Looking inward: How internal branding and communications affect cultural change

In seeking to transform an organization, consultants should be commissioned to create strategies and media for internal stakeholders, as well as for external audiences. Using several informative case studies, William Faust and Beverly Bethge discuss the scope of this type of undertaking and demonstrate the benefits of such inward-focused brand initiatives in the arenas of human resources, organizational development, training, and operations.

When someone mentions the final frontier, we probably think of space exploration. However, many marine biologists would argue that there is a lot more to be learned-and gained-by looking inward and exploring the world's oceans. If we extend this analogy to corporate branding, there is a similar argument to be made that too much attention is spent developing and implementing external messages and customer-facing touch-points, without an equal emphasis on the internal customer-employees.

It is a tough sell, for several reasons. First, companies cannot exist without customers, and if there is any audience that needs to understand and indeed accept a brand, it's the target market. Second, most branding initiatives and their corresponding budgets are controlled by the company's marketing function-whose sole reason for existing is to reach the customer. Finally, it is difficult to calculate a return on investment for communicating more effectively with internal audiences.

Yet it strikes us as odd that the number-one complaint we hear with respect to major branding initiatives-and we all know how many there have been-in the past five years is their inability to effect real cultural change. This article is not meant to imply that internal communications is the sole answer to aligning employees with brand strategy. Other issues, like training, leadership, and organizational development, play an even greater role in this transformation and are beyond the scope of this discussion. However, we do believe that by applying brand design principles to internal communications, large organizations can accelerate the process of changing employee attitudes and, ultimately, employee behavior.

Just how important are internal communications, and how do we distinguish good communications from bad? In a recent study conducted by The Empower Group, a global human resource consultancy, a major European retailer surveyed more than 24,000 employees to quantify the link between communication and issues such as motivation, loyalty, and productivity. One finding examined the link between company-wide communications about such things as vision and mission with employee behavior. The study showed a .60 linkage coefficient between the transparency of communication (visibility) and employees' overall feelings about the company. The net conclusions of the study were twofold:

1. Positive communication creates a highly motivated staff.
2. Good communication has a positive impact on business.
But there's that question again: Just what is good communication? This is no less easy to answer than "What is good design?" We feel the two are linked, and when we use the same kind of criteria to evaluate internal communications that we do for external communications, we see marked improvement in loyalty, morale, performance, and alignment of behavior with corporate brand strategy.

Defining a reasonable scopePerhaps the biggest road block to developing a design-driven approach to branded internal communications is defining a realistic scope and identifying those internal touch-points that matter most in terms of aligning behavior with brand strategy. After all, when one adds up all the emails, memos, manuals, information packets, meetings, workshops, presentations, training materials, intranets, and the like, the volume of communication elements can be staggering. Too many companies atrophy under the sheer weight of these communications and opt to create a single, one-time internal branding campaign to herald the arrival of the new brand strategy.

This type of internal rollout is both appropriate and necessary when rebranding a large organization. However, it should be viewed as only the beginning, in the same way that a new ad campaign might be the first and most visible external manifestation of the new brand in the marketplace. Unfortunately, too many companies stop there-satisfied with a few one-shot internal tools, such as a brand identity manual, corresponding brand manifesto, and perhaps even the business cards, caps, t-shirts, and other promotional items that seem so necessary at the time but quickly become meaningless if not supported by a consistent and lasting employee communications plan. Internal communications must take on the brand's architecture, values, image, and voice in a pervasive and lasting way. However, as with most things, there are some tools that will be more effective than others.

Also reminiscent of an external branding campaign, internal communications simply need to be prioritized in terms of content, audience, frequency, and other variables in order to arrive at an approach that maximizes impact and return on investment. In our experience, there is no single formula to assigning these priorities; rather, it varies from company to company and depends upon the situation at hand. For example, a company experiencing a merger that will affect brand strategy will have very different needs from one that is simply undergoing an evolutionary rebranding initiative. However, several categories of communication are common to most firms and should be considered (figure 1).

We would like to address each of these areas in turn and discuss specific tactics and considerations through the presentation of several recent case studies.

