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Human Sigma by John H. Fleming and Jim Asplund

Friday, 4 December 2009 | Leadership Library

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humansigma

Details
Primary Author First NameJohn H.
Primary Author SurnameFleming, Ph.D
Full TitleHuman Sigma
Sub TitleManaging the Employee-Customer Encounter
Description 
Publication DateOctober 2007
ISBN-13 
BindingHardcover
Edition 
Price 
Publisher Gallup Press   
Subject Essential reading for today's global business leaders, Human Sigma shows how sales and service companies can flourish in the new global economy. It reveals a profoundly different method for managing human systems for growth. Blending strategic analysis with hands-on, practical steps and advice, Human Sigma will change how you view your work, your employees, and your customers forever.
Contents  
No. of Pages John H. Fleming, Ph.D and Jim Asplund
Web Link  

 

Description

In the past, companies have not applied rigor and precision to measuring and managing the "softer," human side of business. That is about to change. Human Sigma reveals that there are right and wrong ways to assess and manage the health of a company's employee and customer relationships. This rigorous new approach -- HumanSigma -- offers a new perspective on organizational performance that hinges on five core principles all great companies must embrace.
Six Sigma changed the face of manufacturing quality, creating excellence by reducing variance in finished goods, revolutionizing businesses, and boosting profits. Now, Human Sigma is poised to do the same for sales and service organizations.
This book offers an innovative, research-based approach to one of the toughest challenges facing business today: how to drive success by effectively managing the moments where employees interact with customers. Based on research spanning 10 million employees and 10 million customers around the globe, the Human Sigma approach combines a proven method for assessing the health of the employee-customer encounter with a disciplined process for improving it.
Human Sigma is based on five new rules to bring excellence to the way employees engage and interact with customers:

  • RULE #1: E Pluribus Unum. Employee and customer experiences must be managed together -- not as separate entities.
  • RULE #2: Feelings Are Facts. Emotions drive and shape the employee-customer encounter.
  • RULE #3: Think Globally, Measure and Act Locally. The employee-customer encounter must be measured and managed at the local level.
  • RULE #4: There Is One Number You Need to Know. Employee and customer engagement interact to drive enhanced financial performance. And this interaction can be quantified and summarized with a single performance metric.
  • RULE #5: If You Pray for Potatoes, You Better Grab a Hoe. This means that good intentions alone do not constitute a plan of action. Sustainable improvement in the employee-customer encounter requires disciplined local action coupled with a companywide commitment to changing how employees are recruited, positioned in roles, rewarded and recognized, and importantly, how they are managed.

Author biographies

  • John H. Fleming, Ph.D.,is a Principal of Gallup and Chief Scientist for Gallup's Customer Engagement and HumanSigma practices. He consults with Gallup's global clients to help them improve customer engagement and enhance their business effectiveness. Fleming is a coauthor of the Harvard Business Review article "Manage Your Human Sigma."
    Prior to joining Gallup, Fleming spent six years as a member of the psychology faculty at the University of Minnesota. He received his doctorate in social psychology and master's degree in psychology from Princeton University and his bachelor's degree from the College of William and Mary in Williamsburg, Virginia. He lives near Princeton, New Jersey, with his wife, Robin, and their daughters, Allison and Emma.
  • Jim Asplund is a Principal of Gallup and Chief Scientist for Strengths-Based Development. He leads Gallup's global research on the science of human strengths and how to apply them to improve organizational performance. Asplund is also one of Gallup's leading methodologists, specializing in complex research and development efforts.
    Prior to joining Gallup, Asplund spent eight years as a policy expert and lobbyist at the Minnesota Legislature, representing clients in the areas of taxation, education funding, and economic development. He earned his master's degree in public policy with emphasis in mathematical demography from the University of Minnesota and his bachelor's degree in mathematics from Grinnell College in Iowa. Asplund lives near St. Paul, Minnesota, with his wife, Susan, and their sons, Jakob and Jonas.

Reviews

I love [the authors'] idea of increasing the application of measurement in the human dimension.
Marshall Goldsmith, in BusinessWeek

What Six Sigma did for manufacturing, Human Sigma will do for the service economy.
Ralph Oliva, Executive Director, Institute for the Study of Business Markets, Penn State University

This book is a powerful new tool for improving your company's performance and creating high-value engagements with your customers.
Philip Kotler, S.C. Johnson; Son Distinguished Professor of International Marketing, Northwestern University's Kellogg Graduate School of Management

Human Sigma reminds us of an important principle that is often overlooked inside the boardrooms and offices where business decisions are made: The world was built on relationships between human beings.
Brian J. Dunn, President and COO, Best Buy Co., Inc.

Human Sigma is essential reading for executives and managers everywhere. The concepts that John Fleming and Jim Asplund spell out in this book will help companies get the most out of their employees while inspiring deep and lasting relationships with customers.
Gerard Van Grinsven, President and CEO, Henry Ford West Bloomfield Hospital, Michigan

HumanSigma reminds us of an important principle that is often overlooked inside the boardrooms and offices where business decisions are made: the world was built on relationships between human beings.
Brian J. Dunn, President and COO, Best Buy Co., Inc.

Excerpted from Human Sigma

Five New Rules for Management
Lessons from some of the world's best companies
In the process of working with some of the best run companies in the world, we have learned a great deal about how the world's finest organizations unleash the power of their human systems and how the worst fail to do so. Though the specific ways that the HumanSigma [management] model may be implemented in your company may vary, the underlying philosophy can be boiled down to five new rules, which we list here . . .

