short case study on communication failure

Internal Communication Case Studies: The Terrible & The Terrific

It’s a question that often comes up: ‘How do other businesses do this?’. Whether you’re implementing a new sales structure or updating your software systems, it’s always helpful to consider how similar companies approached the issue. This is particularly relevant for internal communications , where there is no one-size-fits-all solution. Each organisation has its own unique set of challenges and needs to tailor its internal communication strategy accordingly. Internal communication case studies can help you evaluate your approach, by exploring comparable situations and their outcomes.

In this blog, we’ve selected some of the best internal communication examples from the world of business. Not all were successful. In fact, some were complete disasters. But these failures, along with the success stories, are great examples of internal communication in action. When you’re looking for the answers to effective internal communication , nothing speaks more clearly than real-life examples.

We have grouped the following internal communication case study examples under the ‘seven golden rules’. These rules were proposed by Fitzpatrick in his ground-breaking  publication  Internal Communications: A Manual for Practitioners. These fundamental rules of internal communication best practices help us to categorise the relative successes and failures of these examples.

Rule 1: Activity means nothing without results

The starting point for every IC has to be: “What do we want people to do?” Being busy and generating a constant stream of campaigns, videos and newsletters is a waste of time if nothing changes as a result. When you’re looking at improving internal communications , always keep track of the outcome as well as the action. This is where the true significance lies.

Case Study 1 - Nationwide Building Society

Background: Nationwide Building Society ran an award-winning five-week BIG Conversation, gathering ideas from all its 18,000 employees in a company-wide collaboration. The aim was directed to reinvigorating Nationwide’s sense of purpose.

Approach: The activity included TalkBack events, online surveys and a huge listening exercise to give staff and members the chance to contribute to its future. By implementing a company-wide internal communications survey , Nationwide opened up a free-flowing conversation with its workforce.

Outcome: The result has been a refreshed strategy and a marketing campaign based on the new concept of ‘building society, nationwide’ – helping people improve the quality of their lives. This business communication case study demonstrates the power of actively listening and acting on employee’s suggestions. 

Verdict: Success

Rule 2: Value benefits the business

You will only be adding real value if your employee communication links directly to the business needs of your organisation and helps to achieve a defined strategy or a specific project. The benefits of good internal communication only become apparent when you define your desired outcomes and set actual targets.

Case Study 2 – XPO Transport and Logistics

Background: XPO wanted to leverage great ideas from its colleagues across its 104 UK sites to help its customers improve productivity and reduce costs. Its large, flexible and hard-to-reach workforce (from drivers for Asda to B&Q warehouse contractors) don’t usually have a company phone or laptop. Of all the case studies on communication in the workplace, this large-scale exercise is remarkable in its scope.

Approach: To spark engagement, Talkfreely developed the Ideas Matter App, which every employee was able to download to their personal phone. An internal communications app is the ideal way to connect with remote workers and hard-to-reach employees.

Outcome: Linked directly to business needs, the internal communications platform proved to be exceptional value. The generation of ideas has been significant; 1 in 4 of all ideas submitted are being put into practice. In addition, it showed a remarkable return on investment of 6.5:1 with £156,000 of savings in the first year alone.

Rule 3: In the thick of it

When you’re looking for new ideas, trying to work out what your employees are really thinking or wondering why a previous internal communications plan went wrong, don't sit pondering at your desk or researching online. Leave your office and start talking. Once you talk and listen to your employees, you will begin to understand what motivates them, what concerns them and how they feel about the company. Of all the internal communication ideas , this one is key if you want to keep track of engagement levels.

Case Study 3 – AOL

Background: AOL announced it was slashing its Patch local news network by a third. This was a large-scale change affecting many employees across the company and required careful handling in its communication.

Approach: CEO Tim Armstrong set up a conference call with 1,000 employees with the aim of boosting morale across the workforce. As Armstrong talked, Patch Creative Director Abel Lenz began taking pictures of him. He was immediately sacked, in front of the 1,000 staff on the conference call.

Outcome: Perhaps Armstrong did not know that Lenz’s job included photographing meetings with key leaders for the Patch intranet, for the benefit of remote workers. But he should have. If he had been in touch with his workforce, he would have been fully aware of the roles of individual employees. This employee communication case study gives a clear indication of the importance of understanding your employee’s job roles.

Verdict: Failure

Rule 4: Shut up and listen

Communicating with employees should be a two-way street. The megaphone approach is never going to work best because people only feel connected and motivated if they are part of a conversation. It’s vital to put internal communication channels in place that allow employees to comment on the messages coming down from the top. Listen to what they have to say … and learn.

