Events in Nevada over the past three years shone a bright light on how net energy metering (NEM) has affected the evolution of distributed energy resources (DERs). Or would it be more accurate to call it the DER revolution?

Nevada: an insightful perspective. In December 2015, the Public Utilities Commission of Nevada (PUCN) cut NEM compensation by about one-third and instituted a monthly fixed charge. This new policy applied to both new and existing NEM installations, virtually all of which were rooftop solar photovoltaic (PV) panels.

This decision significantly decreased NEM compensation while it also extended the payback period for a rooftop system. The consequences were quick and monumental. Immediately, the top three solar installers in the state announced their intention of moving to more “business friendly” states. It came as no surprise when rooftop solar installations dropped 92% in first quarter 2016. Nevada, once a darling in the solar sector, became a virtual wasteland.

Until the PUCN reversed itself.

Late in 2016, the Nevada governor appointed two new commissioners to the three-person PUCN. That new commission reinstated the original NEM rules. Then last year, the Nevada Legislature passed bill AB 405 that reinstated NEM compensation for residential solar projects at 95% of the retail electricity rate. The bill also contains numerous other consumer protections, ensuring the bill’s reach for at least 20 years. At its essence, though, AB 405 guarantees consumers the right to self-generate electricity. The bill’s passage not only resuscitated the state’s moribund solar industry, but also created a boon for potential energy storage system (ESS) installations.

So, let’s summarize. NEM active; rooftop solar DERs soar. NEM revoked; DERs grounded. NEM reinstated; DERs take off again. And this doesn’t even account for the state and Federal tax credit incentives. As a policy tool, NEM has wielded enormous power since its first passage in 1983. As a result, DERs are experiencing an annual, unabated 20% growth rate.

What hath NEM wrought? Over the past 35 years, NEM and the influx of DERs have caused a tremendous upheaval in the energy industry. Here are just a few.

Integrated Resource Planning. It used to be that resource planning focused on central station firm generation sited to facilitate a one-way transmission and distribution system. High capacity factors better ensured reliable energy delivery. Contemporary resource planning, however, is undergoing a wholesale transformation influenced by a number of aspects:

• Integration of variable, large-scale and distributed renewable generation with its decreased reliability, lower capacity factors, and uncontrollable “fuel”.
• Inadequate modeling tools.
• Expensive battery energy storage.
• Grid modernization considerations.
• Two-way transmission and distribution (T&D) systems.
• Load-eroding drivers.
• Legislative and regulatory mandates.
• Communication and transparency challenges.

Cost and benefits of rooftop solar. This is a controversial topic, to say the least. Utilities assert that NEM customers use the T&D network and require energy when their panels aren’t generating power, yet are not paying for it, all while receiving retail rates for their power. This unfairly shifts costs to non-NEM customers. Solar advocates contend that a number of factors (utility incentives, RPS policies, reduced T&D costs, fossil fuel price hedge) actually make this cost-shifting argument moot. Indeed, a 2014 report conducted by PUCN concluded that NEM actually benefited non-NEM customers. It’s no surprise that actual costs and benefits vary widely, and depend on numerous factors.

Utility of the Future. The proliferation of DERs has challenged the basic utility business model. Must the utility business model of the future align with public policy goals and customer electricity needs?

At its core, the challenge focuses around the potential for unbundling the energy services that utilities provide. More and more, some of these services are being provided at the “grid edge” where customers manage and use energy—such as self-generation. As energy storage prices fall while their capabilities rise, DERs will continue to grow as will the prospect for grid defection.

A transition to the utility of the future model is already underway. For example, the two largest utilities in New York, Con Edison and PSEG (both essentially “wires” companies), instituted a Utility of the Future department three years ago. Why? Put simply, to better align with the state’s Reforming the Energy Vision (REV) goals of a 40% reduction in greenhouse gas emissions, half the state’s generation from renewable resources, and a 23% reduction in energy consumption—all by 2030.

One thing appears certain: DERs are here to stay. How the utility of the future evolves remains to be seen.

