47
Manage Your HumanSigma ® ®
Manage Your HumanSigma
In manufacturing, value is created on the factory floor when a product is made available for sale.
But in sales and services, value is created when an employee meets and interacts with a customer. Indeed, this employee-customer encounter is the factory floor of
sales and services.
To achieve meaningful operational and financial improvements, the employee-customer encounter must be measured and managed.
The Employee-Customer Encounter
ENTERHEREHERE
IDENTIFYSTRENGTHS
GREATMANAGERS
ENGAGEDRESIDENTS
SUSTAINABLEGROWTH
REAL PROFITINCREASE
STOCKINCREASETo
reliably influence these ...
... these must be
managed.
... these must be
managed.
THERIGHT FIT
ENGAGEDEMPLOYEES
The Gallup Path
Whom do you build a company around?
3
Employees? Residents &Family Members?
Copyright 1996-2000, 2006 The Gallup Organization, Princeton, NJ. All rights reserved.
A holistic approach to optimizing a companys vital signs.
Like Six Sigma, focus on reducing variability and improving organizational performance.
Unlike Six Sigma, focus on the human aspects of organizational performance to drive profitability and growth.
What Is HumanSigma?
Team Member Engagement
IDENTIFYSTRENGTHS THE
RIGHT FIT
GREATMANAGERS
ENGAGEDEMPLOYEES
ENTERHERE
5Copyright 1994-200, 2006 The Gallup Organization, Princeton, NJ. All rights reserved.
Net Loyal Customer Creation
100
Top 7
The Best
The Worst88
1%
77
5%
71
10%
-100
Bottom3
-63
1%
-31
5%
-14
10%
-2
4thQTL
40
2ndQTL
27
3rdQTL
5,000 CSRs
61
1stQTL
The Sorting Effect
More productive workgroups
High ratingLow rating
Poor Question
I feel I am paid the right amount.
Less productive workgroups
High ratingLow rating
Great Question
At work, I have the opportunity to do what I do best every day.
I know what is expected of me at work. I have the materials and equipment I need to do my work right. At work, I have the opportunity to do what I do best every day. In the last seven days, I have received recognition or praise for doing
good work. My supervisor, or someone at work, seems to care about me as a person. There is someone at work who encourages my development. At work, my opinions seem to count. The mission or purpose of my company makes me feel my job
is important. My fellow employees are committed to doing quality work. I have a best friend at work. In the last six months, someone at work has talked to me about
my progress. This last year, I have had opportunities at work to learn and grow.
Copyright 1992-1999 The Gallup Organization, Princeton, NJ. All rights reserved.
The 12 Questions That Matter
Gallup Engagement Hierarchy
Opportunities to learn and growProgress in last six months
I have a best friend at workCoworkers committed to qualityMission/Purpose of companyAt work, my opinions seem to count
Someone encourages my developmentSupervisor/Someone at work caresRecognition last seven daysDo what I do best every day
I have materials and equipmentI know what is expected of me
at work
Growth
Teamwork
ManagementSupport
BasicNeeds
What do I get?
What do I give?
Do I belong?
How do we grow?
Copyright 1992-1999 The Gallup Organization, Princeton, NJ. All rights reserved.
Employee Engagement Groups
28% 55% 17%Engaged Not Engaged Actively Disengaged
These employees are loyal and psychologically committed to the organization. They are more productive and more likely to stay with their company for at least a year.
These employees may be productive, but they are not psychologically connected to their company. They are more likely to miss workdays and more likely to leave.
These employees are physically present but psychologically absent. They are unhappy with their work situation and insist on sharing this unhappiness with their colleagues.
