ICology: State of the Sector 2017

Ep #44, Simon Wright with Gatehouse

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This episode of ICology welcomes back past guest Simon Wright, owner of Gatehouse. For the past nine years, Gatehouse has produced the annual State of the Sector report. He shares some of the trends more than 400 communicators shared about internal communication, along with challenges, channel use and leadership/manager communication. 

State of the Sector is the longest established survey of the internal communication and employee engagement landscape, informed by responses from hundreds of practitioners around the world.

This year’s report once again reveals some fascinating facts…

  • Where IC practitioners will be focusing their efforts in 2017
  • What channels they consider most/least effective.
  • In particular, how successful social platforms are and how much progress has been made with mobile communications
  • The average IC spend by size of organization
  • The size of in-house IC teams

It's a must-read for internal communicators and you'll enjoy hearing some of the context behind this year's data. 


Episode Transcript

Chuck Gose: Hello. This is Chuck Gose, your host of ICology. Thanks for listening. We've got a special episode today. Every year Gatehouse, which is an internal coms agency in London, produces its State of the Sector for internal communications. It's very thorough and a true must read for internal communicators. What makes the State of the Sector so valuable is that it provides a snapshot of the current sentiment of internal communicators, channels being used, their effectiveness, and even some of the challenges that communicators are facing, and much, much more. Because the report comes out annually it's also a great chance to benchmark. You get to see and go back what the IC world used to look like and to evaluate now how things have changed year to year.

For today's show I want to welcome back to ICology Simon Wright, owner at Gatehouse. Simon, welcome back to ICology.

Simon Wright: Thanks Chuck. It's great to be here. I remember, only 12 months ago when we were set doing a similar podcast so I'm delighted to be back.

Chuck: I'm happy to have you. For those who didn't listen a year ago, or aren't familiar with the State of the Sector, just provide an overview for them.

Simon: Sure. State of the Sector is in its 9th year now. It's been running for many years. We've covered a lot of different areas since we started the survey back all those years ago. Initially it was actually focused on specific sectors, hence its name State of the Sector. Then we broadened it as the industry became more mature. We broadened it to kind of cover a panned industry piece, and also panned geography too. It's broadened from being very much UK-centric in its early editions to now in its 9th year into something which is much more comprehensive and much more complete and interesting I think from our point of view in so far that we've got some nice representation from outside of the UK as well.

Chuck: I have to ask. 9 years ago when you started did you think it would still be here today? Or was that the hope?

Simon: No. 9 years ago when we started it, I mean back 9 years ago the whole internal coms space was a completely different thing. I mean, one of the really, one of the champagne moments when we were doing the results for this edition was, it's the first time when we've asked the question, how many dedicated internal communicators are there in your organization, it's the first time there was 0 responses to the answer of 0. Which means that previously there's always been a number of respondents that have said that their organization they work with don't have any dedicated internal communicators. In fact, 9 years ago that number was so much higher. It was certainly double digits. When we did it we were kind of thinking, "Will this be successful? Are there even enough internal communicators out there?"

We are in 2017 now, and we look at the results and we're just, I think, delighted to see that the challenges we're facing now as an industry are not just simply about getting our foot through the door and getting our place at the table. It's our next stage in the maturing cycle. It's the next stage of going from being just this kind of tick box function to being a genuinely adding value part of the organization.

Chuck: For the 2017 results you'd mentioned that when it started it was very UK-centric. Now it has gone global. Why don't you just provide people a sense of who participated, from where, how many different industries, companies, that sort of thing just so they get a good idea of the spectrum.

Simon: Yeah, okay. All right Chuck. Just around 2/3 of the responders come from the UK, which is probably fairly understandable because it's a UK led piece of research, but over 400 organizations responded which is the highest we've had in a piece of research like this. That's large organizations with significant populations. Of that 400 organizations, there was 451 actual responses. The reason the number of responses is higher is because there's some from these larger organizations more than 1 person might be responding.