—Rich Maggiani

He took my arm firmly, pulling me aside for a private conversation. I had been standing in a small circle with colleagues, talking, at a business organization meeting when he accosted me.

“So,” he started. “I understand you work with electric utilities.” More of a question than a statement.

It all happened so suddenly that I just looked at him. “Have we met?” I asked, mainly to gather myself.

“No,” he said, then introduced himself. I returned the favor.

“I know who you are,” he continued. “You used to sit on an energy-related committee with my wife.”

“And she is…” I ventured.

He told me. Different last name. But now I understood the connection. They modernized older properties, and one of their initiatives is to lower the energy requirements of the buildings by integrating renewable resources and energy efficiency measures.

“Ah. Yes, I work with electric utilities.”

“Around renewable energy?”

“Mainly around integrating more renewable resources into the electric grid.”

“So you know a lot about rooftop solar photovoltaic panels?”

I nodded, and started to smile. I had a good idea where this was going.

“And net energy metering?” his questioning continued.

I nodded again. “Yeah, I’ve written a bit about NEM.”

“Well…” he began, pausing a bit and leaning in. “I’m starting to get some push back from my neighbors about my solar panels. And my electric cooperative says I can’t expand my solar array.” He named the coop. “And I don’t understand why.”

Coincidently, a few months earlier, I spoke with the President of that cooperative, so had some precise figures.

“I’m not surprised about the cooperative,” I said. “They’re already at 12% penetration.”

“What does that mean?” he asked.

“It means that 12% of their customers self-generate from rooftop solar panels.”

“Well, isn’t that good?” he asked.

“Yes,” I replied. “It’s good to increase generation from renewable resources. But, the state only required utilities to accept up to 4%, and your coop already has three times that amount. And they are beginning to have trouble managing it, and seeing more of the cost inequities.”

He looked at me for a bit. Then, leaning back, he said, “I can see I’m not going to get any sympathy from you.”

I smiled. “Is that why you pulled me aside; you wanted my sympathy? I’m just being a realist here, giving you facts.”

He harrumphed. “Then give me some more facts.”

“Okay.” I said. “Can you tell me how NEM works for you?”

“Of course. I self-generate, use what I generate, and send the extra to the grid.”

“Do you get extra generation every day?” I asked.

“Most days.” he stated.

“What happens on really cloudy days, or when it rains? Or snows?”

“Well, I generate less. But over the long term, I generate more than I use.”

“And when it rains, or snows, or is cloudy, or at night, you have electricity?”

“Of course,” he said. “I always have electricity.”

“So you are using the grid’s transmission and distribution system?”

“That’s how I send and get electricity.”

“And, you get credits on your electricity bill; credits at the rate you would normally pay for electricity; retail rates?”

“All the time.”

“You’ve had your panels, how long?”

“Oh, quite a number of years.”

“Have you paid off your original investment? From the electricity credits?”

“A little while ago,” he said.

I paused to let all that sink in. “And you don’t understand why you’re getting push back from the coop and your neighbors?”

He thought for a bit. “I didn’t know about the 12% penetration stuff, but I don’t see how that matters.”

“Okay then. Let’s look at this from a 10,000 foot view.”

“Sounds good,” he said.

“Let’s start toward the beginning. The intent of the NEM law was to increase renewable generation distributed across the state. And in many areas, it has done that. Your area, for instance. In essence, everyone who self generates is an independent power producer. A very, very small one, but nonetheless. But there is a difference between you and a large producer. You are being paid retail rates for your generation whereas a large producer is being paid wholesale rates.”

“Besides that,” I continued, “the coop must take your generation before the large scale generators, so as the penetration goes up, so does their cost of electricity. Plus, self-generators are not paying the costs for infrastructure, transmission, and distribution. That’s extra cost and lost revenue. And it’s your neighbors, those that don’t participate in NEM, that are paying for that.”

Then I paused.

“Well,” he finally said. “I kinda knew all that.”

—Rich Maggiani

First, I start with Facebook. I scroll through to find anything interesting, especially posts from my three kids. Then I check out LinkedIn. Who’s invited me to connect? Who’s endorsed me? Who’s looked at my profile? I check out an article or a random post.