  • Rule 1: You can't measure and manage the employee and customer experiences as separate entities. Because you must manage these human systems in tandem, you may need to reorganize.
    This is not a trivial issue. Most companies are not currently organized or prepared to manage employees and customers under the same organizational umbrella. But because the crucial juncture in creating value in sales and service organizations is the interaction between employees and customers, you must view both sides of the employee-customer encounter as interrelated and mutually dependent. As a result, you must assess and manage these human systems as a coherent whole, not as separate pieces. In practice, this means that you cannot separate the responsibility for the quality of a company's employee relationships from the responsibility for the quality of its customer relationships. They are interdependent, and you must not manage them in isolation.
    Who owns the employee experience at your company? Who owns the customer experience? How well integrated are your efforts to assess and manage the employee-customer encounter?
  • Rule 2: Emotion frames the employee-customer encounter. It's important not to think like an economist or an engineer when you're assessing employee-customer interactions. Emotions, it turns out, inform both sides' judgments and behavior even more powerfully than rational or dispassionate thinking. Because employees and customers are people first and employees or customers second, they are prone to all the volatility and irrationality that is the hallmark of being human.
    If companies are ever going to be able to truly understand their employees and customers, it's crucial that they take their employees' and customers' essential humanity seriously. Historically, this has been a tough sell because emotions or feelings have been viewed as messy, imprecise, nettlesome things that don't lend themselves well to rigorous management science. Besides, emotions don't conform to rational rules.
    But it's possible to reliably evaluate the emotional dimensions that are important to employees and customers. The measurement and management of the employee-customer encounter must acknowledge and incorporate the crucial emotional infrastructure of human behavior and decision making, yielding a concept that extends beyond traditional considerations of employee and customer satisfaction to a concept we call engagement.
    Have you incorporated these emotional components into your understanding of what drives your employee and customer relationships?
  • Rule 3: You must measure and manage the employee-customer encounter at a local level. Though companies can manage many kinds of organizational activities effectively from the top down, the employee-customer encounter is an intensely local phenomenon that can vary considerably from location to location within the same company. Because of the variability in local performance, you must measure and manage it locally.
    Are your corporate metrics and other activities aligned to support local accountability and action?
  • Rule 4: We can quantify and summarize the effectiveness of the employee-customer encounter in a single performance measure -- the HumanSigma metric -- that is powerfully related to financial performance. Our research has revealed that the two sides of the employee-customer encounter potentiate one another and can be quantified into a single HumanSigma metric. The interactive effects of employee and customer engagement at the local level exponentially drive operational and financial performance and growth.
    Does your company suffer from either an overabundance or a shortage of human systems performance metrics? How well integrated are the metrics you use? And how well do these metrics link up to your company's financial performance outcomes?
  • Rule 5: Improvement in local HumanSigma performance requires deliberate and active intervention through attention to a combination of transactional and transformational intervention activities. Measurement by itself is never enough to improve performance. Creating organizational change is hard work and requires active and disciplined intervention.
    Our work has found that few companies apply the full range of intervention activities required to generate real and sustainable change. Transactional activities, such as action planning, training, and other aggressive interventions, are cyclical interventions that tend to be topical and short-term in focus and to recur regularly. They are designed to help your company do what it already does -- but do it better. Transformational activities, on the other hand, are structural interventions that focus on how companies select employees, select and promote managers, pay and evaluate employees, do succession planning, and recognize and develop employees. Transformational activities focus on creating an organizational infrastructure that supports HumanSigma. They are designed to help your company come up with new ways to do things.

HumanSigma®

Gallup has developed a powerful new approach to measuring and managing human performance -- HumanSigma.
Gallup's HumanSigma methodology offers an innovative, research-based approach to one of the toughest challenges businesses face today: how to drive success by effectively managing the moments when employees interact with customers. Based on research spanning 10 million employees and 10 million customers around the globe, the HumanSigma approach combines a proven method for assessing the health of the employee-customer encounter with a disciplined process for improving it.
HumanSigma is based on five core principles to bring excellence to the way employees engage and interact with customers:

  • Employee and customer experiences must be managed together -- not as separate entities.
  • Emotions drive and shape the employee-customer encounter.
  • The employee-customer encounter must be measured and managed at the local level.
  • Employee and customer engagement interact to drive enhanced financial performance. This interaction can be quantified and summarized with a single performance metric.

Sustainable improvement in the employee-customer encounter requires disciplined local action coupled with a company-wide commitment to changing how employees are recruited, positioned in roles, rewarded and recognized, and importantly, how they are managed.
The HumanSigma approach provides a profoundly different method for managing an organization's human systems for growth. Blending strategic analysis with hands-on, practical steps and advice, HumanSigma changes how leaders view their work, their employees, and their customers.

Proven ROI

Over a recent one-year period, organizations employing HumanSigma management principles have outperformed their five largest competitors by 26% in gross margin and 85% in sales growth. Their customers buy more, spend more, return more often, and stay longer. In fact, companies that built this critical mass of employee engagement grew earnings per share (EPS) at 2.6 times the rate of companies that did not. This general pattern is consistent across every organization Gallup has studied in multiple industries all across the globe.

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