ICology: A report on the state of internal communications

Ep 14, Simon Wright with Gatehouse

Simon Wright is the owner of Gatehouse, a London-based internal communications agency. They help organizations, leaders and managers engage, motivate and inspire their people. Very recently, they released their State of the Sector 2016. In its eighth year, the State of the Sector is the definitive survey of the internal communication and employee engagement landscape. And it's completely free to download

In this episode, Simon discusses some of the key findings in this year's report, along with a few inconsistencies that are reported by communicators. For example, many communicators cite the importance of training managers to be better communicators, however, few have any plans to do so. You can follow Simon on Twitter at @gatehouseSW and the agency at @gatehouse

ICology is available on iTunes as well as many other platforms and apps. Or you can listen to the media player above. 

Episode Transcript

Chuck: Welcome to ICology, the podcast dedicated to interesting people doing interesting things in the world of internal communications. If internal comms is your passion, then this is your podcast. Listen in. We've got a great episode ahead. Every year, Gatehouse, which is an internal comms agency in London, they produce a State of the Sector for internal communication and employee engagement. And from my standpoint, and from what I've known about it, it's a true must-read for internal communicators, but I've discovered a lot of people aren't aware of it. And I've been hounding Gatehouse since really the last of 2015, about this year's report, knowing it would be coming out in early 2016, and now it's here.

What's so great about the report is that it's a valuable snapshot of the current sentiment that exists in internal comms, the channels being used, their effectiveness, but also the challenges that internal communicators feel that they're facing, and way more than even that. So because the report comes out annually, what's so great about it is the chance of benchmarks, and go back and see previous years what the IC world used to look like, and also to evaluate how things have changed. So for today's show, we've got Simon Wright, owner of Gatehouse, on to talk about the 2016 State of the Sector report. Simon, welcome to ICology.

Simon: Thanks very much, Chuck. I'm glad to be here.

Chuck: Glad to have you on, and as I said, I'm a huge fan of this report. So first off, kudos to you and your team for not just creating it, but also sticking with it, producing it every year, as I said earlier, to help create that benchmark. But before we get into the State of the Sector, why don't you talk a bit about Gatehouse so that listeners understand who you are and why you've produced this State of the Sector report.

Simon: Sure. Gatehouse, we've been around now for about 10 years and we're based out of London. I'm one of the co-founders along with my co-director Lee Smith. We set up the business in 2006. We're just fast approaching our 10 year anniversary, which we are very excited about. The purpose of Gatehouse, back in those days, there was very little dedicated support for organizations in the area of internal communication /employee engagement, and we recognized that there was a need for that. On the back of that need, Gatehouse was born.

Since then, we've been developing the business very much around five key areas of growth: research audits, which is where the State of the Sector lends its heritage to; the strategy and planning, which goes into developing any form of communication piece and which we're going to hear quite a bit about when we talk about the State of the Sector today; the creative services team, which restore the funky cool stuff, the bit which I'm extremely jealous of and my colleagues when they create these amazing pieces of work and hopefully the State of the Sector report itself is testament to that. We do some really good training. We work with some great organizations, helping them become better at engaging their people and helping their teams and line managers become stronger communicators internally. Finally, and quite importantly, we help people find resources, and we help people with their interim placement needs.

I think Gatehouse, we started out…I suppose research was where it all began, but in those 10 years we've turned to a full service agency, covering so many different areas. Going back to that moment nine years ago — and I was recounting it to my team earlier this month when we were putting the finishing touches to the report — when Lee and I first came up with the idea of doing State of the Sector, nothing like this was in existence. There was no form of measurement of the industry. It was still such an immature industry, so for people to be measuring it, it was a completely new thing.

We conducted the first study, and it was just so funny when you look at the results now and you look at the results back then, we ask how much of your role is dedicated to internal communication, now we see people responding. 94% of our respondents say it's what they do, it's their main role. Back then, it was well below 50%. So we've seen such a seismic shift in the importance of internal communication, and I think it's been exciting for us to be able to follow that and to be able to record some of that journey through State of the Sector.