I don’t muck much with Twitter except to search on #stcorg and #stc13 . After looking at these two searches, I usually just close it. I might check out Instagram, but usually only because one of my children has posted there. Next, I check out the ST C Board of Directors site to read any new posts. And I check my iPhone to see if there is any pushed content I find interesting.

One morning, though, things were particularly active. I kept getting new posts all over the place. Bing here, ping there, bop over there. (Ok, not audibly; metaphorically, but you get the idea.) I could barely keep up. For some reason that I didn’t totally fathom, I wanted to check them all out. It quickly became took much, moving back and forth, forth and back, that it all became, well … chaotic!

When that thought hit me, it just brought everything to a halt. Is social media just chaos, and we’ve all been sucked in to the flurry? While my computer and smart phone kept pinging and popping, I began to wonder. What if social media is a manifestation of the chaos theory? Well, that just might explain a lot.

So off to the Internet to refresh my memory about chaos theory. First, I learned that chaos theory is a field of mathematics. Right away, I liked it. After all, I was a math major in university. A major concept of chaos theory is the butterfly effect. A small change in one place—the proverbial butterfly flapping—has a profound effect on some cataclysmic event somewhere else—a tsunami, for instance. And here’s the kicker. In math terms, such a succession of events is nonlinear. In other words, there is no direct connection between the two events.

Mathematics, of course, has a more technical explanation: something about dynamical systems being deterministic, but sensitive to initial conditions (I’ll spare you the details). Suffice it to say that even though one event might lead directly to another event, a tiny change in that initial event can cause all hell to break loose.

Okay, so back to social media. Does this make sense? Why was I getting all these posts in such a short period of time? Did some Monarch flap its wings somewhere? Maybe social media as chaos doesn’t refer to my particular situation at all, but to a larger condition of the greater social media, the one in which everyone plays.

One post can certainly cause various events. Tweet that ST C is holding its annual conference, and people register. That’s a direct and expected result. There have been times, though, when one small post results in completely overwhelming and unexpected results. I’ve seen it on Facebook and on Twitter. You probably have, too.

In the end, I guess, that’s the greatest attribute of social media: the power to engender cataclysmic social disruption and change. There’s not much that is loftier than that.

A final note: This is my last column as your social media columnist. It’s been a great ride writing this column. And Editor Liz Pohland has been patient (my favorite trait), thoughtful, and considerate. But for me, social media has become too big a distraction, and a convenient excuse to procrastinate. I act with purpose, and while some of my social media interactions are certainly purposeful, most of them are in search of purpose. Social media has become (I’m going to say something potentially blasphemous here) what television has long since become: titillating but ultimately forgettable. Or maybe I just got tired of waiting to see that completely overwhelming and unexpected result from one of my posts.

—Rich Maggiani

[Note: This post originally appeared in my “Social Media Insights” column in the May 2013 issue of Intercom, the magazine of the Society for Technical Communication (STC).]

A Communication Audit. This is a comprehensive, systematic evaluation and analysis of your company’s communication. A communication audit unveils what is truly happening as opposed to what is thought to be happening. It:

• Encompasses the activities conducted in a communication assessment and its resultant findings (although here it is more robust).
• Identifies the people who create the messages and information being communicated.
• Evaluates the clarity and value of the communication.
• Critically looks at the various methods of communication (such as Web sites, newsletters, emails, blogs, videos, and other publications, as well as interpersonal skills and managerial communication), pinpointing problem areas and identifying successes.

A communication audit must be thoughtfully planned and implemented, and the results carefully assessed to achieve the greatest impact.

The Scope of a Communication Audit. You can focus on a number of communication areas to evaluate and analyze. This focus can be the broad-based communication for the entire company or for an individual division or group. It can be a specific communication method (such as interpersonal communication or your internal Web site) or for a specific vehicle (such as your corporate publications).

Sometimes the scope of your company’s communication is simply too large. Breaking your communication efforts into smaller, more manageable chunks enables more targeted, accurate findings. Your scope simply depends on what you want to achieve in a particular timeframe.