Human resource communications
The Human Resource function is often the first interaction an employee has with a company. This can come through recruiting materials, onboarding tools, and orientation sessions. While it's true that the HR function in large organizations must occasionally deliver negative information, it is more often the bearer of good news as it attempts to reassure employees that they have made the right decision, and that the company is looking out for their best interests. Moreover, it is typically charged with explaining all the benefits and perquisites a company has to offer-training, health insurance, retirement plans, and paid time off. Yet few companies leverage this opportunity to engage employees by communicating with the same voice they use for customer communications. Why not show employees the same love we offer customers? Why not reflect the same brand values and the same brand image? Several human resource directors interviewed for this article stated that when they redesigned their benefits materials to be more engaging and understandable-even though they had not changed the content-employees perceived that the benefits had improved.

One company that understands this is Limited Brands, the multi-billion-dollar retail company better known by some of its individual brand names, such as Victoria's Secret, Bath & Body Works, and Express. In the mid-1990s, Limited Brands (then organized as two public companies-Limited Inc. and Intimate Brands) began to shift to a shared-services model for common functions such as human resources, technology, purchasing, real estate, and finance. The shared-services concept was new to the Limited culture, which historically espoused divisional autonomy and even encouraged competition among its brands for everything from employees to customers. It was clear that communicating this new policy would need to be carefully orchestrated so that employees would perceive a net improvement or, at worst, status quo. This would be challenging, given that an internal audit had revealed several potential hurdles. First, no two divisions had the same benefits plan, and indeed, some employees would have to compromise under the new plan. Second, in many cases the marketing departments were actually responsible for creating the benefits manuals and, not surprisingly, many of them were out of date, raising legal concerns.

Limited launched the new policy via a unique communications tool called The Guide(TM). At its essence, The Guide was simply a comprehensive catalog of all the consolidated employee benefits. But it was created using the metaphor of a fashion magazine-oversized, glossy, with full-page ads from each retail division so that individual brand identities could be showcased. Since no clear corporate brand language existed at the time for the parent company, The Guide was a visual and verbal amalgamation of the dozen or so retail brands to which it spoke, a paper mall aimed at a young, primarily female audience, most of whom were not located at a corporate office but rather in stores across the country. In addition, The Guide was launched like a new fashion magazine, with an internal teaser campaign that included postcards, posters, and other mailings to each associate (figures 2 and 3).

The Guide was one of the most successful internal communications campaigns in company history. For the next several years, it took on such a strong role in company communications that associates referred to it as if it were a brand unto itself. Supplements to The Guide were branded with the same verbal and visual elements so that they would be linked to the original in a strong way.

In mid-2002, The Guide was due for reprinting, and it was relaunched with some interesting changes. The two parent companies had since merged again, forming a new entity, Limited Brands, and a conscious corporate brand identity had been created for this public company. Thus version two of The Guide took on the new corporate brand image, which was still fashion-oriented but much more sophisticated and refined. Individual brands still had presence, but in a more subtle way. In addition, The Guide was redesigned in a smaller format to fit in file folders and briefcases, though it retained its "magazine" feel. (Some described it as a shift from Women's Wear Daily [a tabloid format] to Vogue.) Separate color-coded versions were created for store, corporate, and part-time distribution-center associates.

The second version of The Guide was launched as successfully as the first and met with tremendous employee acceptance. More important, it communicated to employees using the same image and voice the company used to communicate with customers and shareholders, helping to communicate the brand values of a large and diverse corporation (figures 4 and 5).

Organizational developmentThe second area in which brand design can affect internal communications is corporate change. By this, we refer primarily to mergers, acquisitions, sweeping policy changes, and large restructurings and downsizings. While it's easy to espouse the philosophy that all change is good, most broad change initiatives in large corporations are viewed with trepidation and anxiety by employees, regardless of the potential for a negative outcome-real or imagined. Communication is key. Without continuous and carefully orchestrated communications before, during, and after a company-wide shift, employees will create their own reality-generally negative-and will spread it via word of mouth throughout the organization. Managers can ill afford to ignore the fact that a communications void will be filled with rumors of layoffs, firings, loss of benefits, or other disasters-even the company's imminent demise.

