Internal communication critical to business transformation

New research supports the assertion that internal communication has been critical to helping organisations transform during the COVID-19 pandemic.

A paper published by Harvard Business Review reports that almost four in five corporate transformations fail. Internal communication and how organisations engage employees is a critical factor in successful transformation projects.

Internal communication has proven to be an important management function during the COVID-19 pandemic, helping organisations manage issues such as leadership communication, furlough, illness, and working from home. It has been at the core of organisational change.

Copperfield Advisory, Insider and Revolution Insights Group set out to explore the role of communication of organisational transformation.

The study reports that only 22% of companies successfully execute business transformation projects. It defined transformation as a fundamental way in which the organisation conducts business, resulting in economic or social impact.

The research team identified a range of quantitative indicators of a business transformation. These included increased R&D investment, restructuring, change in operating margin, mergers and acquisitions, name changes and public announcements of transformation efforts.

The study used financial performance and increased reputation as indicators of success. Financial metrics included revenue, stock price and market value. A proprietary metric was used to evaluate reputation and the extent to which companies brought all stakeholders on the transformation journey.

128 global companies that have undergone transformation between 2016 and 2020 were analysed as part of the project. Only 28 of the organisations examined were successful transformed from both a financial and reputation perspective.

The study identified 66 corporate metrics to characterise how an organisation manages its relationship with customers, employees, shareholders and its environmental impact.

Six factors related to employee relations and diversity set companies that successful manage corporate transformation apart from counterparts. These are:

  • Employee pay: employees were compensated more highly compared to those at companies of a similar size

  • Employee stock options: employees receive more stock options compared to those at companies of a similar size

  • Employee satisfaction: employees report higher satisfaction at work

  • Diversity and inclusivity: companies employ hiring practices with an eye toward equity

  • Women managers: companies employ more women in managerial positions

  • Women employees: Women make up a higher share of employees at these companies


The results are consistent with a well-known study by John Kotter in 1995 that found that 70% of corporate transformations are likely to fail. In a paper Leading Change: Why Transformation Efforts Fail, Kotter reported that vision, stakeholder engagement, and commitment to execution, were critical success factors.

The Secret Behind Successful Corporate Transformations was written by Paul A. Argenti, Jenifer Berman, Ryan Calsbeek, and Andrew Whitehouse and published on 14 September, 2021.

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