The exact scope of an audit depends on your company: on your particular problems and needs.

When to Conduct a Communication Audit. Communication audits are always helpful, if only to keep up with the needs of a changing staff and a changing business climate.

If you have never conducted an audit, now might be a good time especially if your company has grown substantially. When a company experiences any substantial growth, communication channels tend to break down—what once worked becomes antiquated and stresses its ability to carry the ever-changing and ever-increasing amount of information.

Communication audits are indispensable when a company is undergoing any significant change to your business, such as when you experience a layoff or change in staffing; merge with or acquire another company; implement a new technology; launch a new product, service or line of business; enter a new market; or any other disruption to your everyday business operations.

In these cases, the results of an audit can identify those key communication areas that are vital to your moving forward as smoothly as possible whenever your company experiences these inevitable transitions.

A Communication Plan. This plan takes the findings of an assessment or audit and defines a plan of action that enables you to communicate better. A communication plan has four main parts; it:

• Clarifies the quality of your communication by summarizing the comments garnered through conversations with employees.
• Evaluates the effectiveness of your communication vehicles and channels, as well as the messages and information being communicated.
• Recommends steps for improving communication and making it more effective, including specifics on methods, channels, and personnel.
• Outlines a timeline—both short-term and long-term—for implementing the recommendations.

A Communication Plan, thus, maps the roads you can travel to communicate better and attain the resultant benefits.

—Rich Maggiani

[Note: This post is one of our position papers originally published in 2012.]

Since the most successful companies communicate well, understanding how your communication is working and how it might work better is critical to achieving this success. Flawed communication leads to misunderstandings, misinterpretations, mistakes, low morale, higher turnover, decreased sales, and lower market valuation; whereas effective communication leads to lower turnover, greater contributions, increased total shareholder value, and stronger market valuation of your company.

Communication is a complex process with many potential pitfalls that can be identified and corrected.

There are two methods to determine the quality of your communication; a:

• Communication Assessment (a short, pointed process)
• Communication Audit (a comprehensive, far-reaching process that encompasses the activities of a communication assessment)

Both strategically evaluate and analyze your company’s communication; both form the basis for a Communication Plan. A communication assessment is a fixed-cost alternative that quickly gives you a bead on your communication efforts, which helps you determine if you need to spend the time and money necessary to conduct a more comprehensive communication audit.

A Communication Assessment. This closed-end, short-term process focuses on the quality of your communication: how employees at all levels feel about your internal communication, its content, and the distribution vehicles.

A series of interviews, focus groups (including, perhaps, implementing a version of the world café), surveys, and questionnaires conducted with employees from across the company (various departments, management and staff, recognized leaders and informal leaders) elicits a cross section of thoughts, information, and ideas. Key questions elicit responses about what these people know about the company, what they do, what they see is important about their job, and how it affects the company’s mission and goals. It discovers what people know, what they don’t know, and what they are unclear or misinformed about.

The expertise of the people conducting the assessment enables a deeper grasp and evaluation of responses, ultimately painting a more robust and accurate picture. These interviewers must develop the appropriate questions to elicit worthwhile answers, and be available to conduct the assessment in a short timeframe.

To be of the greatest value, these responses must be honest. This is difficult to obtain if employees feel their responses might be used for other purposes or might not remain confidential. Objectivity and trust are paramount to obtaining honest answers since anonymity is critical.

From this information, a picture of where communication is clear and where it is cloudy and confusing emerges. The results of a communication assessment determine the need for a communication audit.

—Rich Maggiani

[Note: This post is one of our position papers originally published in 2012.]

Employees feel disconnected in companies with poor communication. Why effective communication is needed in a workplace without it:

40%: Employees who feel disconnected at work.

67%: Workers who do not identify with or are motivated to help the company attain its business goals and objectives.

25%: Employees who show up just to collect a paycheck. (1)

49%: Employees who feel their company is open and honest in its communication.

55%: Employees who feel that senior leadership only talks at them, but doesn’t listen to them.