There has been a tremendous amount of study and documentation regarding communications and corporate change, and it is beyond the scope of this discussion to review that literature in detail. Our focus is on situations in which a corporate branding initiative and some major policy change or restructuring intersect for the common good. One such situation occurred at Bank One Corporation in 1999. At the time, Bank One was the fifth-largest bank holding company in the United States, with more than 2,000 retail branches. It was in the midst of a company-wide rebranding program, as well as a pending merger with like-sized First Chicago NBD Bank that if approved would result in an organization with more than 90,000 employees. As regulators were reviewing the merger, Bank One's Information Technology group was busy preparing for many changes associated with the upcoming Y2K event. One such initiative was a planned standardization of all computer desktop configurations. This program would affect more than 30,000 employees by changing the software, and in some cases hardware, with which they worked on a daily basis.

The information technology managers responsible for the desktop standardization program were already beginning to communicate with those employees who would be affected. The process would occur over a six-month period that included logistics planning, training, change-out, and troubleshooting. However, the IT managers had not yet learned about the corporate branding initiative. Without realizing it, they were using vocabulary that was inconsistent with any tenets of the new brand strategy, which was focused on approachability and simple communications. Words and phrases like deployment teams, conversion windows, feedback loops, and compliance made the program sound more like a military operation than something that was going to help employees communicate more efficiently across the company.

Bank One seized the moment and brought together managers from marketing-who owned the branding program-and IT. After a review of both programs, it was determined that the IT initiative would take on the visual image and tone of voice of Bank One's emerging brand strategy and that furthermore, this would serve as a demonstration project prior to launch. It was also determined that the IT project could benefit from a unifying theme-one that conveyed a positive attitude about the change, without seeming trite. After a brainstorming session, the metaphor of a road trip was adopted as the theme, and the program was renamed Route One (figure 6). All communications materials took on a look and feel that was derived from Bank One's new brand toolkit but that also reinforced the highways and byways theme. Schedules became route maps; memos became postcards from the road, and training materials became Ride Guides and Starter Kits (figure 7). The campaign included posters, internal mailings, and a trouble-shooting guide that was designed to look like a car owner's manual.

From the printed materials to the Route One shirts worn by the banks' technicians, every detail was crafted to reflect the theme, without being overdone or gratuitous. Over approximately a six-month period, more than 30,000 computers and related equipment were converted-without the major cultural backlash that could have resulted from the company's mandatory change.

Training
Another area of opportunity in which to link branding with internal communications is training. While this area too has been intensely studied and well documented, it is an ideal communications channel within large organizations to leverage brand values and brand identity-for several reasons. First, training is typically interpreted as a positive thing. The goal is for people to enhance their skills and knowledge and somehow better themselves and their position in the company. Second, training generally occurs in smaller groups, where communications are more intimate and controllable. And third, studies show that when training content is conveyed through engaging and interactive learning tools, it is retained longer and in more depth than when more conventional means, such as lectures, are used. Injecting corporate branding principles in training tools and techniques will not only reinforce the brand values but is also likely to make the training more effective and meaningful.

In late 2002, QSP-a division of Reader's Digest Association and a leader in school fundraising programs-identified the need to enhance its sales training and orientation program to reinforce the company's vision, create an image that was engaging, and reassure new sales associates that QSP was a great career choice. All of QSP's sales associates-more than 400 people-are dispersed across the country in order to be close to the schools that make up their customer base. As such, their most intimate connection to the company vision and message is through regional meetings and periodic training sessions.

This case study is interesting because QSP's training organization made a conscious decision not to extend the visual aspects of its outward brand image to the internal communications program. Instead, they developed a new visual language that leveraged the company's brand values and external tone of voice. This decision was driven by several factors. First, the market-facing brand image for QSP was somewhat fragmented visually, and certain decisions about brand architecture and visual brand language were in flux due to recent acquisitions and the addition of new product lines. Second, QSP's external brand language reflected almost exclusively its core customer base-schools representing all age groups. Thus a new, more sophisticated visual language was necessary to communicate to the sales force, whose ages ranged from 25 to 55. School imagery needed to be incorporated, but not in an overwhelming manner.

