The Case for an Open Communication Culture

April 12, 2011
Companies with high levels of engagement show a return on assets six times higher than companies with low engagement levels.

There is no doubt that the advent of the digital age has revolutionized our society's communication practices and needs. Its manifestations are everywhere: from the ubiquitous cell phone conversations and text messages to the infinite choices of the Internet. But with all of the hoopla about new technological advances and applications, the most significant fact of all tends to be overlooked: Namely, that the digital age provides us with an unprecedented -- and perhaps inevitable -- ability to create open communication cultures within the organizations that comprise our business society and other institutions.

Historically, such organizations have largely been able to manage their communications according to their agendas inside and, to a lesser extent, outside their walls. The control mechanism was their traditional hierarchical structure and a command and control style that allowed them to decide what information would be released or withheld. This level of information control is no longer possible in either business or government as recent events have so dramatically shown in the Middle East.

In 2006 ROI Communication, a Silicon Valley-based communication consultancy invited a select group of communication executives to form an ad hoc group in which they could trade ideas, confront the unique problems they faced in common and contribute to the thinking of not only their professional colleagues but also the senior leaders they counseled. Over time they decided to investigate the challenges of open communication and the digital revolution and what it all meant for their work and for the organizations they serve.

Clearly, the cultures of those organizations differ markedly from company to company, industry to industry and country to country so what constitutes an open communication culture in one company may be quite different in another.

A Definition and a Description

Our final definition of an Open Communication Culture (hereafter referred to as an OCC) is a two-part statement. The first part defines such a culture. The second part speaks to an organization's uniqueness in shaping how and to what degree an OCC can be created and supported as well as the role of the leadership in helping to nurture it.

An Open Communication Culture is one in which information flows freely and is easily accessible to both insiders and to the public at large. Consistent with the culture and values of the organization, its leadership enables, advocates and provides open access to information in which employees, customers, shareholders and the general public have a legitimate interest. Proactive communication initiatives and dialogue with and among the various stakeholders are the primary means for achieving open communication objectives. Among the obvious exceptions to the rule are proprietary, regulated financial and competitive information or confidential employee, customer or client information.

The shorthand version of that definition boils down to an OCC is a culture in which non-confidential and non-proprietary information is actively and freely shared with both employees and interested stakeholders with the leadership's blessing and proactive participation.

What does such a culture look and feel like? Obviously, a key phrase in the definition is: information in which people have 'a legitimate interest.' Certainly the definition of 'legitimate interest' is subject to interpretation and will vary from organization to organization. The important and ultimate test of intention is genuine respect for the spirit of openness together with how much information meets the definition of 'legitimate interest.'

The Business Case

So what will likely be the determining factors, the tipping point for company leaders in their choice of whether they will be proactive on this important issue? The decision to establish or not establish an OCC strategy and plan needs to be based on its perceived business advantages as well as its practical necessity in the free-flowing digital age.

The research to date in demonstrating the correlation between openness and business results is impressive. Consider the following varied, though consistent, findings from a variety of researchers.

  • Open communication has been demonstrated in global studies to be a key driver of employee engagement
  • Companies with high levels of engagement show a return on assets six times higher than companies with low engagement levels
  • Engaged employees are 56% more likely to create customer loyalty
  • A 5% increase in customer loyalty creates a 25% to 95% profit increase
  • Two of the most important factors in building employee engagement are communicating a clear vision of the future and building trust in the organization
  • The drivers of senior leadership reputation are a sincere interest in employee well-being, open and honest communication and visibility and accessibility
  • CEO reputation and openness are key factors in shareholder value and buying decisions.

There are still other related business arguments in support of an OCC. The digital generation, for instance, represents our future employee pool. They come to our organizations with their highly honed technology skills as well as their expectations of openness and recognition. It's unlikely they will be attracted to what they regard as closed, bureaucratic organizations that ration information or that if, once there, they will be inclined to stay. And, of course, the free flow of information is vital to collaboration and innovation.

In the 'Real' World

Figure 1 shows how a selection of organizations might line up on an OCC continuum in a normal distribution. The two types of organizations on the left side of the curve represent a negative to cautious response to the demands and threats of the digital age. By nature these leaders and their organizations tend to be more risk averse, and this is an important part of what defines their current cultures.

Figure 1: How organizations might fall on an OCC Normal Distribution Continuum

In the middle are likely the majority of organizational leaders who see the handwriting on the wall but who are determining how best to approach the issue. What does it mean for such things as protection of proprietary and competitive information? How much openness is desirable or even prudent? And how can we best determine where we are now on this continuum before we devise a plan or strategy for greater openness?

On the extreme right side of the curve is the early adopter, the progressive organization that actively and early on embraces the concept of openness, recognizing the advantages in achieving its particular business objectives. Slightly to their left might be the 'Early Majority' -- those organizations that are receptive to the idea of openness but want to approach it a bit more cautiously as their leaders debate the potential advantages and disadvantages with a bias toward change.

Of course, still another way to read the continuum is a journey, a movement through various stages of uncertainty as to how to deal with a radically changing information world. In short, as changing times and pressures assert themselves on a company and its fortunes, leaders may evolve one way or another in response to events and demands.

The How To and What If Questions

The question is how to create a strategy and the deliverables to assist in building an OCC in any given company. Perhaps the most important requirement is a visionary leadership committed to taking the lead in defining, advocating and nurturing an OCC vision. He or she needs to be acutely aware of the risks of propelling the organization prematurely into an OCC without adequate understanding of its current culture and a well-executed change plan. Or alternatively remaining stagnant and falling behind competitors.

The first step is the gathering of the business case that justifies an OCC. What are the competitive advantages for the company? How will an OCC likely enable greater levels of collaboration and innovation? What does it imply for the prospects of increasing employee engagement and loyalty? Is it likely to have a positive impact on revenue and profits? What are the risks? What are the practical OCC limits beyond which no one in leadership wants to go? And generally what will be the impact on the company's overall culture?

Regardless, in the end two opposing forces are in play. One is the opportunity to bring greater openness to the organization as a positive and proactive competitive force. The other is the threat of ignoring the power of the Digital Age, including its advantages and its risks and paying the price for that ignorance. That's the present reality that business leaders need to understand and appropriately act on.

Barbara Fagan-Smith is the founder and CEO of ROI Communication, an internal communications consulting firm focused on helping large organizations adapt and succeed in times of change. Roger D'Aprix is a senior vice president of ROI Communication. He is the author of seven books on internal communication strategy and practices. Tom Doolittle, PhD is the Lead HR director for Caterpillar's Excavation Division, located in Singapore.

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