Article Review on Manage your Human Sigma

- John H. Fleming, Curt Coffman, and James K. Harter)

By:

Anusha Avire (2T3-05)

G. Sai Sowjanya (2T3-17)

About the Authors

John H. Fleming, Ph.D.:

Is a Principal of Gallup and Chief Scientist for Gallup's

Customer Engagement and Human Sigma practices.

Fleming is a coauthor of the Harvard Business Review article

"Manage Your Human Sigma.“

About the Authors

Curt Coffman

• A New York Times Bestselling Author, researcher, business

scientist, consultant to the University of Denver, Fortune

100 and 500 organizations, MBA and Executive Fellow at

the Daniels School of Business, Curt Coffman has invested

30+ years in the science of high performance cultures.

About the Authors

James K. Harter, Ph.D.

Is chief scientist, workplace management and well-being, for

Gallup’s workplace management practice.

His research has been reported in several business bestsellers and

in academic articles, book chapters, and publications such as USA

Today, the Wall Street Journal, and the New York Times.

He is co-author of the New York Times bestseller 12: The

Elements of Great Managing, an exploration of the 12 crucial

ingredients for creating and harnessing employee engagement.

Why did we choose this article???

“It takes months to find a customerbut seconds to loose one”

Let’s Get Introduced To The Article

For Measuring And Managing Interactions

Between Customers And Employees:

Emotions-judgments and behavior are more powerful.

Measured and managed locally

It’s possible to arrive at a single measure of effectiveness; this

measure has a high correlation with financial performance.

Organizations must conduct both short-term, transactional

interventions and long-term, transformational ones.

Emotions Frame The Encounter

• Six Sigma processes are data driven, rational, and analytic.

• Widespread use of Six Sigma and TQM methodologies has resulted

in vastly improved product quality over the past two decades.

• Inspired by these improvements, businesses have tried to apply Six

Sigma principles in sales and service settings.

• But nothing human is ever that simple. People may think that their

behavior is purely rational, but it rarely is.

Twenty years of research in two very different fields—neuroscience

and behavioral economics—has established quite clearly that people

base their decisions on a complicated mixture of emotion and reason.

Indeed, recent work suggests that emotions may play a larger role than

analysis.

Emotions Frame The Encounter

Customer Engagement.

• Clearly, a Six Sigma approach to measuring and managing the

quality of the employee-customer interaction needs to take

customers’ emotions into account.

• Measures of customer engagement:

1. The first dimension it looks at is confidence

2. The second is integrity.

3. The next element is pride

4. The fourth dimension is passion

Fully engaged customers deliver a 23% premium over the average

customer in terms of share of wallet, profitability, revenue, and

relationship growth.

Emotions Frame The Encounter

Employee Engagement.

• Every interaction an employee has with a customer represents an

opportunity to build that customer’s emotional connection—or to

diminish it.

Emotions Frame The Encounter

Employee Engagement.

• Performance metrics that acknowledge the importance of emotional

engagement—on the part of both customers and employees—

provide much stronger links to desired financial and operational

outcomes.

• But deciding which metrics to use is just the first step toward

effective management of the employee-customer encounter.

• Deciding how to deploy them is equally important.

• Unfortunately, in many companies, metrics designed with the right

intentions are often deployed in the wrong ways.

The Encounter Must Be Measured Locally

• Local variability shows up on virtually every performance metric

they have examined.

• For sales and service organizations, unmanaged variability in the

quality of the customer experience represents a significant threat to

the enterprise’s sustainability, because customers experience

variation, not averages.

• The only way to improve local performance is to provide feedback

at the level where the variability originates.

• When the employee-customer encounter is assessed at the level of

the local work group, executives can learn a lot about organizational

performance.

• Local performance variation is the scourge of organizations that

aspire to high performance.

The Encounter Must Be Measured Locally

• Unfortunately, in most organizations, variability in the effectiveness of

the employee-customer encounter goes largely undiagnosed. As a

result, revenues and profits are bled off, and growth is anemic.

• The factors that are common across the enterprise—product, price,

processes, policies, and so forth—can’t, by definition, explain local

variability (they often play a critical role in driving customer

engagement, of course).

• If these factors don’t differ from place to place, the only remaining

culprit is the way those processes and policies are implemented locally.

• To reduce variability in the customer experience, businesses must focus

on reducing variability in local “people” processes (the “who” and

“how” of implementation).

• The power of a local focus on reducing variability lies in its simplicity

and flexibility. Each unit can identify and correct its own problems.

The Link to Financial Vitality

• Human sigma Employee + Customer Engagement=single

measurement

• A survey was conducted, they identified ten top performing

stores.

• There’s assumption was wrong regarding their survey. Only

one store appeared in the top list following customer and

employee engagement.

• $32 million in additional annual profits for the entire chain.

Two levels are in need for improvement.

• Those who engage employees without engaging customers.

• Those who engage customers without engaging employees.

Top three levels are to be optimized: localperformance variability should be reduced andoverall performance should be increased.

HOW TO GET THERE

How to manage and reduce variability at the local level,

here are the three quick points:

• Responsibility for human sigma must be centralized.

• Local manager is important factor in local group

performance

• Some companies need to overhaul their HR practices

Responsibility for human sigma must

be centralized

• Data about customers: Marketing team

• Data regarding employees: HR team

• Data regarding finance: Finance Team

• Should be measured and monitored by an executive who as

an authority to initiate and manage change.

Employee-

customer

encounter

can be drawn

Local manager is important factor in local group

performance

• Foster employees learning or stave them.

• Should use familiar tools for improvement of performance

of the employees.

• If none effects the performance managers should be

replaced.

Some companies need to overhaul their HR

practices

• Transformational interventions may be necessary.

• If human sigma numbers are lower than expected then

broader intervention should be needed.