Chuck: So let's start digging into this. For this year, talk about some of the methodology, how you guys collected the data, who responded, where were they were from around the world and so forth, including some of those unique markets.

Simon: Sure. This year was actually the largest number of respondents which we've had. Again, I suppose part of that is the maturing of the industry as we get more people who are dedicated in this field. So we had over 300 organizations responding, many of which were very large corporates, so the highest proportion of significant sized businesses and organizations responding, which was great, wonderful from our point of view. And we got responses from over 70 countries.

Chuck: That's amazing.

Simon: It was totally amazing. It blew our minds when we were looking at it. Obviously, we're a UK based company, so you'd expect the lion share to come from the UK. But you know why only 52%, just only a fraction over half, of the respondents were UK? A big growth in the US, in North America. Historically, we've had minimal representation from our cousins overseas. But 14% of respondents were coming from North America. A similar number, a little bit more — 16%, from mainland Europe. So that means a big slug of people, 20% or so, are coming from the rest of the world. We even had one response from an organization in Afghanistan. Internal comms is really making its way around the world.

Chuck: I think what's great, too, is you talked about the size of the organizations, and I just did some quick math in my head that north of 80% of the respondents or organizations were 1000 or more employees. So that should be a good representation to anybody reading the report that it's not just super-small organizations responding, but it's also not just these big, giant behemoth corporations responding. It is a good mix of companies all throughout. As you put in your report, there was really no surprise at what communicators…because these are communicators answering these questions. They describe that the role and purpose of internal comms…why don't you just review those top three for the audience?

Simon: The top three — "enabling employees to understand the strategy, vision, and values" was number one. We had 86% of the respondents saying that this is pretty critical to their role, and that was the number one response, but just one point below that, we had corporate announcements. The corporate announcements piece was interesting because although they're sitting below the "enabling employees to understand the strategy and vision" piece, historically that's been the number one area. They've normally been perceived as the post box of the organization.

This year we've seen a shift to them being a lot more strategic. Internal communicators are potentially coming of age, and they're starting to take the whole role as becoming a lot more critical to organizations. That whole ownership of the strategy piece is quite an amazing achievement. It's obviously a natural home for most of your listeners. They'll be thinking, "Yeah, that's what I do," and I think that's great to hear and great to see, that we're seeing such a rise in the number of people who are recognizing that as being the key area of what their team is involved in.

A similar number were also rating employee engagement as being a key part of their role. And again, I think that's really interesting because we've been seeing a shift over the last two or three years as communicators are coming of age, the move away from engagement being where it's been historically within HR [inaudible 00:08:59] moving to the internal communications space. And I think it's getting very much more a blurring of lines between what is communication and what is engagement. I think that's a real testament to the fact that communicators are getting ownership of the engagement area.

Chuck: And there were, at least when I read through it, there were a few surprises that caught me off guard. One of them was around only two thirds of communicators are involved in actually developing and launching new technology. I thought that was…wondering why that number, I felt like it should have been higher. Even probably more problematic than that was fewer believe they were a long term strategy and vision for internal communications. Did these surprise you or were there others that when you guys got the results back, that really caught you off guard?

Simon: Chuck, this report was full of surprises, and I think what you just highlighted there are a couple of interesting ones, the developing and launching new communication technologies. We can make some thoughts and some recommendations and some insights around why we think that might be the case. Some of it is because many organizations have been investing quite heavily in the past, so developing and launching new communication technologies might not be the key areas that they're involved in going forward. Or it could be the fact that IT still has a stranglehold on that area. That bit, we're not too sure of. I think it's probably a mix between those two areas. I think it will be interesting to see, because as we go further through the report, you'll see that the rise of electronic channels is just unstoppable; it really is driving fast-forward.