51%: Employees without a channel to communicate up the corporate organizational chart. (2)

Benefits to companies that communicate better. Company that communicate effectively enjoy these statistical benefits over firms with poor communication:

30: Percent increase in market valuation. (3)

57: Percent higher in total return to share-holders than companies that communicated least effectively.

4.5: Times more likely to benefit from employees meaningfully connected with the company.

20: Percent who are more likely to experience lower turnover rates. (4)

1: Number of Communication Plans that a company must implement to achieve effective communication.

Succeeding with better communication. From an employee’s perspective, effective communication encompasses these elements:

• Open and honest exchanges of information.
• Clear, easy-to-understand materials.
• Timely distributions.
• Trusted sources.
• Two-way feedback systems.
• Clear demonstrations of senior leadership’s interest in employees.
• Continual improvements in communication.
• Consistent messaging across sources. (5)

Source Notes.

1. “U.S. Job Satisfaction Keeps Falling, The Conference Board Reports Today”, The Conference Board. 28 February 2005.
2. “Study Offers Insights on Effective Communication from the Perspective of Employees”, Towers Perrin. January 2005.
3. “Connecting Organizational Communication to Financial Performance—2003/2004 Communication ROI Study”, Watson Wyatt & Company. 3 November 2003.
4. “Effective Communication: A Leading Indicator of Financial Performance—2005/2006 Communication ROI Study”, Watson Wyatt & Company. December 2005.
5. “Study Offers Insights on Effective Communication”, Towers Perrin.

—Rich Maggiani

[Note: This post is one of our position papers originally published in 2012.]

Consider these questions to better determine how well you are communicating.

• Are your employees at all levels talking to each other?
• Do your strategic groups know what each other is doing?

• Is there a breakdown in communication—the information only goes so far, but from that point on, everyone makes it up as they go?
• Is there animosity over the perception that other groups simply don’t contribute enough to the company’s success?
• Does your staff know exactly how to proceed, or are there conflicting ideas?
• Are expectations clear?
• Are departments duplicating efforts while other tasks are left undone?
• Was your communication once flawless, but now that you are growing and changing quickly, these communication channels just don’t work anymore or are filled with static?

Communication fails as a company grows and changes. As a company grows—whether through sales or acquisition—communication becomes more of a challenge. What once seemed so intuitive, now seems like such a struggle. The breakdown of communication channels is common. This is not an isolated phenomenon, but rather a pervasive issue with growth and change.

There are size thresholds where communication becomes problematic: approach that size and issues arise. For smaller companies this happens when you just don’t know everyone in the organization any more, or staff come and go and you’ve never met them. For larger companies, the increasing size just doesn’t fit into your infrastructure causing things to slip between the cracks. For extremely large companies, employees don’t know all the countries around the world with company offices, much less what they do at those offices. There is just a sense that everything is just too distant.

Miscommunication results when channels breakdown. To compound the problem of weakening communication channels, employees at all levels unwittingly communicate schizophrenically—especially managers and company leaders. A specific message about policy discussed on Monday changes by mid-week. Appeals to raise the bar of integrity are counteracted when actions fail to support this imperative. Or decisions passed down through the chain of command take diverging routes as managers and leaders at each level obfuscate the meaning, diluting its impact.

Messages about the state of the company change, sending staff in varying directions to the point where they end up in many different destinations. Off-hand remarks are misinterpreted and undermine trust.

Miscommunication can occur at all levels of a company. This kind of communication, of course, leads to confusion and misunderstanding, takes up valuable time while everyone tries to decipher the real message, and leads to shrinking morale.

Absent any overarching statement of vision and values and image, absent any clear channel of communication, absent any method for engaging in a shared multidimensional dialog, managers and leaders up and down the organizational chart are free to interpret any message and its meaning.

Effective communication is clearly stated and singular in nature. A Communication Plan must clearly state the company’s brand and mission in words that can be understood and internalized by everyone. It must inform every employee about where the company is going and how it is doing.

A company’s stories must be truthful and honest; they can’t be mere claims using strong powerful words. The emotional value behind the words and the means of how the words are delivered must not only ring true, they must be true! When that happens, a focused strategy emerges, energizing everyone to arduously pursue a common goal of success.

