How Communication Drives Performance (HBR)

“Courage, innovation and discipline help drive company performance especially in tough economic times. Effective internal communications can keep employees engaged in the business and help companies retain key talent, provide consistent value to customers, and deliver superior financial performance to shareholders.”
Watson Wyatt 2009

According to Watson Wyatt’s newest communication survey for 2009/2010, companies that are effective communicators “have the courage to talk about what employees want to hear,” “redefine the employment deal based on changing business conditions,” and have “the discipline to plan effectively and measure their progress effectively.”

Does this really matter? Yes. The study shows that companies that communicate effectively had a 47% higher return to shareholders over a five-year period (mid-2004 to mid-2009).

The link between communication and these three levers of performance — courage, innovation, and discipline — is a welcome one. These are themes that I have written about, taught and coached for years. Here is how you can utilize them in the workplace.

Courage. Watson Wyatt defines it as “telling it like it is.” This is especially true when it comes to delivering straight talk. Shielding employees from bad news is akin to treating them like children; it says they are not “grown up” enough to handle tough stuff. So why do companies do it? One reason is because they feel employees will lose heart and then underperform. The Watson Wyatt study shows just the opposite. Tell people what they need to know and they will reward you with solid performance.

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First posted on on 11/19/2009