62%, so just under 2/3, said their role was purely internal communications. This kind of plays back to the point which I was making in the intro Chuck, about the fact that the whole area is much more professionalized. It's still not 100% but it's significantly higher than it's ever been before. When we look outside of the borders of the UK we had just over 10% of responses from the U.S., 15% from mainland Europe, and 5% from Asia Pacific area. It represents over 25 industries so that's a really broad range of organizations in a broad range of countries.

Chuck: Staying at this real sort of high level overview, looking back and comparing the 2017 to previous years, were there any new themes in this year's report, or any surprises that you saw compared to previous State of the Sectors?

Simon: Yeah. Whether we would see them is a surprise, what we have seen is, and it becomes it's pretty much a headline trend I think for the 2017 results, and that is around what we're calling the Office 365 effect. The Office 365 effect is basically the impact of Microsoft's roll out and the success of the roll out of Office 365. In it, yeah it may include Share Point, includes various other tools, but the implications of those tools are that organizations are starting to have access to new tools which they didn't have before. Meaning these sort of things are being rolled out to audiences across organizations. As we drill down to results you'll see what the implications of that are.

Chuck: I would imagine then, with Office 365, that also impacts not just larger enterprise organizations, but also much smaller businesses who now have access to some of these tools.

Simon: I think that's right Chuck. The impact is for every organization from the small startups to the large corporates. They're getting access to tools which they don't necessarily know how to fully use. These things are being rolled out, and they're being made available, and we look at it as communicators. One of the hardest fights we have is for the ability to be able to get access to new channels. Here we are getting channels being provided to us without necessarily even our knowledge, or without our recognition of how they're going to factor into the strategic mix of channels which we have available.

We've got to now look to implement these in an organization. Again, it's an organization of any size. How do we actually use them? How do we make them effective? How do we turn from just being some wallpaper noise, which actually can cause more disruption, or how do we actually make them effective?

Chuck: Well, you bring up a good point that it is sort of good news for communicators, but with a little bit of an asterisk next to it because you're right. If you do great things with it then it will become a great channel. If not it can become a distraction. What were some of the other sort of good news items that you found in this year's report?

Simon: Well, we've covered a couple from the early points about the fact that we're getting more professionals in organization. The first time we've had none of our 400 organizations saying they don't have a dedicated internal coms person. That's really really good news to hear. We're also getting a much more sense of the fact that planning, strategic planning of the communication function as a whole, is also playing a greater role too. This is becoming more important as well. When we're going to into some of, when you look through the report, there's some particular slides and some particular stats which are focused around the rise in us as communicators developing strategies and plans.

It's still an awful long way to go. We're still not producing the same level of strategic plans as we would look for from other functions, marketing functions, HR functions, business plans, strategy plans, but it's heading in the right direction. A long way to go, but heading in the right direction. I suppose it's the overall sense of the function is maturing. We've gone from being maybe a petulant teenager as an industry to becoming much more of a young adult.

Chuck: Well, and as you mature from that teenager to the young adult, sometimes you have to deal with some not so good news items. What did you see this year that maybe outside of the planning isn't quite there yet is a bit of a hiccup for communicators?

Simon: Last year's results one of the big headlines was the fact that leaders and line managers are not getting the support they need as a critical communication channel. They're still regarded as absolutely essential to the success of communication, but as I said in last years we recognize that as a major issue. We've seen improvement this year but it's still very very much a stumbling block. It's still very much a hurdle to success. If we're going to be a successful function, a successful organization, we need to be able to respond to that. We need to be able to ensure that our people can be effective as communicators. I think that's really really important as well.

I think there's other kind of key messages which we looked at we're a little bit, I suppose disappointed in. As a function, most of our jobs is centered around supporting the organizations vision, the strategy, the values, all that sort of good stuff. Helping people in an organization understand the direction the business is going in. One of the real, I suppose, disappointment moments is when we ask the question, "How well would you say people in your organization understand the following?" One of the options was why leaders make the decision they do. Only 3% said very well. 18% said well. That means almost 80% rated the awareness of why leaders make decisions they do as average or poor, which is a significant decline from last year.

Whilst as a function we're out there to try and help people understand why the business is headed in the direction it is, we're not doing a great job of helping leaders articulate their message and helping people understand why they're making the decisions that they're making.

