Internal communication: explanation, KPIs, and practical examples

What is "internal communication"?

Internal communication can be between managers and employees (vertical communication) and within the workforce (horizontal communication). The ultimate goal of internal communication is to inform, activate, and motivate employees.

The importance of this becomes crystal clear whenever something goes wrong in internal communication: in a crisis, for example, in conflicts between colleagues or when a new manager is completely overwhelmed. The consequences of poor internal communication are dissatisfied and overworked employees, declining productivity, and increasing staff turnover.

What is the goal of internal communication?

For a long time, communication with employees was oriented towards only one goal - to inform everyone what they had to do. Communication equaled instructions, necessary information for the job, safety training, etc.

Today things are different. The exchange of information and knowledge is an essential goal of internal communication, but it's no longer the only one:

1. Sharing information and knowledge: When everyone in the company has the information they need to do their job, it supports decision-making, leads to fewer mistakes, and can promote innovation.
2. Promoting a shared vision: Effective internal communication helps ensure that all employees understand the vision and principles of a company - and how their work contributes to achieving these goals. Examples include HubSpot's Culture Code, Amazon's Leadership Principles, and Apple's Shared Values
3. Employee engagement: Internal communications help keep employees engaged, informed, and motivated. In the next section, we'll examine the vast benefits of high employee engagement. 
4. Building a positive corporate culture: Internal communication can encourage open and transparent sharing, stimulate collaboration and teamwork, and publicly recognize successes.

Why is internal communication important for every company?

The importance of internal communication has long flown under the radar of managers and board members. After all, it's not a direct value-adding element. Therefore, it was long considered more important to find out how to communicate with "outsiders" (i.e., customers). However, some studies now show how crucial internal communication is for companies:

• Good internal communication has been shown to improve trust between staff and managers. This, in turn, has a positive effect on customer relations.
• Internal communication can activate employees' intellectual and creative abilities, improving productivity.
• Good internal communication improves employee engagement.

If you are not yet convinced, you can take a look at the most popular employers in the U.S. and the U.K. at the moment, which are chosen annually by Glassdoor. In addition to salaries and career opportunities, employees repeatedly praise the corporate culture and working atmosphere, as well as good communication in their reviews.

Hubspot, voted as a top employer, has over 2,000 reviews mentioning culture and communication: 

"The company works hard to create and maintain such a great environment and culture but it shows."

"Transparency in company communication from top to bottom. I’ve honestly never worked for a company that is so open and honest in what they’re doing and where they’re headed."

Such ratings don't come out of the blue, of course. The most successful and popular companies have long recognized that investing in internal communications and company culture pays off.

CGI and the Boston Consulting Group also shine through the togetherness within the company. Here, employees comment, among other things: "Incredibly interesting, likeable, and increasingly diverse colleagues. Positive culture and plenty of learning opportunities too." (Boston Consulting Group)

What are typical challenges in internal communication?

When working with our clients, we notice recurring issues:

• Implemented tools aren't used properly.
• Shared information isn't well received.
• Employees feel overwhelmed by the amount of information.

Getting different user groups in the company on the same page is often difficult.

Some common challenges include:

1. Information overload: When too much is communicated, people switch off. Marketing professionals have been aware of this for a long time and are familiar with phenomena such as "banner blindness" - the subconscious fading out of advertising by consumers. Fortunately, unlike advertising, which competes with multiple companies, you are only competing with yourself in internal communication. This means that with the correct prioritization, essential messages don't get lost in the flood of information.
2. Different information needs: Employees have different information needs and preferences. This makes it difficult to develop a single communication strategy that addresses them all. Frontline workers, for example, have much less time to deal with company news than people who sit at their computers all day anyway. Therefore, segmentation and targeting can be helpful by sharing appealing content in a suitable format, such as videos, infographics, or interactive content.
3. Lack of employee engagement: Just because your teams are provided with a new tool for communication - for example, a social intranet - does not mean they want to use it. It's vital, especially initially, to create some buzz. Personal content shared by the company leaders works particularly well, as experience has shown us.
4. Lack of leadership communication: Speaking of content from leaders, if there isn't enough clear communication from the executive board and upper management, this can lead to confusion.
5. Loss of trust: The minute you communicate something, there is the potential for it to become misconstrued. If employees feel that you aren't telling them the whole truth or are deliberately spreading misinformation, this can undermine their trust and loyalty and make internal communication difficult.

Which tools are used for internal communication?

Internal communication tools facilitate exchange within the company - between management and employees and within the workforce. There's a difference between analog and digital tools:

Each tool has advantages and disadvantages. In practice, the key to success lies in combining different tools without creating redundancies or confusing and overburdening staff - it's a balancing act.

What's the difference between internal communication tools and channels?

Tools and channels play an essential role in effective internal communication, but have subtly different definitions and functions.

Internal communication tools are the software or hardware used to enable or enhance internal communication. Examples of tools include Outlook, Slack, Flip's employee app, and the digital collaboration tool Confluence. Tools can also refer to the techniques and methods implemented to achieve specific goals, such as newsletters, training, staff surveys, or feedback sessions.

Channels refer to the different forms of communication used within an organization. Examples of channels are face-to-face conversations at the coffee machine, meetings, phone calls, emails, or social media platforms.