—Rich Maggiani

[Note: This post is one of our position papers originally published in 2012.]

Successful performance means bringing together the best resources for serving future needs with a company’s capabilities, investing in the these resources, then constantly measuring and managing the results. To best bring these resources together, you must communicate effectively. And for that, you need a plan.

A Communication Plan relates the a company’s brand, image, mission, values, and goals to all employees, informing them of what the company does and for whom; the benefits it offers and the problems it solves. It describes communication channels that facilitate the exchange of information and ideas among your board, executives, management, and staff. It is a strategic discussion about the very core of a company: how it operates, what it stands for, what it delivers. This discussion must be robust enough so that everyone related to the company speaks with one voice, one mind, one purpose: a focused, clear, articulate message.

Creating and implementing a Communication Plan. One way to create and implement a Communication Plan on your behalf is by applying four communication principals: Enlighten, Convince, Motivate, and Align. These four-steps provide the framework for creating and implementing company-wide communication where everyone actively participates.

When creating a Communication Plan, address the particular challenges to communicating effectively in your company. To better evaluate poor or nonexistent internal communication, look for ways to change how you talk about problems, to truly assess and analyze these problems in a new light, and to generate new and innovative solutions.

Examine the relationship between organizational structure and specific communicative practices, how communication practices by various levels of hierarchy establish, maintain, or change the message and, ultimately, the culture. Anticipate communication deficiencies, and use these discoveries as a means for facilitating organizational development and innovation.

In a Communication Plan, draw the map that enables you to create a company dialog. Be sure to implement simple, clear communication through the most effective channels so that all employees can easily access, understand, and distribute the necessary information. Devise a clear overriding message that embodies your image and values.

A well-implemented Communication Plan has many benefits. Effective internal communication, implemented through a thoughtful plan, allows employees to feel comfortable with the company and contribute to its vibrant culture. And it’s this vibrant culture that leads to the many benefits experienced through effective communication.

• Your company is able to distinguish itself enough to attract and retain the best and brightest employees.
• Your company has a strong sense of culture, one that employees help create and want to participate in.
• Employees feel comfortable enough to not only recognize and accept change and growth, but to participate and lead it.
• Employees can readily see how their contribution impacts the company and its performance.
• Employees at all levels engage in a dialogue to become intimately involved in the company and its daily interaction with its customers.
• Employees can readily see they are working for something larger than themselves, some greater cause, and thus can see the effect of their efforts on the bigger picture.
• Clear communication engenders a strategic discussion about your company and its industry, leading to continuous improvement and innovation that anticipates and addresses market needs.

To attain these benefits, your communication must be authentic, aligning words with actions; it must be real, having a human touch; and it must use a language, a voice, that everyone can speak.

—Rich Maggiani

[Note: This post is one of our position papers originally published in 2012.]

A Communication Plan defines a process for communication among all employees at all levels. It is a strategic method of getting everyone involved in the company, its growth and evolution, and ultimately its continued success.

A Communication Plan is based on strategic goals, aligned and focused, and results in increased revenue and profitability, more robust innovation, and marked organizational stability. It unites everyone—directors, executives, managers, and employees—in your company toward this strategic goal with a shared purpose.

Specifically, a Communication Plan identifies:

• The types of communication that most benefit your organization.
• The people involved in sending, receiving, and contributing to this communication.
• The best channels—written, audio, video, electronic, verbal, interactive, and others—for creating and transmitting this communication, and an action plan for implementing these channels. These channels allow for clear communication up and down the corporate organization chart (from directors and executives, to managers and employees, and back) and among all divisions, groups, and colleagues.
• A time table for how often information is communicated. Regular communication is one of the many keys to success.

What constitutes effective communication. Effective internal communication gets—and keeps—everyone on the same page with your values, image, brand, mission, and goals. Focusing on these aspects ensures all employees know:

• What the company does, and comprehends the entire scope of its products, services, solutions, and benefits.
• Where the company is headed, and how its products and services, coupled with innovation, keep the company moving in a positive direction.
• How the company is doing financially, as well as projected revenues and profits.
• How their work helps the company succeed.