To tie elements of the training program together, a campaign theme was developed with a corresponding visual and verbal language. The theme-Surround Yourself-was a reference to the tools, techniques, and products with which QSP surrounded its sales force. A 360-degree symbol (figure 8) was created to identify all forms of training communications, from the flagship Training Toolkit to all the printed and electronic correspondence originating from the training department (figure 9). These primary identifiers were supported by a color palette, type font, graphic layout and grid guidelines, and standards for photography. Thus, while the campaign was not considered a stand-alone brand by the company, it was implemented and managed like one. As of this writing, the program was just being rolled out, so no results are available, but QSP management was optimistic about the impact it would have in creating a deeper connection between a decentralized sales force and the overall company mission and vision.

OperationsOur last example was launched in early 2003. Big Lots Inc. is the largest closeout retailer in the United States, with more than 1,100 stores nationwide. Closeout retailing is a unique variant of discount retailing, in which companies specialize in discontinued merchandise and liquidation. Shopping at a closeout store can be a bargain but also a treasure hunt, because merchandise is often inconsistent from week to week. Like many retailers, Big Lots grew organically and through acquisition, and by 2001 it found itself on the verge of becoming a national brand with stores from coast to coast. However, it actually operated under several different names and identities, so the company decided to embark on a company-wide initiative to create a single master brand-Big Lots-and a clear positioning. This strategy was announced externally with a new national advertising campaign and a prototype store design. The brand identity was updated, and one of the strongest identity elements became the color orange, which was only an accent in the logo but took on greater significance in things like signage and store decor.

The brand strategy was communicated internally through a few one-time communications, including a video, regional manager meetings, and the company-wide newsletter. But Big Lots saw an opportunity to leverage their Associate Handbook, a fairly dry, operations-oriented manual, to carry the new brand message in an engaging way. This booklet was distributed to every company employee, and it represented an opportunity to combine basic policy information with the new brand image. It was viewed as a key tool to shift associate attitudes and give them a sense of belonging to something unique. Big Lots management felt that this shift would reinforce behavior changes that were being introduced via new training and incentive programs.

The new handbook was designed to incorporate a unifying theme: Look at the World Through Orange-Colored Glasses. This variant on the old saying leveraged the color orange in yet another way and was played out not only though introductory copy that reinforced the brand strategy but also through engaging photos of real staff, real executives, and real customers playfully wearing paper glasses with orange lenses (figure 10). The remainder of the handbook leveraged orange as a design element and used inspirational call-outs to balance the sometimes dry, factual text (figure 11). The handbook was successfully launched to all employees and by all accounts has been very successful in extending the internal branding campaign.

The design consultant's roleWhether you are a design consultant or a corporate design manager, how many times have you heard someone say the following about internal communications: "That looks too nice, people will think we spent a lot of money on it?" This is a common sentiment. The sad and ironic implication here is that large companies care only about customers and would not consider investing time, money, or even much thought in improving how they speak to their most important asset: people. While it's true that this is a pervasive view, the preceding case studies show that some companies are finding value in taking a marketing-oriented approach to communicating internally by applying branding and design thinking. And we are certain that there are many other recent examples that simply have not been documented because of the confidential nature of the information or other valid reasons. Design consultants are in an ideal position to help corporate design and communications managers plead their case. They might also be able to debunk several myths about internal communications:

Myth 1: Employees don't careWhy would this be the case? Employees are people, just like customers. They have emotions and want to be valued. They want to be recognized. Every human resources department knows this, but typically they are not linked to the people in their company who know how to build brands and communicate with customers.

Myth 2: Good design is expensiveWe all know that this does not have to be the case. If good design is the objective from the beginning, it should cost no more than... well, bad design. Good design is consistent branding and simple communications. It is well-conceived information design with a theme, not expensive paper and four-color printing.

Myth 3: It sends a bad message to shareholdersThat we care about our employees? Most shareholders will respect and invest in any company that can align its employees' behavior with strategy. They also might forgo a glossy annual report in favor of better employee communications that would lead to improved performance and shareholder value.