As we repeat this survey again next year, it will be very interesting to see how those figures change. But I think the other point you mentioned there — and I think you really hit a critical point — is around the planning piece about how poorly some of our colleagues have been maintaining communication plans and planning in their areas, where we're seeing such a rise in the importance of the function. I think we're starting to see a concern, and I think it's going to become a growing concern, that we're not having the tools we need in place in order to be able to offer that level of credibility and support which people would be expecting from an organization, as professional as internal communications is becoming.

Chuck: Yeah, and I do think that's one of the glaring inadequacies that came out, basically with communicators is the lack of planning. And this is very apparent whether it's the annual plan, dashboards, even strategies and campaigns. I saw that in here, it said only half of respondents said they had written an annual communications plan. Why do you think that is, because imagine other functions at a business not having a plan. Imagine operations not having a plan, or essentially finance, a budget is a plan. So why do you think communicators aren't planning?

Simon: Good question, isn't it? I mean why aren't they planning and I think there are potential hints as to why that might be the case through other questions and other bits of data which we are collecting. You picked up on the point, the lack of the long term vision and strategy and plan; 51% saying they don't have this in place. And quite rightly so, that is quite worrying. But as we look a bit further, we see one of the big issues, one of the biggest barriers to success of communication at the moment, is a lack of resource within the internal comms team. It is putting two and two together. Whether we're making four or whether we're making some other number altogether, I'm not entirely sure at this stage, but we're thinking internally here, that the lack of resource could be the cause for the lack of planning. I don't think it's so much a case of not having the skills, not having the capability, because we're seeing that from some of the other responses, which we've been getting.

For instance, the IC team are viewed by senior leaders as trusted advisors. You've got over 70% of people saying they are, so clearly they've got the professionalization there. But perhaps it's a simple lack of resource to be able to have the time and effort to focus on it.

Chuck: Now, one of the things that I think people are probably tired of me saying, but I still like to say it over and over is that communicators don't have a content problem; they have a context problem. And one of the data points that stuck up to me was a report found that only 27% of communicators felt employees had a good understanding of leadership decisions, but then earlier we talked [inaudible 00:13:49] talked about it, that IC recognizes the importance of making leaders more visible and accessible. So they're making them visible and accessible, and yet they don't feel employees have a good understanding of the decisions leadership is making. So what are communicators missing in that gap, do you think?

Simon: So it's a difficult one to answer, which is why I'm sort of hesitating a little bit in responding, but the challenge we see…I mean we see this a lot when we're working with organizations as well. We've got this very finite resource already established as there's a lack of resource in the first instance. There's this demand of being a trusted advisor, so you've got these people working very, very closely with senior leaders, and that tends to be where most of the effort is given over to. The focus is very much on that leadership part. And I think the impact of that is that — and again this is something else which we come onto later on — we get some really fascinating insights into how effective senior leaders are at engaging their people. We're starting to see that area, almost the frozen middle, the line managers, the area which are actually critical to ensuring that communications work.

I mean it's great having electronic channels, it's great having twin channels, it's great having all that good stuff. But if your line manager area is not working to the capacity he should be, you're going to always struggle with getting the context right, getting it beyond more than just being the good intention piece. And I think for me that was probably one of the most worrying trends which we found in this report. That's probably one of the highlight areas for me.

Chuck: And we all know that there's all kinds of challenges out there to internal communications. There's technological barriers, people barriers, structural barriers, all kinds of things. But what were some of the top challenges that communicators cited in your report?

Simon: Yeah, it's kind of building on the last answer there, Chuck, to be honest. I mean I think the lack of higher manager skills is the number one area as to being a barrier to internal communications being a success. So you've got almost 60% of respondents saying that's their number one problem area. But you know what? It only features mid-table when we ask them, "What is your priority for next year to fix?" So only a third of respondents are saying, one in three people are saying it's an area to fix, but almost two thirds of respondents are saying it's an issue.