Chuck: One of the questions you ask communicators, getting the research, is asking them what they're focusing on in 2017. Do you mind just rolling through that top 5? Some of them might touch on some of these other topics, but I think giving people sort of that to 5 of what their peers say they're focusing on would be helpful.

Simon: To answer your question Chuck, the top 5 priorities, communicating strategy values and purposes is our number 1 priority, as it was in 2016 too. Which is, I suppose, a segue from the previous question, which is why we were so disappointed with people not understanding the leadership. Harnessing leadership communications is 2nd highest priority, which is again an issue when we look back onto the previous answer regarding why people are not understanding why leaders make the decisions they take.

Here's a new entrance to the top 3, which is communicating a change program. It was 4th in 2016 at 41%. It's now 46%. A significant rise in terms of being a priority. That's really interesting because the world has changed significantly in the last 12 months. When we sat doing this podcast back in the beginning of 2016 Chuck, there were the likes of Brexit happening. There was the likes of the changing political climate. There was a lot of that sort of stuff which was being talked about but not really expected to happen. 12 months has been a hugely long time and we've seen a significant change. We ran a Brexit special of the State of the Sector after the events of summer last year and we revealed there that this focus on change is going to be coming increasingly important, and increasingly critical and that's exactly what's happening.

Change is now the buzz word for communicators. We're getting ourselves prepared for change, but the thing is we don't know what that change is. There's a lot of conversation around it. Leaders are talking about different areas of change, but we don't know what it is yet. We're just getting ourselves ready for it.

Chuck: Are you going to do a State of the Sector Trump edition for us over here? If you do, just make sure the designers use a lot of orange.

Simon: Well, we have been toying that, but I think we got to focus on Brexit. We've got enough to worry about in the UK at the moment.

Chuck: Looking back over though the things you talked about that communicators are focusing on in 2017, do you think, and looking at it through all the answers, is that the proper top 5 or would you like to see other efforts brought up into that?

Simon: Again, going back to this point about the maturing of the function, one of the bottom ranked priorities was improving themselves, getting themselves in the IC team. Only 24% ranking that as being a priority area, albeit up from last year's 22% but not statistically relevant enough for it to be particularly focused on. That goes to show that only sort of just 1 in 4 of us is looking at how do we make ourselves a more accountable team? How do we make sure that we've got the strategic skills we need in order to be effective? What we see is, and what we see throughout the results is that the focus area in us as a function is poor. We need to do more.

I said it's improved, and it has improved, but it's still very very poor. We need to be taking a lot more focus on ourselves as a organization, or as a key part of the organization, and then developing the tools which we need in order to be able to ensure that we have the skills in order to perform at that level. Yeah. Disappointing that it's not a higher priority, but I suppose a little bit pleasing that it's on the up.

Chuck: Yeah. It points back to one of the very early episodes of ICology. I had Heather Wagner from the BBC on. She talked about the importance of communicators owning some of their own development, of not relying on organizations to provide their career development. Actually investing in themselves to continue to develop their careers. I think that this is sort of a bit of an attitude change that I would like to see a lot of communicators take. Again, maybe this is part of going from that teenager to that young adult. You do start to invest in yourself a little bit more. Maybe whether this is 2018 or 2020 State of the Sector we'll see that growth happen.

Simon: We certainly hope so. Heather's absolutely right. When she talks about the focus of we need to take ownership and take responsibility we absolutely do. We're trying to position ourselves as advisors, trusted advisors, partners to the business. If we can't be seen to have the same critical focus which we would expect to have other functions demonstrate I don't see how we can be, we can legitimately have our place at the table.

Chuck: Something I noticed when going through the results is when you asked about the barriers that communicators say they faced, all of the areas or answers went down from 2016, including the big one from last year which was the lack of line manager communication skills, do you see this as truly barriers are dropping, or is this a matter of people just being more optimistic about sort of how they see some of the challenges ahead of them.

Simon: It's a good question Chuck. You know, we're quite warmed by the fact that the barriers are reducing. It could be partly because of the fact that organizations, or the people within the internal coms functions, are becoming more capable of dealing with these issues. As we're maturing these are becoming less of barriers. These are becoming things which we are dealing with in our day to day jobs. That's me with my optimistic hat on. It could be because we had a new entrant in this year's one which we didn't have previously which might have diverted some of the stats because he went straight in the number 2 spot which is about internal technology not being fit for purpose. This is the other side of the Office 365 coin. We were having technology issues. Technology is playing an important role in this.

