An Outside Perspective: Looking Internally at Communications

1. An Outside Perspective:Looking Internally at Communications Tom Petersen Presentation to the National Association of Cancer Centers Development Officers May 4, 2008

2. The Unique Attributes of Internal Communications • Why is internal communications important? • How does it work? • How do we do it better? • How do we deal with special situations? • Organizational changes • Business issues • Crisis communications • Rumor mill • Unique issues for matrix organizations • 5 tips to improve your internal communications What are your greatest issues with internal communications?

3. Tom Petersen • Currently Director – Communications for ITC Midwest • Subsidiary of ITC Holdings Corp. (NYSE:ITC) nation’s largest independent electric transmission company • Until December 2007, was Director – Corporate Communications for Alliant Energy • Vertically-integrated electric and natural gas utility serving 1 million customers in Iowa, Minnesota and Wisconsin • Former public relations agency assistant vice president and account supervisor • Former newspaper reporter • Former congressional campaign staffer • Husband of a Hodgkin’s survivor Tom Petersen Director – Communications ITC Midwest 201 Third Avenue SE, Suite 300 Cedar Rapids IA 52401 (319) 297-6793 tpetersen@itctransco.com

4. The Role of Internal Communications • Internal communications is critical to achieving organizational goals • Internal audience needs to know what’s going on for their own purposes: • So they know how to make the decisions that align with company direction • So they know what tactics need to be done so they can perform them • So they can decide their level of commitment to the organization • Internal audience needs to know what’s going on because they are a critical channel to external audiences • Formal contact (customers, regulators, vendors) • Informal contact (family, neighbors, community)

5. How Internal Communications Works • Internal communications is a big mystery to many organizations • “Why didn’t employees know that?” • “Why don’t they ask questions if they don’t know?” • “Why don’t they believe us?” • “Why don’t they do what we want them to do?” • “Why do they continue to spread rumors that aren’t true?” • “Why do they complain?” • “Why do they hate us? (We pay their paychecks!)” So easy to fall into the “us vs. them” mindset

6. Revisit Maslow’s Hierarchy Opportunity to work for a great cancer center Self-actualization Self-esteem, confidence, achievement, respect of others, respect by others Esteem Friendship, family, sexual intimacy Love/Belonging Security of body, employment, of resources, of morality, of the family, of health, of property Safety Breathing, food, water, sex, sleep Physiological

7. Revisit Maslow’s Hierarchy Morality creativity, spontaneity, problem solving, lack of prejudice, acceptance of facts Self-actualization Self-esteem, confidence, achievement, respect of others, respect by others Esteem Friendship, family, sexual intimacy Love/Belonging Security of body, employment, of resources, of morality, of the family, of health, of property Safety Breathing, food, water, sex, sleep Physiological

8. Communications: The Basic Process At its most basic, communicating is a simple process with three major elements (Sender, Communicating, Receiver) that results in Receiver taking Action for Results. Improving communications means addressing the performance and performance gaps of these steps in the process. Filters Sender (Customer) Channel (format) Message (content) Frequency (volume) Receiver (Audience) Action Results Feedback

9. Next Steps: Unpacking the Communications Process Y = f(x) Sender (Customer) • Who is the Sender? • Is the Sender credible to the Receiver? • Can the Sender cut through Receivers’ filters? • What channel/medium should we use to communicate strategy that will generate Receiver understanding and correct action? • How should we package the message that has the right impact on Receivers? (How do we define the issue for the Receivers? Not the “what” but the “how”?) • How often should we communicate the message? Channel (format) Message (content) Frequency (volume) These are the controllable variables on which we can focus

10. Next Steps: Unpacking the Communications Process Y = f(x) Receiver (Audience) • How do we define the Receiver? All employees? Managers? Opinion Leaders? • What are Receiver’s felt needs that communications can address to ensure those needs are met? • What are constraints that prevent Receiver from receiving the information? • What action do Receivers need to take upon receiving the communications? • How is that action defined and measured? Filters Action

11. Next Steps: Unpacking the Communications Process Y = f(x) Results • What are the customer desired results? • How do we measure the effectiveness of communicating in order to drive results? • How would changing communications improve results? • What is the role of Receiver feedback in this process? • How should we use feedback to improve communications? Feedback

12. How Do We Make it Better? • Figure out where your gaps are and fix them • Understand the variables you’re dealing with (Cause and Effect Diagram) • Determine which variables are most likely to break (Failure Mode Effects Analysis) • Use secondary research to determine best practices for key variables • Develop action plan • Implement • Evaluate • Continually refresh and reinforce communications to improve effectiveness Not going to use this for every communications, but focus on your most important and you’ll get better at routine communications, too

13. Sender Channel Message Frequency Receiver Feedback Communications Variables Frequency Receiver Sender How often (in sender’s eyes?) How often (in receiver’s eyes?) Aggregate # Space b/w communications Likeability Credibility Understandability Access Attention Availability of time Timeliness Accessibility Credibility Preference Accuracy Efficiency Visibility “Embraceability” Actionable Interesting Accuracy Context Clarity Availability of Feedback Feedback Channel Message