That's a really worrying observation for me. You've got this glaring problem child, which is the frozen middle, that area of line manager communicators who are just not able to be effective at what their communication responsibilities are. More often than not, there's nothing more than the fact that nobody's ever really shown them or taught people how to become a communicator as you get promoted up through your career. You take on more responsibilities.

Normally you're getting those promotions due to your technical competence, and all of a sudden you're given this range of other things you're expected to do, but there's little effort in giving around training and guidance to help people through that. And I think that's what this is showing. That, for me, is clearly a real problem area, and it is the number one barrier to success.

Chuck: Let's start getting into some of the channels, and this is really where communicators can start taking real quick action item. One of them is you talked a little bit to kick off with the face-to-face side of things. You guys look at both overall use, how many people are using them, but then which ones communicators feel are most effective. So what were some of the highlights from the face-to-face channel results?

Simon: Yeah, face-to-face is always going to be scoring highly in terms of effectiveness, and it is. I don't think many people would disagree with us that face-to-face channels are the most effective of all the channels which you can have in the armory of our toolkit. And they are being used by many organizations. Conferences and seminars for managers and senior leaders in use by over 90% of organizations; that's actually an increase from some of the previous year's surveys which we've been doing, where they've been cutting back on that, and I suppose possibly down to costs. But we're starting to see a rise in that, and there's similar levels of effectiveness with 85% of people believe them to be effective. So that's great news to be able to see those sorts of results.

On the other end of the spectrum, we're seeing things like employee forums which are in use by a lot of organizations, but not particularly effective. I think that could be for a whole host of reasons, because legislation in many countries will insist employee forums exist, but are they good as communication tools? And then in other countries and other jurisdictions, you're going to find that legislation isn't as stringent. When they're putting it in place, they're being put in place for much more communications-based reasons, and that's where you're seeing the strength in those. You've got a whole range of different channels there which are producing different results. All in all though, there's nothing which scores below 60% in terms of being an effective channel within the face-to-face. I think we can remain confident that it is a hardworking and well-used channel.

Chuck: And then from an electronic standpoint, it will probably be no surprise to anyone when they look at this that email, internet, and videos were the most used from a frequency standpoint, but which ones did communicators find to be most effective from the electronic side of things?

Simon: This one's really interesting, the electronic channels, because the people who are using them, the number of respondents who use the channels, is really mixed. You've got central emails, which is 98%. Almost 100% of organizations are using central emails. And it's a love and hate channel. It's often referred to as the "mama" channel: you love it or hate it. Whenever we test people with what's the most popular communication channel, it's normally always email. And when we test people what's the least popular communication channel, it's normally always email.

You've got this amazing channel which has its love-hate position, but it's just constantly going to be used, and I'd be amazed if that ever changes. I'll be surprised if that ever drops in the near future from being the top one. But I think the more interesting ones are around internal apps. That's quite a fascinating one for me. Only 35% of respondents are using it, but for those organizations that do use it, it's regarded as one of the most effective channels they've got. So you've got this emerging channel which hasn't yet raised itself into the front line of communication channels, but where it does work it's working extremely well. I think we're going to see a big rise in that.

The other area was around videos. I think videos are becoming more and more mainstream. It's not necessarily people getting big expensive, glossy, production-based videos. It's more self-shot, shot on your phone, shot at your desktop, those kind of produced films which are making it in the video grade now.

The final one which I'll speak on is the social media channels. Now, we're seeing a massive rise in those, and I know we'll come onto that a little bit later, but social media is on the rise predominantly down to one channel, and that's Yammer. And I think that's down to the fact that Microsoft now owns this and it's packaged with a lot of their services they provide. So many organizations we talked to, both in our professional capacity as consultants but also in a survey like this, they're using Yammer, they're adopting it, it's in place. There are other channels, too, but it's clearly Yammer, is the front-runner there. But is it working? Is it effective? That's a big question mark at the moment.