Case Study 4 – PayPal

Background: The digital payment company needed to address an internal report that revealed not all their employees were not using the PayPal app. The President, David Marcus, wrote a company-wide memo to all staff regarding the problem.

Approach: David Marcus took a heavy-handed approach to the matter. He told his staff to use the product or quit: “If you are one of the folks who refused to install the PayPal app or if you can’t remember your PayPal password, do yourself a favor, go find something that will connect with your heart and mind elsewhere”.

A better policy would have been to find out why his employees weren’t using the payment app, whether they felt competitor products had better features and ask for their suggestions.

Outcome: The memo was leaked to the press. It generated widespread coverage across the media and left customers wondering what was wrong with an app that PayPal’s own staff wouldn't use. Internal communications best practice case studies demonstrate that opening a two-way channel for feedback will improve both internal and external communication .

Rule 5 – I did it their way

Understand the working methods of those you need to convince. If leaders seem bound up in stats and spreadsheets, give them what they want. Gather data to prove your ideas work, show them a process, outline a clear outcome and they’ll soon be on your side. Measuring internal communications will help to provide the rationale behind your ideas. Equally, if the types of internal communication you are using don’t seem to be connecting with your employees, don’t be afraid to try a different approach.

Case Study 5 – Seymour House

Background: Seymour House runs ten outstanding childcare nurseries and wanted to get staff across the group engaging better with each other to share great practice. They needed to identify the best methods of internal communication that would resonate with their unique team-based workforce.

Approach: Talkfreely innovated with an internal communications app called Community. Community replaces static web pages and posts with highly personalised, bite-sized chunks of information presented on boards displaying relevant cards. These communicate quick stories and are far better at connecting people across teams. 

Outcome: The Seymour House teams instantly connected with the Community app. Engagement levels took an immediate uplift as the communication and understanding between teams and individuals improved. This internal communications case study shows how crucial it is to connect with employees in a way that suits their style of interaction.

Rule 6: Make the most of managers

Your leadership team are crucial to the success of your strategy. However big or small your organisation, line managers and local leaders are your allies. They are essential to motivating employees and getting them on board: through discussion, allaying fears and leading by example. When you’re pulling together your internal communication definition , make sure leadership is one of the key points.

Case Study 6 – Yahoo

Background: The tech pioneer defined a need for remote workers return to the office environment. There was no longer a role for staff working from home and all employees needed to be office-based moving forward. The job of communicating this message was handed to the HR department.

Approach: Yahoo’s Head of HR sent out a motivational memo full of praise for the company’s “positive momentum”, “the buzz and energy in our offices”, “remarkable progress” and promising “the best is yet to come”. At the end of this message was the directive that all staff working from home must move back into the office or quit.

Outcome: A communication of this importance should have come from the head of the business. By trying to hide the order as a motivational HR message, it failed to provide a strategic business rationale. This is where the CEO needed to be a visible presence, sharing the reasoning behind this unpopular decision. Internal communication case study examples show time after time that leadership visibility is an essential element, especially when communicating change .

Rule 7: There is no silver bullet

We’d love to be able to reveal the secret to implementing that perfect internal communication strategy. Social media, the employee intranet , digital screens, email – they have all at some stage promised to revolutionise internal communications and make everything else redundant. But it hasn’t happened, which means the role of the internal communicator remains absolutely pivotal. Cut yourself slack in how you judge success, because every organisation has a different set of challenges and issues to overcome.

Case Study 7 – West Sussex County Council

Background: West Sussex Country Council has a workforce of over 6,000 staff spread across a wide geographic area in a variety of locations. In addition, around 25% of staff members have limited access to IT equipment and/or limited IT knowledge. The channels of internal communication in operation were outmoded and ineffective, leading to misinterpretation and inconsistencies.

Approach: Talkfreely developed a bespoke internal communications app designed to connect the disparate council workforce. Called ‘The Big Exchange’, the app allowed for real-time communication over a variety of digital platforms. Available 24 hours a day, 365 days a year, it allowed for flexibility in work patterns, increasing its appeal for all employees.

Outcome: By the end of the first quarter, a third of the employee base were actively using the app. In some sectors, 33% would be a pretty modest engagement score. For West Sussex Country Council however, it has connected with those hard-to-reach employees for the very first time. In addition, it proved that there is a real council workforce appetite to get involved. For example - there were 25,200 page views in the first month which means on average, each active user visited over 25 pages of content per month. Read the full case study .