What does an internal communication policy look like?

An internal communication policy is a comprehensive plan or strategy that outlines how a company communicates with its employees and other internal stakeholders.

It includes the methods, tools, channels, and messaging used to communicate information, ideas, and updates to internal audiences. An internal communication policy ensures that all employees are effectively informed, engaged, and aligned with the organization's mission, vision, and values.

A well-designed internal communication policy considers the internal audience's specific needs and preferences and adapts to organizational environment changes.

How can companies improve internal communication?

Whether you already have an existing internal communication policy that simply isn't working, or you're just getting started with the topic - you'll quickly realize that successful communication can't be designed on a whiteboard. After all, it's about the exchange between people - one of the most complex tasks there is. 

Therefore, you should understand internal communication as an iterative process that needs to be continuously improved and adapted to new challenges. Follow these tips for success:

Step 1: Analyze the initial situation

Analyzing the current status quo is the first step toward improving internal communication. This should take into account employee needs as well as the tools and instruments used. 

An employee survey can help to determine how well knowledge transfer works, how credible leaders are perceived, and how satisfied employees are with their employer. Ensure you also record which communication channels are currently being used.

Step 2: Define goals and strategy

From the analysis results, your major challenges can be translated into goals and prioritized. A cost-benefit matrix can help here. Before defining channels, tools, and responsibilities, your communication culture should be defined in writing for all employees to stick to. Your corporate values should be doubly adhered to in management communication and form the framework for all measures.

Step 3: Clarify responsibilities

After defining goals and strategy, who will take the lead in the "improve internal communication" project should be clarified. Clear responsibilities are also needed for each improvement measure. The person in charge should work closely with all managers and pay attention to the different needs of teams.

Step 4: Determine action points

Your goals should now be translated into concrete actions. Different channels such as emails, newsletters, social media tools, or intranet portals can be used. Whatever action points you decide on, it's crucial that your solutions are tailored to the needs and wishes of your employees and that they are regularly reviewed and adapted.

Step 5: Success control

Finally, your actions should be evaluated regularly to determine whether they lead to the desired success. This should also consider which communication channels are most successful and which measures may need to be adapted.

Which success factors and KPIs measure internal communication?

So you've introduced an intranet, established a leadership communication tool, and connected employees through mobile apps and chat facilities - But how can you evaluate the success of your internal communication?

Here are some examples of key performance indicators (KPIs) to measure internal communication:

1. Employee satisfaction: Employee satisfaction measures employees' satisfaction with their work, environment, and corporate culture. Net Promoter Score (NPS) is often used in this context. It indicates how likely employees would recommend your company as an employer to friends. 
2. Reach: Communication reach measures the number of employees who receive and engage with internal communication messages. This KPI can be used to determine how effectively internal communications are reaching employees across the entire organization.
3. Engagement rate: This KPI indicates how employees interact with content on internal social networks. It's often measured in connection with intranets or employee apps.
4. Open rate: The open rate of messages measures the percentage of employees who open and read internal communication messages. This metric can be used to determine how well internal communication messages capture employees' attention and engage them. In short: how well they are received.
5. Feedback rates: The feedback rate measures the percentage of employees who respond to surveys or other feedback requests. This KPI allows you to determine the effectiveness of internal communication by gathering employee feedback and engaging employees in two-way communication.
6. Frequency of communication: The frequency of communication measures how often internal communication messages are sent. This KPI can be used to determine whether the tools and channels implemented are actually being used.

By measuring these KPIs, you can gain insight into the effectiveness of your internal communication strategies and make any necessary adjustments.

What formats work for internal communication?

The best format for internal communication depends on the information type, context, tools, and channels. Let's say you want to share company news on the intranet, internal wiki, or via your employee app - there are a few things to consider: 

No matter if the context is personal or business, people like content in the following formats:

• Images and videos, especially of people
• Short, concise texts with subheadings and visual elements
• Bullet points and numbered lists
• Interactive content 
• Personal insights and opinions

What are examples of successful internal communication?

Check out how leading companies improved their internal communication below, with examples from different industries.

EDEKA stores: real-time communication via app

With 3,700 independent merchants, more than 11,200 stores, and around 381,000 employees, EDEKA is one of Germany's leading food retailers and the largest employer.

McDonald's Germany: humanised digitalization

From printed newsletters in the staff rooms to rosters on the smartphone and mobile employee surveys: Sandra Mühlhause, Chief Human Resources Officer of McDonald's Germany, gives an insight into humanized digitalization via employee app.

toom: cultural change in retail

Without a mission but with an interdisciplinary team, Daria Ezazi, Head of Corporate Communications, started the "Toomunity App" project for toom's approximately 18,000 employees. At EuroCIS, she offered insights into the cultural change that has been set in motion at toom.

Conclusion

There can be no doubt that effective internal communication is vital for every company. Not only because it helps to increase employee satisfaction and motivation but also minimizes conflicts, and ultimately helps your business to run effectively - in good times and in bad.

To ensure your internal communication runs smoothly, create a solid communication policy and implement suitable channels and tools for exchanging information between all levels and departments. If you also listen to the needs and feedback of your employees and regularly adapt your strategy accordingly, you will not only develop a healthy and productive working environment - you will also make your company more efficient and resilient.