Talking the Talk

Last fall, Aflac Inc. executive Audrey Boone Tillman left a meeting with the company’s CFO early for an urgent business appointment: She was scheduled to judge an employee chili cook-off.

Though it may seem like an odd way for an executive to prioritize her time, employee-driven events like a cook-off are seen as much a central component to Aflac’s culture of open and constant communication as a meeting with top company brass.

“Both the CFO meeting and the cook-off are important aspects of my role as a leader,” said Tillman, executive vice president of corporate services at the supplemental insurance firm. “It’s part of what makes Aflac tick.”

It is perhaps this ethos that helped propel Aflac to its 16th year of making Fortune’s list of 100 Best Companies to Work For — an achievement that prompted the company’s executive team, including Chairman and CEO Dan Amos, to spend time in the cafeteria one day this past January handing out cupcakes and balloons.

Executives at the Columbus, Ga.-based company say they take pride in how often they communicate with Aflac’s 4,700 employees, whether via a companywide town hall-style meeting or a one-on-one chat in the cafeteria. The environment, they say, is a big part of the reason why employee engagement remains high and turnover remains low.

“There is no meeting or employee activity that senior leaders feel above,” Tillman said. “They are always present.”

But things weren’t always so rosy. Communication became a necessary component of the company’s damage control efforts in 2008, when amid the deepening of the recession Aflac’s stock price dropped nearly 27 percent to end the year and another 75 percent during the first quarter of 2009. According to news reports, the executive team responded by implementing strict cost-cutting measures along with a hiring freeze.

As soon as those decisions were made, Aflac’s executives met with the communications group to create an information campaign for employees. Amos held town hall meetings, managers met with their individual teams and Tillman hosted an “Ask Audrey” session, where employees could ask questions anonymously about the potential challenges facing the company.

The communication group also created a series of video updates that were posted on the company’s internal Web portal, sent regular email announcements, put articles in company newsletters, and released talking points about the spending strategies for weekly meetings.

“We wanted to be open and honest so that when people encountered an additional level of scrutiny over spending, they would know not to be afraid,” Tillman said. “It eased the panic and gossip and helped employees see how the changes would help the business.”

Today, the company has a dedicated internal communications department made up of representatives from each business unit. The team works with executives to craft corporate information initiatives and provide managers with key talking points for staff meetings.

“The managers love that we provide this information,” said Kip Havel, second vice president of field communications at Aflac. “It gives them timely content that will help their people to be more effective, and it helps us ensure everyone is hearing the same messages.”

This constant communication approach is all part of what the company calls its “Aflac Way,” a list of seven corporate commandments that include directives like “respond immediately,” “know your stuff” and “your problem is my problem.”

Although these “commandments” are written with a customer focus, they are also used as a guide for how the company envisions the way employees and management should talk to one other, said Laree Daniel, Aflac’s senior vice president and chief administrative officer.

“The Aflac Way drives everything we do from a communication perspective, and everyone is expected to follow them,” Daniel said.

Not for Everyone

It takes a lot of effort to communicate this frequently with so many employees. Aflac executives say it’s worth it because it gives them a competitive advantage. Aflac’s annual turnover rate is less than 15 percent among its call center workers and just 6 percent overall. Employee engagement survey rankings also regularly hover around the mid-80 percent range, executive said.

Additionally, in the worst of the recession, as stock prices fell, Aflac’s revenues continued to climb. Since 2007, revenue has increased by $10 billion, according to Securities and Exchange Commission data. And while gross profits fell to a four-year low of $1.9 billion in 2008 — as the cost-cutting measures were employed — the company has since rebounded. In the year ended December 2012, Aflac reported nearly $8.3 billion in gross profits on $25.3 billion in revenues.

Aflac executives said the company’s communication strategy impacts all of these metrics. From lowering the cost of replacing staff to ensuring customer satisfaction, solid internal communication has powerful influence on the business, Tillman said. “It ensures our messages are consistent and that people feel empowered, which affects our bottom line.”

But this level of transparent communication isn’t likely to work for every company, according to Valerie Frederickson, CEO of Valerie Frederickson and Co., a human resources services firm in Menlo Park, Calif.

Frederickson said part of the reason it works for Aflac has to do with its business model. Because the company sells complex insurance products and works mainly with small businesses, Frederickson said a big part of what Aflac is forced to hang its hat on is effective customer communication.

“Employees are the ones who talk to the customers, so if they feel happy and engaged in their jobs, the customers will, too,” she said. “That’s a huge benefit to the business.”

Aflac’s commitment to communication comes from the top, and the effort is more than just the executive team informally prioritizing time to chat with employees in the cafeteria. Leaders are not just encouraged to communicate with their teams, they are judged on it. “How well they communicate and coach their team is part of their performance assessment,” Daniel said.