I know five or six years ago when we were in the early days of running this research, and I was standing up in a presentation saying social media is the one to watch. I said fast-forward five years' time, it's going to be the dominant channel. We'll we've fast-forwarded five years' time, and it's hardly moved at all. It's in more places, but in terms of its effectiveness, it isn't really cutting it, which I think is interesting.

Chuck: That's a good segue, because like you said, compared to past years' reports, social has been on the rise, especially from that enterprise social network standpoint, like Yammer you talked about. But I think what was interesting is that many of the communicators still feel like their organizations are behind in adoption. Do you think this is a reality for them, or do you think they feel like everyone else is more advanced or further along than they actually are?

Simon: I think a lot of communicators are looking at social media, and it's again back to the point I was saying about Yammer, and seeing it's a critical tool to have, it's going to revolutionize the way we do communications in our organization, it's going to replace the internet, and I disagree. I think what social media is, it's an additional channel. It's just part of the mix. It's useful, by no doubt is it a useful tool, but it's not in the foreseeable future going to become a key, fundamental channel in the same way that internet has in the past and the same way email currently is. I think you're going to see a continued rise in adoption, simply because of the fact it's now available very, very easily, and so many organizations are just getting it almost free of charge or included within packages they've already purchased. So it's a natural expectation to see it being rolled out and adopted. But will it be used? Will it become a central part of the communication mix? I'm not so sure about that.

Chuck: And I think next, again going back to when you guys started doing this, mobile probably wasn't even an option for a lot of companies, but the adoption here looks to be lower than I thought it would be. And even with an app, looking at people who scored it as "We used it and it's effective" or "We used it and it's not very effective", those numbers are below 20%. Why do you think that mobiles…is it struggling? Or has it not quite caught on with the right organizations yet, with mobile apps?

Simon: Yeah. I think some of this is looking at the data, and the way to interpret some of the data. Mobile apps, we still predict, are going to have a huge future. That said, I did say the same thing about social media five years ago, and that hasn't quite worked out the way I thought it would do. But I do think the mobile app market is the area to really focus on in terms of the electronic channels. What you're seeing here, though, is some of the stats suggest low effectiveness. I think that's down to the fact that it's used by such a few number of the organizations responding. Where they are using it, its effectiveness is rated highly, but we're seeing the results are a little bit skewed because so few organizations are currently using it.

What I'll also go on and say, though, is we were very surprised, because we asked questions around how employees currently are accessing their internal channels, and we've been asking those same questions for the last three years. Personal mobile devices, using your personal phone, bringing your own device, we had 43% of responses in 2015. In 2016, it's 43%. We saw no change at all. I was very surprised by that because I think bringing your own device is definitely the way this is going to go in the future. Will I be set in 12 months' time still being surprised because it hasn't moved? I think that would be a shame, because I think bringing your own device is the way of driving this forward. I don't think it's about companies issuing their employees with certain device types. It's about having tools which work on multiple device types and enable employees to be able to access it when they want to and how they want to. I think that's the future of those channels.

Chuck: And I think there's even a natural bias for some communicators. They automatically start to think with mobile that, "Oh, our employees will never put an app on their own phone." Well, there's a lot of employees who want that communication in one place. They're happy to put their email if they have it on their phones, so an app is a natural progression. I agree with you. It's surprising that that number hadn't changed, but I think that as more and more organizations not just launch it, but figure out how to launch it and how to take advantage of it, that will get better. But what I also like about the report here is that we don't forget about our old friend print, and so many communicators have been trying to kill it off for years. I'm still a big fan of it even though they seem to question its effectiveness. From your perspective at Gatehouse, does print still have a place in internal comms?

Simon: I think it definitely has a place. I think it will be a sad day when we take these questions out of the report. They've been in their since day one. They've been amended slightly, but when we ask the question about how many people are using posters, well over 90% of organizations still use posters. They have a role to play. They are that single very, very quick hit of information as you pass by, as you walk by. They are a part of that core set of channels, in my opinion.