A singular, purposeful message. A well-crafted Communication Plan, expertly implemented, allows you to quickly adapt to change and growth; it strengthens your position in the marketplace. As a company, you benefit from a clear sense of purpose, a laser-focused message, and a strategy to distribute your message, both internally and externally. When your external target market receives your message, they respond in a positive manner, helping fuel your growth and contribute to your bottom line.

This focus works for a number of reasons and has many benefits. Everyone in your company gets and contributes to the same message using the same voice. Clients and prospects receive the same message in their interactions with employees.

Within your company, one hand knows what the other is doing. Employees not only understand, and appreciate what other departments, divisions, and groups are doing, they also know what the people in these organizational structures contribute to the company. Employees see the big picture and better under stand their place in it. They better comprehend where the company is going, and the benefits it brings to your customers as well as to them.

This is a powerful motivation and an unstoppable force both within your company and in the marketplace. Customers know what you stand for, creating a clear image of who you are and what to expect from you: greatness. This focus allows your company to not only stand out from the din of too much information, but also to rise above it. This focus replaces uncertainty with clarity: a clarity which you define and communicate. For if you do not define your message—your brand, image values—outside forces will and it will not be the one you want out, nor would it be accurate or consistent.

Effective communication enables you to speak with one carefully crafted message backed by real action and commitment. Only this type of true message strikes deeply, withstands constant testing, and endures.

—Rich Maggiani

[Note: This post is one of our position papers originally published in 2012.]

Effective communication performs a core corporate role, vital to your company’s financial capacity as well as to your overall success.

This success encompasses many measurable factors:

• Increased market valuation.
• Increased shareholder value.
• Greater connection and commitment from employees.
• A more robust and inclusive corporate culture.
• Proactive involvement that drives corporate change and growth.

In essence, effective communication drives business results that lead to success.

Increased market valuation. Effective communication is one of the leading indicators for financial performance. Research shows that, over the first years of this century, companies with the most effective communication attained a 30 percent increase in market valuation. This is almost 20 percent higher than companies that do not communicate effectively.

This holds true for both publicly-traded as well as privately-held companies.

Increased shareholder value. Effective internal communication benefits your shareholders. Over the early 2000s, research demonstrates that companies with effective communication strategies experienced a 26 percent total return on investment to shareholders. This total return is 57% higher than companies with less effective communication. (By comparison, companies with the poorest communication experienced a 15 percent decrease in market valuation.)

Greater connection and commitment from employees. Employees work for more than just money. They want to be part of something bigger than themselves, to have meaning in what they do, to know their work contributes to a larger cause.

Companies that communicate better benefit from employees who feel more connected, more committed, and better understand how their actions contribute to a company’s success, which dramatically reduces turnover.

An effective communication strategy reinforces employees’ realization that they are critical assets to the company. Ultimately, employees are more inspired.

A more robust and inclusive corporate culture. Clear internal communication channels that create a dialog among all employees using a single company voice and that use technology in this exchange make everyone feel more in touch with the company. This is especially true for new hires. New employees feel connected to the company’s culture and immediately begin applying their efforts to the overall success of the company.

As companies grow, their culture can become scattered through the forced decentralization that must happen to keep up with a more complex business structure. Effective internal communication helps even the largest companies feel like a smaller, more comfortable, more secure place to work and fosters a sense of participation and contribution.

Proactive involvement that drives corporate change and growth. Effective internal communication has a positive effect on changes in the marketplace and in your industry. Employees adjust quicker and have a greater impact on changing business conditions, allowing your company to keep pace with this change, to grow, and to lead.

Most employees are adverse to change; they get too comfortable with the way things are, the status quo. Yet organizations with effective communication experience strong support for change and growth from management and staff when communication is at its most fluid.

Effective communication sparks a change in behavior, and more closely connects all employees to your customers. Ultimately, effective communication powers your company and proactively drives business performance to a higher measure of success.

—Rich Maggiani

[Note: This post is one of our position papers originally published in 2012.]