Each year, employees complete an annual survey on how well the person they report to communicates, including whether he or she provides useful feedback on a timely basis, offers guidance and helps them achieve their goals. Additionally, the annual employee engagement survey asks questions related to how leadership communicates with employees and whether there are gaps that require attention.

And while the company said it looks for candidates with strong communication skills during recruitment, even the best leaders may struggle with Aflac’s lofty expectations. To compensate, Aflac has developed a series of communication training courses on topics including how to communicate to manage performance, how to give business presentations, and how to give and receive constructive feedback. This is in addition to four Toastmasters International clubs that aim to help employees practice communication, public speaking and leadership.

Renee Ippolito, a senior IT manager who’s been with Aflac for more than 30 years, has been a beneficiary of such programs. When she moved into management 12 years ago, Ippolito said she faced some challenges with the communication aspect of the job. “Communication can be challenging for a lot of tech people,” she said.

Thanks to help from an informal mentor and the company’s training program, Ippolito eventually found her voice. “They challenged me early on to come out of my shell, and it made a big difference,” she said.

Now she makes a point of mentoring her own team, offering regular feedback and translating corporate messages in ways that will best engage her team with the goals of the business.

In 2013, for example, the leadership team established a series of strategic pillars to frame its business goals. The team also built a communication campaign around it with messaging that goes out through company meetings, newsletters and the Web portal.

Part of Ippolito’s job as a manager is to discuss those pillars with her team. To make sure they made the connection between the company’s strategic goals and daily work, Ippolito presented them in terms of actionable projects — such as implementing hardware and software upgrades that will help the company with the pillar of “build a low-cost business model.”

“When my team sees how we can impact a strategic pillar, it makes them feel more connected to the company objectives,” Ippolito said.

A Hybrid Approach

Along with keeping in-house employees connected and up-to-date on the latest corporate objectives, Aflac is also challenged with having to engage its 70,000-member network of independent contract sales agents working from home offices.

Havel said communicating with contractors can be different than communicating with in-house employees. “They are focused on themselves and their own productivity, and our communication strategy has to take that into account,” Havel said.

But like internal employees, sales agents can access the company’s Web portal, newsletters and videos. Havel said the company also tailors many of these communication methods to make them more specific to the sales process.

In 2013, for instance, as Aflac aimed to address how health care reform will affect its business, Havel’s team took those messages and created a health care reform sales toolkit that included descriptions of issues likely to affect its clients and the deadlines employers have to meet to conform with new laws. The toolkit also included a pocket guide to health care reform for agents to review before prospective client meetings.

Moreover, the communications team set up a telephone line for agents to call to get answers to health care reform questions. “It’s all about giving them the information they need in a way that they can easily consume it,” Havel said.

Dubbed “surround sound” communication, the field communications team rolled out the health care reform toolkit last fall by promoting it via mail, email, webinars, videoconferences and regular meetings. Havel said the variety of communication vehicles aimed to ensure all of Aflac’s agents felt they had sufficient access to the information and that they were able to consume it in a way that appealed to them.

Havel’s team measured response to the toolkit campaign by tracking use of the tool, reaction to the tool and meetings set following its rollout.

“Within a week of the rollout, our agents set up thousands of meetings across the country,” Havel said.

Later measures show that overall visits to the sales intranet increased 16 percent year-over-year following the introduction of the new tools. Also, according to an agent satisfaction survey, 82 percent of broker development coordinators said the Health Care Reform Toolkit is the No. 1 way they build and maintain broker relationships, while 77 percent said it is the top way they grow their business.

Such measures are part of most major communication initiatives at Aflac, Havel said, because it demonstrates the strategic effect of their efforts.

It Has to Be Sustainable

The lesson in all of this is that, although communication can be a great strategic management tool, its effectiveness rests on the degree to which it is targeted. In other words, you can’t just throw information at people. Every piece of communication has to be relevant and specific to their job. “You need to look for meaningful ways to reach them and help them achieve their goals,” Havel said.

For companies aiming to establish a communications culture similar to Aflac’s, Tillman suggests starting small. Pilot one new communication tool or meeting format, and then measure it through interviews or engagement surveys.

Above all, Tillman said to ensure the company’s leadership is on board for the long term. Every manager and leader has to be willing to make constant communication part of his or her day-to-day work.

“This kind of culture takes time to nurture,” Tillman said. “And you want to work out the kinks before you roll out a big initiative.”

Sarah Fister Gale is a freelance writer based in the Chicago area. She can be reached at editor@talentmgt.com.