Correlations of Q 12 to:
turnover/retention customer metrics safety absenteeism shrinkage productivity profitability
Correlations of Q 12 to:
turnover/retention customer metrics safety absenteeism shrinkage productivity profitability
Analysis of:
681,799 employees
23,910 business units*
125 organizations**
37 industries
Analysis of:
681,799 employees
23,910 business units*
125 organizations**
37 industries
Q12 2006 Meta-Analysis Study
Information
* Includes business units in 23 countries in Asia, Central/South America, Europe, and North America
** 20 organizations exclusively outside the United States
Engagement Drives Profitability
-79.5
-45.6-29.9
-18.1-8.7
0.08.7
18.129.1
44.1
78.7
-100
-80
-60
-40
-20
0
20
40
60
80
100
Engagement Percentile
Ave
rage
% G
ain/
Loss
in P
rofit
abili
ty
1st Pe
rcen
tile
10th
20th
30th
40th
99th P
erce
ntile60
th
70th
80th
90th
50th
Nurse Turnover by Quartile
Q12 Quartile
205
9.9%13.0%
18.8%
30.3%
0%
10%
20%
30%
40%
Top 25% Middle Quartiles Bottom 25%
Copyright 2002 The Gallup Organization, Princeton, NJ. All rights reserved.
Employee Engagement & Avoidable
Complications
0.75
0.77
0.79
0.81
0.83
0.85
0.87
Complication Index
Bottom Quartile 3rd Quartile 2nd Quartile Top Quartile
Correlation-regression analysis of Engagement GrandMean and Complication Index statistically significant at -.23 (n=152)
Employee Engagement & Avoidable Deaths
0.65
0.7
0.75
0.8
0.85
Mortality Index
Bottom Quartile 3rd Quartile 2nd Quartile Top Quartile
Innovation and Engagement
Innovation Index My current job brings out my most creative ideas
I feed off of the creativity of my colleagues
My company encourages new ideas that defy conventional wisdom I have a friend at work who I share new ideas with
Engagement Drives Innovation
2%
0%
10%
20%
30% 27%
Percent Strongly Agreeing With All
Four Items
Of Those That Are
Not Engaged Engaged
Employee Engagement Related to Innovation
$11,061
$4,065
$0
$2,000
$4,000
$6,000
$8,000
$10,000
$12,000
Top Quartile Engagement Bottom QuartileEngagement
Dollars Saved per Idea Implemented
Change Management Index
There is open communication throughout all levels of the organization.
My supervisor is an active supporter of the changes that affect our group.
I am asked for my input regarding the changes that affect my work.
Leaders in my company help me see how changes made today will affect my companys future.
6% of US working populationstrongly agree to all items
Ability to manage change relates to employee
engagement index
Top-quartile on Change Management Index: 77% engaged 23% not engaged 0% actively disengaged
Bottom-quartile on Change Management Index: 1% engaged 45% not engaged 54% actively disengaged
Points of Customer Impact
ENGAGEDEMPLOYEES
LOYALRESIDENTS/FAMILY MEMBERS
Copyright 2004 The Gallup Organization, Princeton, NJ. All rights reserved.
Understanding Customer EngagementUnderstanding Customer EngagementUnderstanding Customer EngagementUnderstanding Customer Engagement
When it comes to customers, feelings are facts.
-Simon Cooper, President & COO, Ritz-Carlton Hotel Company LLC.
Core Principles of Customer EngagementCore Principles of Customer EngagementCore Principles of Customer EngagementCore Principles of Customer Engagement
1. Customers are not strictly rational; your most profitable customers have strong emotional bonds with your company.
2. Level of engagement drives the long-term financial success you will have with each customer.
3. Every time your company touches a customer, they either become a little more, or a little less, engaged but they never stay the same.
4. Simply satisfying customers is not enough. Satisfaction is the cost of entry; necessary but not sufficient.
5. Your company has as many brands as there are customer touch points.
6. Strong customer relationships must be managed locally.
The 11 Questions
Overall, how satisfied are you with Brand A?How likely are you to continue to choose Brand A?How likely are you to recommend Brand A to a
friend/associate?
I cant imagine a world without Brand A .Brand A is the perfect company for people like me.Brand A always treats me with respect.I feel proud to be a Brand A customer.If a problem arises, I can always count on Brand A to reach a
fair and satisfactory resolution.Brand A always treats me fairly.Brand A always delivers on what they promise.Brand A is a name I can always trust.
L3
A8
The Emotional Attachment Hierarchy
Confidence. The resident/family member feels the brand is trustworthy and keeps its promises.
Integrity. The resident/family members feelings of brand integrity will depend on whether he is treated fairly by the company, both routinely and when something goes wrong.