“The TalkFreely app has helped improve, beyond recognition, the way we communicate with our 6000 strong workforce, many of whom are hard to reach. This has become even more evident over the last few weeks in our local response to the coronavirus crisis, helping us to get critical, time-sensitive information out to staff quickly and easily wherever they are across the county.” William Hackett, Communications & Engagement Lead, West Sussex County Council

Final thoughts

It’s clear, when looking at this selection of communication case studies, that not every internal communication is destined for success. And, if handled incorrectly, a poorly targeted message can actually do more harm than good. Internal communication mistakes are very costly, to both morale and the bottom line. However, if you take the time to plan carefully, the positive impact of a good internal communication exchange can be considerable. When assessing internal communications case studies, it’s also vital to consider the arena in which the company is operating before judging the relative success of the campaign. Ultimately, every organisation will need to take a different approach, tailored to suit their unique set of circumstances.

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5 Business Communication Failure Examples and How to Avoid Them

If you watched Kerry Washington as crisis management expert Olivia Pope on Scandal , then you know that a public relations crisis can be a messy affair for a company. One misstep can quickly spiral into a PR disaster that wreaks havoc on a brand’s reputation. A business communication failure example can be found in every industry, but following internal communication best practices can help your company avoid them. 

Learn how the right software can help your company avoid common business communication pitfalls.

What Are Business Communication Failures?

When an organization’s internal stakeholders are aligned on their mission and clearly understand objectives and strategy, it results in positive business outcomes. 

Successful business communication relies on several key factors:

• Transparent communication
• Authentic leadership
• The inclusion of every employee in communication for a bottom-up leadership style
• Silo-free platforms for seamless information exchange and workflows

The two must-haves of effective crisis management are a plan and a team . But even the best-laid plans can fail. Business communication breakdowns can happen within any organization that stray from internal communication best practices. 

The results might just create a small glitch in operations, but sometimes they can have more serious repercussions, such as:

• Disrupted workflows
• Negatively impacted brand reputation
• Drive down value proposition

Whether it’s a product recall, a data breach, or a customer interaction that went viral (think of the infamous video of a man getting dragged off a United flight when they overbooked the plane), companies big and small alike are vulnerable to a controversial communication crisis. As Warren Buffet said, “It takes twenty years to build a reputation and five minutes to ruin it.”

Here are five examples of business communication gone wrong and how the companies involved responded.

1) Nike: Business Communication Failure at the Top

Since 1971, when the Swoosh logo was officially unveiled, Nike has been one of the biggest names in the sneaker world. With endorsement deals with some of the most famous names in sports, Nike solidified its place as the leader of the pack in the footwear industry and has an annual profit of $36 billion .

But despite its spot as one of the world’s most profitable apparel brands, Nike has had a few PR crises that required major repair.

In 2018, female employees spoke out about the male-dominated culture that fostered harassment and discrimination in the workplace. It started as an anonymous survey by a group of women at the company’s Beaverton, Oregon headquarters about their experiences. The disturbing results were delivered to CEO Mark Parker.

Some examples of internal communication problems that went wrong here include:

• It took a renegade survey by a group of employees to reveal this toxic culture 
• Lack of trust in HR
• A leader who says he was unaware of the problems
• Inefficient methods of bottom-up communication

Nike took dramatic steps to fix these issues by firing C-Suite executives, including the head of diversity and inclusion, implementing mandatory management training, a commitment to a more inclusive culture, and an overhaul of their HR procedures and internal reporting processes. 

Pro tip: Be proactive and get ahead of the narrative through authentic, transparent communication.

2) Wells Fargo: Learn to Accept Responsibility 

In any business, it’s always good to be agile and ready to pivot to a crisis communication plan when the time comes. When it happened to Wells Fargo, the second-largest bank in the United States, they only seemed to dig themselves into a deeper hole that made it harder to bounce back. 

It started in 2016 when authorities, like the Consumer Financial Protection Bureau, were alerted to potential fraud. Responding to a top-down demand for aggressive customer quotas, employees at local branches created upwards of two million fake bank accounts in customers’ names but without their consent. The bank was fined $185 million.

Wells Fargo’s leadership response potentially hurt the banks’ image as much as the initial scandal.

