If you want to improve differentiation, you should improve internal communication!

Employees is the only point of differentiation


As globalization, technology and opening up of markets to competition change the way we do business, the only remaining point of differentiation and competitive advantage is potentially the employees of an organization. In an industry, letʼs say banking, all players can get access to capital for investing, they can get access to similar technology, offer similar products and target the same customer segments. What remains? The employees way of working to provide a unique customer experience, guided by a strong culture of the organization.

Culture is often misinterpreted as something soft and ʻnice to haveʼ, but organizational culture is actually the core of how a organization operates. Culture sets the norm for how decisions are made and implemented, how people interact with each other and how information flows. In the end it determines exactly how customers are served their experience. These are all “hard” things that have a direct impact on how the business operates and how the organization is perceived by itʼs stakeholders. Differentiation and branding hence starts and ends with employees behavior.

In an competitive industry such as banking or mobile telecom, many players have invested heavily in upgrading technology, service infrastructure, external branding and marketing to become more competitive and strengthen their differentiation on a crowded market. They also invest heavily in developing their employees by training skills, customer service and leadership. But how many are investing in developing a unique culture and engaging employees in living this culture? And how many are actually working structured to aligning employee behavior to what customers can come to expect from marketing messages and ʻbrand promisesʼ? Employees have the power to either reinforce or break a brandʼs promise every time they interact with a customer, shareholder or even another employee.
Because of that, you canʼt build and sustain a differentiated brand externally if you donʼt start with your employees, building your brand from the inside out.

Itʼs more than nice words on a poster in the elevator

Most companies have a list of core values as guide for employees on how we work and how we serve customers. There might be two areas to improve:

  1. How well those values reflect any real competitive advantage of the company
    A value statement should reflect who we are and what we do uniquely on the market. If we use the same values as all other to guide our operations we will end up as an undifferentiated commodity.
  2. How well leaders and employees live by those values in actual life
    Too many value statements are developed by staff functions or consultants without ever touching operations other than as nice decorations.

Internal communication is our life-line

The tool we have in order to improve the above points is essentially communication. Employees only change their behavior when they see tangible evidence that the values are infused into the way the business is operated. These messages can be communicated to employees in many ways:

  • By how we recruit and promote people for making results and living values. Many companies are starting to hire people for attitude and values, and train for skills.
  • By how we train people to give them the tools and skills to live the values every day.
  • By performance management where living values gets incorporated into the performance appraisal systems.
  • But most importantly by management and company leadership that practice and ʻpreachʼ the corporate values as often a possible.

Increase the amount of communication, not the amount of information

Although they share the same ending, itʼs a misconception that communication is the same as information. Information is a activity with a passive listener at the other end. But employee communication is not a one-way street. Communication is a process where both parties must be actively involved. Leaders on all levels in the organization have a key role in this form of communication since they mostly rely on face-to-face communication which is the most effective 2-way format that also build trust and belief.

The first step

As conclusion, the most important improvement in order to strengthen differentiation and brand strength, is to improve how the organization engages itʼs employees in articulating and sharing a unique set of values. But there is a risk in many organizations that this area is falling between chairs; it doesnʼt belong to marketing department since they work on branding and positioning towards customers; it doesnʼt belong to HR since they focus mainly on competence development and it doesnʼt belong to Corporate Affairs or PR team

The starting point for should be to discuss and decide who should be driving integrated internal communication with employees, to ensure that a strong and differentiated corporate culture can develop and grow that is inline with external brand promises.