Employee magazine is quite interesting because that scores really highly for those organizations that have it, but so few organizations use them now. This is print-based employee magazines. So only 45% of organizations are actually using print-based employee magazines, but you know it hit almost a 70% effectiveness rate, which I think is a great testament to their channel. There's a wonderful channel which we always include here called "postcards", and I don't know why we include it still, but I think that's pretty much hit the rock-bottom. Nobody uses it. It has low levels of effectiveness, but you know what, Chuck? I just love the idea of doing postcards as a communication channel, so it's going to feature my surveys for the next 10 years.

Chuck: To sort of sum up our review here, let people know where they can go to download this report, but I also want to find out from you. What do you think is sort of the one biggest takeaway for communicators from this year's report?

Simon: Well, I'll answer the second question first, Chuck. Well, there are two big takeaways for me, and it's going back to one of the really early questions about the priorities and the challenges which internal communicators are facing. The number one challenge which communicators are facing is this issue with line manager training and the ability for line managers to be able to communicate effectively. And that's down to, as I was saying earlier, a lack of training, the lack of skills that those groups have, but so few of us are looking to fix that issue. It's way down on the table in terms of priority areas to fix. Two in three of us say it's an issue, but only one in three of us is going to do anything about it, which I think is really worrying.

The second big takeaway for me is the fact that, again going back to the challenges we are facing. The third main challenge we are facing is the lack of resources we have on our team, and I think that impacts everything down to the professionalism, the ability to be able to maintain strategy documents, and be able to ensure the maturing of our teams. It's our third biggest challenge, but you know what? It was the lowest priority area, so none of us are going to fix it. One in 10 of us are going to be looking to fix that as an area. We're not going to try to fight for more resources, and I think that's such a shame, because we're making such great strides in so many different areas, but we can only do that if we've got the team behind us to help us be effective. And we've got the skills and the resources to be able to respond to the business needs. They're my two big takeaways. 

Answering your other part of that question as to how to get a hold of that report, we are free of charge. Anybody is very, very welcome to have a copy. You just need to go and visit our website, gatehouse.co.uk, and you'll be directed onto the State of the Sector page there. So that's the easiest way for you to get hold of a copy. Of course, any of your listeners will be very welcome to contact me directly, Chuck, and drop me an email. You can find my details on the website.

Chuck: That's fantastic. So again, thank you, Simon, for that, and I think it's a great review. Like I said for me, it's a must read. As soon as it comes out, I read it, I evaluate it, and begin sharing it because I want as many communicators to get their hands on it as possible.

What is a final piece of parting advice you want to share with our listeners? So we obviously have internal communicators who listen. We also have business owners and sales people. We have HR individuals that listen, but what's sort of a final piece of advice you think would sort of "rock their world", so to speak?

Simon: I'm not sure it's going to rock their world, but this is a piece of advice that Lee, my co-founder, and myself learned quite early on, when we first set up Gatehouse. And that piece of advice is "decide and do". So often, we spend a long time thinking about things and planning and planning, and just not doing anything. And it's really core to the DNA at Gatehouse that we decide, then we do, and stick by that decision. So decide and do, that's my advice.

Chuck: That's very American of you.

Simon: When we came up with it sitting in a bar in the JFK airport on our way back from those trips to the States having met some very inspirational people in New York.

Chuck: Decide and do, I like it.

Simon: And Lee and I were saying, "We need to be a bit more like some of our American colleagues." Decide and do.

Chuck: Well, Simon, I want to thank you again for being a guest on ICology. This has been great, obviously sharing the results from the State of the Sector, but also your insight and advice. ICology is a listening post for communicators. It's a place for them to hear stories from professionals like you, Simon, who can inspire them to be better communicators, because I think we can all be better communicators. Please follow ICology on Twitter @LearnIcology. We are 14 episodes in with many more to come, including an ICology website this year. It will be a place to go and listen to past episodes, but also much, much more. If internal communications is your passion, ICology is your podcast. Thanks for listening.