• The company’s early public statements neglected to accept any responsibility, nor did they contain apologies. Instead, they downplayed the fraud. An apology only came from the CEO when he was brought to testify before the U.S. Senate Banking Committee.
• Leadership blamed, then fired, 5,300 low-level employees.
• The CEO sold $61 million of his Wells Fargo stock the month before the investigation began.

How to handle a situation like this? An immediate, proactive response.

• Thoughtful, authentic, direct communication to both internal stakeholders to rebuild trust and establish an open culture
• Apologies to the public for what happened
• Accept responsibility
• Take high-profile actions that change policies and procedures to ensure this will never happen again

Wells Fargo is still in business, but their reputation remains scarred.  

3) Starbucks: Align Every Employee to Core Values

In April 2018, two men went to a Philadelphia Starbucks to meet a friend. They sat at a table waiting to order and asked to use the restroom. The result? The manager on duty called the police and the two African American men were—wrongfully—arrested for trespassing. 

The video of the arrest went viral and by the next day, #boycottStarbucks was trending on social media. What might have started as a store manager attempting to follow a company policy turned into a racially-biased encounter that even the Starbucks CEO called a “reprehensible outcome.”

That CEO, Kevin Johnson, instantly released a statement that included a direct apology to the two men. To employees and customers, he said, “You can and should expect more from us.  We will learn from this and be better.”

He also outlined a list of internal actions the company would take. A month later, Starbucks closed 8,000 stores to train 175,000 employees on racial bias and how to make every customer feel like they belong. 

• Realign the entire organization to the company’s core values and mission.
• Encourage bottom-up feedback from partners on how the company was doing from their perspective.
• Adopt best practices and review policies that create a culture of inclusion and equality. 

Recognizing the major failure in their internal communication procedures and how their “practices and training led to a bad outcome”, Starbucks did an internal investigation into their policies. It was widely seen as a transparent, authentic response. 

Pro tip: Don’t just pay lip service to your employees and your customers. Learn from your mistakes and take action to revise your policies. 

4) Yahoo: A Deafening Silence Amplifies a Crisis

In September 2016, Yahoo leadership acknowledged a 2014 data breach that exposed the accounts of 500 million users to hackers. Three months later in December, the company then announced that there was another breach from 2013 that affected one billion accounts. Nearly a year later, in October 2017, Yahoo announced that, in fact, the data breach affected all 3 billion of its customers.

Yahoo’s business communication failure? Not communicating. It turned out that company insiders actually knew about the breach when it happened years earlier but kept it under wraps. 

Not only was this extremely poor business communication, but poor risk management. Running a company means running a gauntlet of risks. Companies need to have a risk management framework in place to prepare for any number of threats. Data breaches happen every 39 seconds . They are a risk a tech company like Yahoo was aware of and should have been prepared for. 

An internal investigation found that “failures in communication, management, inquiry, and internal reporting contributed to the lack of proper comprehension and handling of the 2014 Security Incident.” By not addressing a crisis with internal stakeholders and customers, companies with communication issues face:

• Decrease in valuation: In this case, Yahoo was in the process of selling a piece of their company to Verizon who shaved $350 million off the asking price due to this mistake.
• Damaged brand reputation: People are less willing to trust a company who not only mishandles their personal information, but doesn’t let them know their names, phone numbers, and passwords were stolen. With plenty of alternative search engines and email providers, Yahoo’s failure to communicate most likely resulted in a loss of users.
• Loss of employee trust: Trust is a big-ticket item that delivers high employee confidence and engagement. A moment like this makes employees question the cultures and values of the organization they work for. 

5) IHOP: A Communication Failure Turns Into a Feeding Frenzy

Not every business communication failure turns into a scandal. Sometimes they turn into great PR opportunities. 

When IHOP announced it was changing its name to IHOB, the social media stunt to plug its new menu item (burgers) turned into an unlikely crisis. Its loyal customers were thrown into a frenzy, upset that their favorite pancake place was changing.

IHOP took the communication failure and ran with it, using humor to address the ensuing chaos. What could have put the company in the spotlight for the first time in decades, attracted new customers, and quadrupled burger sales? IHOP took hold of the communication and flipped the narrative, made it fun, and, most importantly, reassured customers that it was still the same brand they had grown to love. 

Business communication failures can lead to a serious PR crisis for any company. But business communication done right can also save a company’s reputation without any need to call Olivia Pope.

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Most frequently asked questions.

Miscommunication occurs when communication is not effective. This is the case when the intent of a message conveyed to someone is misunderstood.

This blog post covers miscommunication examples from Nike, Wells Fargo, Starbucks, Yahoo, and IHOP.

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