Yes, it could be a variety of different things. What we do know is there's a very very lucky 3% sitting in the bottom of the table saying there's actually no barriers to success whatsoever, so I'd love to be part of that team.

Chuck: Yeah. They basically have no excuses then.

Simon: Yeah, quite. Life is good for that happy 3%.

Chuck: One data point that really stuck out to me, and I think this is touching on previous topic around leadership communication, but it was that communicators stated that 40% or right around there of their executive team members were not visible to employees, but communicators still rank them high on communication skills. This, to me, seems to be a bit of a mismatch of they have great communication skills but yet they aren't visible to employees, so where? It seems like those communication skills aren't being put to use. Am I looking at this correctly?

Simon: I think you are looking at it correctly but I think it's kind of, when you think about us as communicators, when we're working for our peers, and our leaders, what is our area of focus? It's predominantly going to be on those leadership team, those key influences in an organization. They tend to be the executive team members. On one hand you've got this, the executive team members are the primary area of focus, which means they're probably going to have higher communication skills because they're getting the effort, they're getting the focus, they're getting the training, they're getting the nurturing they need to be effective. The issue is is how visible and approachable are they? That's a very very different picture.

On one side you're seeing the executive team members being the least approachable, but the other part of that question is how approachable are your line managers? They're the most approachable by a long way. Over 95% saying they're either very or reasonably approachable, but when we look at them as communicators, they're poor communication. They're performing poorly the line managers. Why is that? Is that because, going back to the point from earlier, that we're not investing the effort we need to in line manager skills and line manager training? What we're doing is focusing our effort in supporting the leadership team because they're our natural people we're focusing on. The implication is that that effort is not being spread across the broader organization which is causing that hurdle which we've identified from earlier.

Chuck: People can download the report now. Simon, why don't you let them know where can they get it, and also share with them about a webinar that you have coming up as well.

Simon: Yes. Chuck your listeners will be very welcome to go on to our website which is www.gatehouse.co.uk/stateofthesector. From there they'll be able to enter their details if they haven't already signed up and they'll get access to the full report. In addition we're running a webinar which is going to be hosted on the 21st of this month, 21st of February. Again, listeners are very welcome to access that. We'll be also running a live Q&A during the course of that webinar too. There'll be a Twitter feed. All of those details will be available on the website page. Please do visit that if you're interested in finding out more about the State of the Sector.

Chuck: I will also have those links on the learnICology.com site as well. You'll find links to both the State of the Sector as well as information about the upcoming webinar.

Simon: That's great. Thanks.

Chuck: Well Simon, I want to thank you again for being a guest on ICology and sharing this year's State of the Sector report. I know we wanted to just sort of give a little bit of a tease for listeners, but get a sense for the quality of content, the level of research, but also this valuable information because they can now begin seeing what their peers are seeing. The biggest pieces of feedback I always get from communicators is they want to know what their peers at other companies are doing. I think the State of the Sector gives them a glimpse into, as a collective group, gives a glimpse into what their peers are focusing on, what they're working on, what their challenges are. That's why I think the State of the Sector is such a valued report. Kudos to you and the rest of the Gatehouse team for putting out another great great edition this year.

Simon: Thanks Chuck. I appreciate that.

Chuck: Visit learnICology.com to catch up on old episodes, get to know guests better, read blog posts, check out events. Also, all episode transcriptions are there, and again you can be able to find information about this year's State of the Sector and the webinar. Also, keep an eye out for something else. The video series where I ask the internal coms community a question and you provide the video answers. All of these are at learnICology.com/somethingelse. Please follow ICology on Twitter at learnICology to pick up show announcements as well as other IC news. If you're not already a subscriber, change that. Listen to ICology on iTunes or wherever you get your podcasts. If you enjoy what you hear it would mean a great deal if you took the time to leave a review. If internal communications is your passion, ICology is your podcast. Thanks for listening.