BrandLoop #7, August 1998

The Need for Internal Communications

Most of Through the Loop's focus in BrandLoops has so far been the external face of the brand in terms of attributes, properties and expression. This BrandLoop examines the internal face of the brand and how this affects the process of Internal Marketing in the organisation. There are many signals that Internal Marketing can be just as potently used as external marketing. There are some clear forces of change driving this momentum.

• Many enterprises are continually in some form of transformation-mergers, alliances, downsizing, rightsizing, etc, generating the need for constant communication.

• Some enterprises may rename themselves as a result and this rebranding requires internal communication.

• More companies are empowering staff to take on increased focus in the customer relationship. This needs full involvement, immersion and training in brand values.

• There is more contract and less full-time employment. Project staff also need to understand the brand vision. This force of change is accentuated with the increasing trend to outsourcing.

• There is less reciprocal loyalty between employer and employee, the employee's time becomes transactional. The "internal" brand can be a way to bind the two parties together with shared values.

• New ways of working require organisations and staff to constantly learn new skills and sometimes these are acquired through alliances. Building a learning company will be an important future consideration. Internal brand values can be a cover for this effort.

From Old to New

There are some clear changes in the expected pattern of employment in the future and it is useful to look how Unisys summarise these prospective changes:

Future Employment Drivers

Old

• Employment

• Office-based

• Local

• Technophobic

• Insourced

• Service = a privilege

New

• Employability

• Free-ranging

• Global

• Technology-dependent

• Outsourcing

• Service = a right

Each of these drivers is increasing the need for Internal Marketing. However, to date, there has been a considerable knowledge gap about the effectiveness of components of Internal Marketing. To reinforce this point, a study by Intercommunic8 reported in Marketing Week showed that 85% of companies did not even have a human resources or marketing budget for internal promotions.

To build its knowledge base in this area, Through the Loop awarded a prize to reward Margaret Baker Moss of Kingston University for marketing insight. Her dissertation demonstrates that there are some critical values of vision, reward and development which always need to be taken into consideration in terms of Internal Marketing. Too few companies benchmark themselves against the holistic range of these three concepts.

Staff Must Live the Brand

Staff are the face of the corporate brand. Internal Marketing should encompass mission, philosophy and core values. Communication should flow horizontally, vertically (upwards and downwards). There are many organisations which do not achieve even one of these flows. In the future, forms of Internal Marketing will require the involvement of an empowered Human Resource function.

Brand values may need re-expression with the advantage of Human Resource input rather than just the Marketing Department!

Practical Demonstrations

Just consider what happens if the internal and external faces of the brand are not co-ordinated.

• Bad ground and in-flight service can totally alter your perception of a "customer friendly" airline. The delivery does not live up to the brand.

• Outsourced catering facilities in leisure attractions are sometimes unable to carry the same values as the theme park.

• A grumpy waiter in a fast food outlet can totally destroy welcoming family brand values.

• Conversely, Nordstrom staff in the US enhance the brand offer by being empowered to serve the client. They select staff who fit their culture, those who have likeable personalities.

• Dell customer care through call centres surrounds the brand with a service halo.

• First Direct can treat all of its customers the same way because they understand their customers' financial requirements.

A very recent example of merging the two power telecom brands of AT&T and BT was apparently enhanced by a joint internal culture exercise. This helped the two managements evolve a new possible culture for the merged international operations. Similar processes would have been invoked after the creation of Diageo and more recently of UBS.

Restaging of Human Resources

There has been much criticism of Human Resources in the past and with the new focus on Internal Marketing, a considerable transformation will be needed. Earlier this year, Dave Ulrich in a New Mandate for Human Resources (Harvard Business Review) January 1998 stated that HR could deliver operational excellence in four ways:

• HR should become a partner with senior management in strategy execution.

• HR should become expert in the way in which work is organised and executed.

• The function should become a champion for employees.

• Finally, HR should become an agent of continuous transformation.

This restaging requires HR to have new tools and tactics available to them.

New Tools and Tactics

Through the Loop has been talking to a number of partners who are leading various processes of Internal Marketing. For example, it is now possible to undertake staff surveys either using the Internet as a platform or via an Intranet. Working with Quantime, gives a very efficient delivery mechanism, for achieving staff interviews at all kinds of levels of seniority. Through the Loop is now collecting examples of best practice in this area to build on its branding best practice work.

Some hypotheses about Internal Marketing:

• Internal Marketing can help to establish an important framework of legitimacy for new directions and transformations.

• Internal Marketing is set to grow more important due to the emerging employment patterns. Achieving key values may be the only way to move the company forward.

• Internal Marketing can accommodate the constant process of change that most companies ride at the end of the 1990s.

• Internal Marketing helps the process of knowledge development. Intellectual capital will be one of the main sources of growth in the future.

• Internal Marketing can help to enhance customer loyalty (the subject of an earlier MarketLoop). The customer builds a bond of trust and expectations with employees. When employees leave this bond is broken. The processes of Internal Marketing can minimise this because service values should be a known process.

Summary

At the end of the 1990s, marketing attention is becoming more introspective because the synchronisation of the external and internal expression of the brand is vital. Good examples of such synchronisation prove to be comparatively rare. Disney World, Nordstrom, some parts of the Virgin organisation, at one time, British Airways and also First Direct. Internal Marketing needs very strong discipline that can enpower the organisation in new directions. Continued diminution of loyalty is dangerous. However, there is a very strong "health risk" involved and that is the following:

Health Risk

Do not undertake an internal communications review if you have no intention of following the results through with your staff. There is no point in consultation if there is no follow through from senior management.