Pride. The resident/family member feels really good about the brand, and how using or owning the brand reflects upon him.
Passion. This resident/family member feels the brand is perfect for her, that she cant live without it.
Copyright 1994-200, 2006 The Gallup Organization, Princeton, NJ. All rights reserved.
Every company has four different types of Every company has four different types of Every company has four different types of Every company has four different types of
customerscustomerscustomerscustomers
Fully Engaged Strongly attached and loyal. These are your best customers.
Engaged Somewhat emotionally attached but not yet fully engaged
Not Engaged Emotionally and attitudinally neutral; no positive association
Actively Disengaged Active emotional detachment; occasional antagonism
Fully Engaged
Engaged
Actively Disengaged
Not Engaged
The HumanSigma approach is based on fivecore principles that our research and experience have found facilitate the effective management of the employee-customer encounter:
HumanSigma
(1) Like vital signs, the employee-customer encounter must be conceptualized and managed holistically.
(2) The employee-customer encounter is fundamentally emotional.
(3) The employee-customer encounter must be measured and managed locally.
(4) The effectiveness of the employee-customer encounter can be quantified and summarized in a single performance metric the HumanSigma metric that is powerfully related to financial performance.
(5) Improvement in local HumanSigma performance also requires attention to a combination of transactionaland transformational intervention activities.
HumanSigma Principles
(1) Like vital signs, the employee-customer encounter must be conceptualized and managed holistically.
Because value creation in SSOs flows from the interaction between employees and customers, both sides of the employee-customer encounter must be viewed as interrelated and mutually-dependent systems that should be measured and managed as a coherent whole, not as independent activities housed within separate organizational entities.
HumanSigma Principle #1:
(2) The employee-customer encounter is fundamentally emotional.
Because both employees and customers are human agents, the measurement and management of the employee-customer encounter must acknowledge and incorporate the critical emotional infrastructure of human behavior and decision-making, yielding a concept that extends well beyond traditional considerations of employee and customer satisfaction a concept we refer to as engagement.
HumanSigma Principle #2:
Feelings Are Facts
Emotionally engaged customers have lower attrition rates
ATTRITION RATES OF BANK CUSTOMERS (account closures per six months)
3.8%
6.0% 5.8%
0%
1%
2%
3%
4%
5%
6%
7%
Engaged Satisfied Dissatisfied Cop
yrig
ht
2005
Har
vard
Bus
ines
s R
evie
w S
choo
l Pub
lishi
ng C
orpo
ratio
n.
All
right
s re
serv
ed.
AVERAGE MONTHLY SPENDING BYCREDIT CARD CUSTOMERS
$251
$136 $136
$0
$100
$200
$300
Engaged Satisfied Dissatisfied Cop
yrig
ht
2005
Har
vard
Bus
ines
s R
evie
w S
choo
l Pub
lishi
ng C
orpo
ratio
n.
All
right
s re
serv
ed.
Emotionally engaged customers spend more
(3) The employee-customer encounter must be measured and managed locally.
While many other kinds of organizational activities may be managed effectively from the top down, the employee-customer encounter is an intensely local phenomenon whose effectiveness varies considerably from location to location within the same company. Because of this variability in local effectiveness, its measurement and management must be focused locally.
HumanSigma Principle #3:
Think Globally, Act Locally
The majority of Green Zone hotels have
highly engaged work force
Q12 Grand Means(4.01)
CE11 Past 12 Months% Fully Engaged
30
35
40
45
50
55
60
65
70
3.7 3.8 3.9 4 4.1 4.2 4.3 4.4 4.5
Red
Zon
e <
46%
Yel
low
G
reen
Zon
e 54
%+
Ful
ly E
ngag
ed
4
7%-5
3%
Ful
ly E
ngag
ed
The majority of red zone hotels have low levels of
employee engagement.