14. Dealing with Special Situations • Organizational changes • Business issues • Crisis communications • Rumor mill

15. Special Situations: Organizational Changes • Examples: “Big news” (mergers, layoffs, executive changes, etc.) • Challenges: • So many stakeholders to tell, employees often get last treatment • Information leaks out before you’re ready • Recommendation: • Have someone assigned explicitly to be the employee advocate in your communications planning – frame the communications for employees • Lead with the human element • Consider a new channel to demonstrate importance of issue • Coordinate and align with other, ongoing communications • Messages need to be crisp – but pertinent to employees (Leading Change, by John Kotter)

16. Special Situations: Business Issues • Examples: Organization direction, regulatory or financial developments, operating changes, etc. • Challenges: • May not be intuitive that employees need to know • Issue may not affect employees’ day-to-day activities • Information leaks out before you’re ready • Recommendation: • Assume you need to communicate business issues to employees – first mover advantage • Use channel commensurate with nature of communications

17. Special Situations: Business Issues • Traditional model is communicate “from the top” to demonstrate corporate support, reinforcing through managers and materials • Quality of communications trails off by the time it gets to employees • Larkins’ model is to communicate directly to front-line supervisors (bypass middle management) so employees hear from immediate supervisors Model: Direct to Supervisors (Communicating Change: Winning Employee Support for New Business Goals, by TJ and Sandar Larkin) CEO Senior managers Middle managers Middle managers Supervisors Frontline Employees

18. Special Situations: Crisis Communications • Examples: Traumatic event, employee malfeasance, etc. • Challenges: • Will undoubtedly catch you off guard – can never anticipate what or when • Time is your worst enemy • Overwhelms the system • Tendency to circle the wagons and pull up the drawbridge • Recommendation: • Don’t forget employees – they see crisis as “moment of truth” • It’s 25% plan, 75% practice • Lead with the human element • Be disciplined enough to define audience, message and the facts • You get points for speed

19. Special Situations: Rumor Mill • Examples: Organic or intentional information that moves informally through the organization • Challenges: • Can’t identify where it started or where it is at any time • Tendency to want to wait, hoping it will go away • Executives often respond emotionally, rather that looking at why • Recommendation: • Make an analytical decision – something that needs a response? • You get points for acknowledging what’s on peoples’ minds • Best bet: Proactively seek out what the rumors are (personally, not passively) • If you’re really good, you can use the rumor mill to your benefit (No, really!) Any other situations you have to deal with?

20. Unique Circumstance: “Matrix” Organization • The challenge of having shared employees • Challenges: • Lack of identity with organization, let alone loyalty • Conflicting messages with other organizations • Channel challenges • Others? • Recommendation: • Create affiliation • Give credit/Document contribution • Create a visual connection • Lead with WIIFM • Pursue employees (use values to appeal to self-identity/self-concept) • Others?

21. Improving Your Internal Communications: Tip #1 • Answer the question, “What’s in it for me?” • Always, always, always communicate what your audience wants to hear, not what you want to say • Assume that people don’t care what you’re talking about – and figure out what in your message they care about • 90 percent of the challenge of breaking through the clutter is eliminated if you are talking about something employees are already thinking about • For the receiver, it’s all about proximity No matter how good you think you are at this, you can always do better (How to Win Friends and Influence People, by Dale Carnegie)

22. Improving Your Internal Communications: Tip #2 • Match the approach to the content • When communicating values, make it tangible • When communicating facts, be visual • When communicating emotional news, show empathy • When communicating vision, be consistent • When communicating urgency, communicate quickly • When communicating optimism, smile! How you say it is more important than what you’re saying

23. Improving Your Internal Communications: Tip #3 • Find the right messages and stick to them • Core messages are gold – • They sort out what to say and what not to say • They provide framework for communicating • They force you to make decisions • They promote consistency of communications • If you have the luxury to do it, test your messages first to be sure they answer the Receiver’s WIIFM question

24. Improving Your Internal Communications: Tip #4 • Avoid the temptation to tell everyone everything • There’s always an urge to share lots of information that someone thinks is important • But don’t forget Tip#2 – WIIFM? • There is such a thing as too much communications • Telling everyone everything means nothing will get through • Find the right channels to segment information

25. Improving Your Internal Communications: Tip #5 • Move from Repetition model to Interest model • Ignore the “7 times” guideline • Instead, focus on cutting through the clutter • SUCCESS(“Made to Stick: Why Some Ideas Survive and Others Die,” by Chip and Dan Heath) • Simplicity • Unexpectedness • Concreteness • Credibility • Emotions • Stories

26. Discussion Tom Petersen Director – Communications ITC Midwest 201 Third Avenue SE, Suite 300 Cedar Rapids IA 52401 (319) 297-6793 tpetersen@itctransco.com