66 74
74 70
60
76
70
70
79
78
7680
68 71
70
64
72
73
68Awareness of
Strategic Initiatives
73.1 74
Understanding of Strategic initiatives
51.6 70
76
75
Capabilities for implementing
strategic Initiatives
67.5
Supportive Behavior 68.6
Maintain (≥70)Improve (60-69)Immediate action (≤60)
Excellence Lecture Zurich 2005 © Prof.dr. Cees B.M. van Riel 4949
Driver AnalysisDriver Analysis
Indicators of Employee
Communication
Strategic Alignment
Indicators of Employee Support
Understanding Strategic
Initiatives
Awareness Strategic
Initiatives
Communication Climate
Management communication
Internal media
Cross-departmental
communication
Individual messaging
Corporate messaging
Supportive Behavior for
Strategic Initiatives
Capabilities for implementing
Strategic InitiativesCorrelations &
multivariate analysis
Attitude toward Strategic
Initiatives
Excellence Lecture Zurich 2005 © Prof.dr. Cees B.M. van Riel 5050
4 Take4 Take--AwaysAways
Excellence Lecture Zurich 2005 © Prof.dr. Cees B.M. van Riel 5151
Take Take AwaysAways (1)(1)
• Strategic Alignment is crucial for all organizations; the higher the support for strategic initiatives among employees, the higher the performance of an organization will be.
• Organizations apply various instruments to intensify the degree of support for strategic alignment: HRM-instruments, Management style and Employee Communication
• Companies should select the most appropriate style in Employee Communication, followed by a professional application of all four focus points (flow, contents, structure and climate) of EC in the context of the selected paradigm
Excellence Lecture Zurich 2005 © Prof.dr. Cees B.M. van Riel 5252
TakeTake--awaysaways (2)(2)• Tracking systematically the
degree of employee alignment, allows companies to press the right buttons at the right time, enabling organizations:
1.To assess the degree of employee support for a company’s strategic initiatives
2.To identify the drivers that create strategic alignment
3.To provide comparisonsacross market organizations within the company and across companies.
4.To optimize efforts in the area of employee communications.
Excellence Lecture Zurich 2005 © Prof.dr. Cees B.M. van Riel 5353
FinallyFinally
More information please mail me at:
THANKS A LOT FOR YOUR ATTENTION
Good Luck in implementing some of these ideas in your own organizations