Overall Measurement and Research Imperative Tie to Integration Across Business Units

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Overall Measurement and Research ImperativeTie
to Integration Across Business Units

• Chuck Lear
• Electronic Communications Manager - Corporate
  Relations
• Allstate Insurance Company
• January 19, 2000

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Real World Concerns

• How do we avoid getting taken over?
• How do we recognize our next competitor?
• Is our company getting sufficient return on its
  investment in employees?
• How do we survive, thrive and grow?

3
The Real World

• Its an environment of consolidation,
  cost-cutting and hyper-competition that leaves no
  room for failure
• So what are the answers?

4
Possible Answers

• Service?
• Products?
• Knowledge?
• Communication?
• Education?

5
Role of Communication

• Communication will be one critical leverbut not
  the only one
• Our shared job reaching heartsand minds

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Role of Communication

• Business is about touching people
• --Peter Drucker
• Communication becomes a strategic tool
• Involve employees fully in the work of satisfying
  customers and generating profits

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Communication Measurement

• Management effectiveness
• Innovation
• Empowerment
• Education/Training
• R D

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Communication Impact

• Changes in non-financial performance impact share
  price

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• To claim that tangible assets should be measured
  and valued, while intangibles should not or
  could not is like stating that 'things' are
  valuable, while 'ideas' are not.
• Baruch Lev Professor of Acctg. and
  Finance Stern School of Business

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Employee Commitment

• If we have commitment -- we succeed
• If we dont -- we fail
• Our Goal
• Common measure of employee effectiveness

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Our Role as Strategic Communicators

• Influencing commitment
• Pulling levers of pride, trust, personal values
  and beliefs
• Strategic communications are
• informing
• influencing
• reshaping the actions of employees

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Two Key Learnings

• Commitment is the essence of employee
  effectiveness.
• commitment map
• Communication is a key driver of profitability.
• profit impact model

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Measurement Supports Strategy
Audience Measurement (ongoing)
Execution
Strategy
Assessment Adjustment
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Allstate Communication Process Flow
What information (program / initiative) do you
need to communicate?

Who needs to be involved in the communication
process?
Who are the target audiences for
this information?
What results do you want to achieve from the
communication?
1 2
3
4
When do they need to get the information?
What are the most effective ways of delivering
this information / message?
How will you measure your results?
Proof your communication message...
5 6
7
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• REQUIREMENTS
• Timely
• Clear
• Concise
• Candid

Create vehicles and deliver message(s)...
Improve the process based on measurement and
feedback...

• Continuous
• Credible
• Two-Way

9 10
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Allstate Communication Continuum
Key Messages
Business Results
Communication
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Commitment Map
Prior Experience and Skills with the Company
Positive Attitude I think I can
Tools Resources
Personal Values/Beliefs
Rewards Recognition
Trust
Pride
Commitment by Choice
Commitment by Necessity
Drivers of Acceptance/Rejection
0
100
Return on Investment
When all the drivers are in place along the
continuum, employees become more accepting of the
organizations messages and initiatives. As
employees become more committed, return on
investment increases. This model promotes 100
commitment and 100 return on investment.
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Detail of Drivers
Prior Experience and Skills with the Company
Positive Attitude I think I can
Tools Resources
Personal Values/Beliefs
Rewards Recognition
Trust
Pride
Set of values which a person brings to the
workplace
Other changes the company has initiated and how
the employee has experienced that change. Also,
the skills the employee has learned with the
company
How much the employee trusts the leadership of
the company to initiate change and make it
succeed through implementation
The pride an employee feels toward the company
provides for the rallying behind it during
change
If the employee has a positive attitude about
implementing change himself, he will adapt his
behavior to help the company succeed
The company must give the employee the tools and
resources needed to help change behavior
The company must continue to reward and recognize
employees when they change behaviors and to
motivate employees to adapt and change
Drivers of Acceptance/Rejection
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Discretionary Effort

• contributing ideas
• taking well considered risks
• sharing knowledge
• collaborating -- Daniel Yankelovich

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QLMS

• Extent to which employees are treated with
  respect and dignity
• Responsibility and authority to deliver customer
  focused quality
• Company concern about how business decisions
  affect customers
• Companys commitment to keeping customers

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QLMS

• Overall satisfaction with Allstate
• Confidence in the local management team
• Extent to which company gives the straight story
• Frequency of manager meeting with employees to
  discuss performance

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QLMS questions

• To what extent can you have an open conversation
  with your immediate manager/team leader on any
  work-related topic?
• How effective is your immediate manager in
  communicating company information thats relevant
  to your work group?
• To what extent do you have access to information
  that you need to do your job?
• To what extent do you get information in a
  timely manner to help you do your job?

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Our Second Key Learning

• Communication is a key driver of profitability.
• profit impact model

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Conceptual Profit Impact Model
Profits

• Corporate Messages
• Initiative Messages
• Employee Selection
• Development

Overall Employee Effectiveness
Market Forces
Internal Communication

• QLMS Results
• Supported by correlation research

Environment
Market Forces

• Economic
• Competitive
• Demographic
• Meteorological

Financial Results

• Customer Retention
• Expense Ratio?
• Premiums Written?

• Corporate Messages
• Initiative Messages
• Advertising
• News/Media
• Word of Mouth

Overall Customer Satisfaction
Market Forces
External Communication

• CSMS Results

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Profit Impact Model (In Use)
Profit Sharing Initiative
Overall Customer Satisfaction
Overall Employee Effectiveness
Financial Results
Data Source

• Customer Retention

• QLMS Results

• CSMS Result

• Dummy Variables (0 or 1)
• Participation ()
• Dollars Vested ()

38 point improvement in employee effectiveness
10 point improvement in customer satisfaction
2 percent increase in customer retention
Improvement in trust communication index
Estimated Relationships
1 point improvement in employee effectiveness
0.3 point improvement in customer satisfaction
0.05 percent increase in customer retention
(2 point improvement?) in communication index
Hypothetical Effect
35 million net present value
4 million annuity
OR
SOURCE For employee satisfaction and customer
satisfaction ratio, Sears Employee Customer
Profit Model. For customer satisfaction and
retention data, Personal Lines Finance and
Finance and Planning estimates.
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QLMS question

• To what extent do you think Allstate is a
  company currently committed to providing the best
  service to customers?
• Most of the workforce (80) think Allstate is
  currently committed a great deal or quite a
  bit to providing the best service to customers.

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QLMS question

• To what extent do you think Allstate will be
  making changes in the next two years to better
  serve customers?
• Most employees think Allstate will make changes
  in the next two years to better serve customers
  a great extent or quite a bit.

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QLMS question

• How do you feel about the current direction of
  the company?
• More than half (54) of those surveyed said they
  feel very positive about the current direction
  of the company.

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• And over 80 expressed high level of trust in
  management at the top of the organization.

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Process to Build a Measurement System

• Look for existing successful and respected
  measures within the company
• Financial
• Consumer
• Employee
• Industry

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Form Partnerships

• Work with existing groups within your
  organization to explore relationships for
  combined measurements systems
• All of these groups have measurement systems,
  look for the common points of contact

Communication
Finance
Marketing/ Advertising
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Determine Values

• Work with Finance group to determine the
  financial value of your Marketing, Advertising
  and Communication actions.
• Use the values to support business growth and
  success.

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• The only irreplaceable capital an organization
  possesses is the knowledge and ability of its
  people. The productivity of that capital depends
  on how effectively people share their competence
  with those who can use it.
• -- Andrew Carnegie