In this town and elsewhere, there are many top corporate executives who like to think they are helping their firms by seeking to lock up information about their businesses inside the board rooms until they are darn well ready to make a public announcement
According to a major new survey, however, some corporations have discovered there are benefits in the form of better productivity when a business opens up the channels of communication with workers.
Towers, Perrin, Forster & Crosby, a New York consulting firm with offices in Washington, joined the International Association of Business Communicators (IABC) recently in a poll of 45,662 employes throughout the United States and Canada.
It should come as no surprise that management flunked this test of public opinion, in terms of being a reliable source of information for employes about their own organization. Top executives were ranked 12th as a source of information, after more consistent sources such as the grapevine, small group meetings, unions and supervisors.
In fact, top executives (the major source for 11.7 percent of respondents) just edged out the press (9.7 percent).
The last statistics would appear to discredit one pet complaint of board chairmen and presidents -- that the press too often is conveying news to workers before the company is able to do so. Evidently, the company grapevine does this job.
But there are some good marks for key subordinates of the top executives in the study, particularly for immediate supervisors of employes. In the crucial area of supervisor-employe communications, 64 percent of the respondents said their supervisors kept them well-informed and 65 percent said their supervisors appraise individual performance at least one time each year.
Perhaps the greatest problem detailed in the study, which was discussed here at the recent IABC national convention, is evidence that corporations and other organizations aren't listening to their workers.
Just over 55 percent said their firm's management both talks and listens and a bare majority of respondents indicated that management acts on employes' ideas. Once exception to this general pattern is the financial industry, which listens to employes and acts on their ideas at a much higher level, according to the survey.
IABC, a professional organization of 8,500 managers, writers, editors and other public relations people, no doubt will use results of this opinion sampling in their own organizations in an effort to convince superiors that better communication is good business.
"One of the most significant trends . . . is the growing acceptance of communications as an important management function," said IABC President Lynda Stewart, a communications executive with Cox Broadcasting in Atlanta. "The organizational communicator today is an educator, a problem-solver and a catalyst in dealing with complex relationships among internal and external audiences."
IABC officers said they were not surprised that the grapevine turned out to be such an important source, but they were mildly surprised that 52 percent of respondents found the grapevine usually accurate. Also surprising to IABC was the company bulletin board, which ranked fourth as a current source of information and with 41 percent of all employes preferring bulletin boards as a major source.
"It may be true that employes do not -- and should not -- realistically expect every organizational communication effort to tell the full story, but the survey indicates that when information is being withheld from employes, they generally know it, resent it and fill in the blanks themselves," Stewart said. "The result is a hyperactive grapevine exaggerating the negative and diminishing the positive."
The best management approach is to create an organizational climate that fosters open, credible and two-way communication, she suggested.
Although many businesses have been slow to recognize the need for candid and professional communications operations, another recent study found significant changes are being made.
The University of Missouri School of Journalism updated a survey taken two years ago and found that communications/public relations budgets have increased 49.5 percent, that more communicators are moving into top management ranks with a 30 percent increase in those holdings the title of vice president, that salaries have risen 21.5 percent and that 34.8 percent are in new jobs rather than replacing someone who previously held the position, indicating expansion of programs.
There are a number of case histories available, showing what can be accomplished. To cite just one example, Northrop Corp. started a new communications program in 1978 that has produced annual savings of more than $750,000, according to producitivity program director Robert Patchin. In once titanium drilling program, the savings is $62,000 because of new machinery, machinery modification and improved work methods worked out by employes and supervisors who meet together at least once a week.
"People suddenly become able to present themselves in a much better manner, having been taught a logical communicative process," Patchin said. "Instead of pounding the table, the worker now says that this is the problem, this is what I would like to do about it, and these are the other things that I have considered; let's get something done.
One company that had communications problems more than a decade ago, National Student Marketing Corp., has gone into the history of business as a textbook example of what happens when investors aren't told the truth.
This former Washington company tried to make it rich by a variety of marketing programs aimed at college students, which wasn't a bad idea at a time of booming enrollments. But the question of outside professionals' responsiblity for that company's allegedly incomplete and fraudulent reports to public investors remains unresolved many years after the fact.
In what should be a landmark case for both the professionals of law and accountings, the White & Case law firm and accountants Peast, Marwich Mitchell & Co., faces charges on securities law violations related to NSMC. The Supreme Court refused last week to hear appeals by the professional companies that they are outside the scope of federal securities laws. The lawyers and accoutants contended they should not be liable, since they were not parties to allegedly illegal transactions.
Lower courts had said White & Case and Peat should stand trial on the charges, and the Supreme Court now has agreed. The case is based on a 1969 transaction involving the sale of NSMC stock to institutional investors.