Q12 Grand Means(4.01)
CE11 Past 12 Months% Fully Engaged
30
35
40
45
50
55
60
65
70
3.7 3.8 3.9 4 4.1 4.2 4.3 4.4 4.5
Red
Zon
e <
46%
Yel
low
G
reen
Zon
e 54
%+
Ful
ly E
ngag
ed
4
7%-5
3%
Ful
ly E
ngag
ed
Three Green Zone hotels have less engaged
workforces
Q12 Grand Means(4.01)
CE11 Past 12 Months% Fully Engaged
30
35
40
45
50
55
60
65
70
3.7 3.8 3.9 4 4.1 4.2 4.3 4.4 4.5
Red
Zon
e <
46%
Yel
low
G
reen
Zon
e 54
%+
Ful
ly E
ngag
ed
4
7%-5
3%
Ful
ly E
ngag
ed
Red Zone hotels with more engaged work
forces
Q12 Grand Means(4.01)
CE11 Past 12 Months% Fully Engaged
30
35
40
45
50
55
60
65
70
3.7 3.8 3.9 4 4.1 4.2 4.3 4.4 4.5
Red
Zon
e <
46%
Yel
low
G
reen
Zon
e 54
%+
Ful
ly E
ngag
ed
4
7%-5
3%
Ful
ly E
ngag
ed
(4) The effectiveness of the employee-customer encounter can be quantified and summarized in a single performance metric the HumanSigmametric 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 HumanSigmametric. The interactive effects of employee and customer engagement at the local unit level exponentially drive operational and financial performance and growth.
HumanSigma Principle #4
Optimized
3.4
1.7
1.7
1.0
70%
boost240%
boost
70%
boost
HumanSigma Quadrants
(5) Improvement in local HumanSigma performance also requires attention to a combination of transactional and transformationalintervention activities.
Transactional activities, such as action planning and training, are cyclical interventions that tend to be more topical and short-term in focus, but recur regularly. Transformational activities, on the other hand, are structural interventions thatfocus on how companies select employees, select and promote managers, pay and appraise employees, do succession planning, and recognize and develop employees. Transformational activities are focused on creating an organizational infrastructure that supports HumanSigma.
HumanSigma Principle #5
2.7
2.9
3.1
3.3
3.5
3.7
3.9
4.1
4.3
4.5
4.7
2.7 2.9 3.1 3.3 3.5 3.7 3.9 4.1 4.3 4.5 4.7
Did not make progresson action planninggoalsMade progess onaction planning goals
Progress on Goals During Impact Planning
Q12
Gra
ndM
ean
in W
ave
II 20
06
Q12 GrandMean Wave I 2005
Patients and Physicians Have Similar
Perceptions of Nursing for Health System
36th3.74Teamwork between doctors and nurses
34th3.64Competency of staff nurses
30th3.62Nurses judgment when to call doctor
26th3.54Overall quality of nursing care
30th3.31Delivered quality care all shifts/departments
PercentileScore
Physician perceptions of nursing and care delivery
13th3.27Nurses responded to requests
11th3.32Nurses helped calm fears
10th3.31Nurses explained procedures
14th3.25Nurses anticipated needs
PercentileScore
Patient perceptions of nursing and care delivery
Considerations for Potential Role-Fit
Past Performance
Talent to Role Fit(Gallup Assessment)
Relevant Skills &
Knowledge
Overall Fit Position,Culture, and
Team
Impact of Nurse Talent on Patient
Service
Patient Service: Number of positive comments spontaneously volunteered by patients per nurse annually
9
2.75
1.5
0
1
2
3
4
5
6
7
8
9
10
RecommendConditionalNon-recommend
Associates Who Were Selected For Talent Are More
Engaged
3.90
4.084.10
3.98
4.30
4.23
4.40
4.20
3.80
4.00
4.20
4.40
Sales Marketing Front Office Service Fulfillment
Q12
Gra
ndM
ean
Under Cut OffMade Cut Off
60th
87th
74th
83rd
60th
91st
67th
82nd
(1) The employee-customer encounter must be conceptualized and managed holistically.
(2) The employee-customer encounter is fundamentally emotional.
(3) The employee-customer encounter must be measured and managed locally.
(4) The effectiveness of the employee-customer encounter can be quantified and summarized in a single performance metric the HumanSigma metric that is powerfully related to financial performance.
(5) Improvement in local HumanSigma performance also requires attention to a combination of transactional and transformational intervention activities.
HumanSigma Summary
