ARTICLE SUMMARY:“Manage Your Human Sigma”
...the interaction, both short term and long term interventions must be made. The Human Sigma approach was used in ten companies who collectively outperformed their five largest peers by 26% in gross margin and 85% in sales growth during 2003. The first core principle is elaborated on by addressing the behavior of people and the irrational mixture of emotion and reason that they gage their decisions on. This point leads the authors into an important determination: Emotionally satisfied customers contribute far more towards the bottom line than rationally satisfied ones do. Thus, “Emotional Satisfaction Matters Most”. An approach to measuring the customer engagement was then developed by combining customer loyalty and these four items: confidence, integrity, pride, and passion. The second core principle is addressed next by reporting the inevitable bias of company service claim such as “leader in customer satisfaction”. The authors believe that the local variables that appear in every performance study are great enough to completely minimize the differences between competing companies. The need is for companies to address performance on a local level, such as the quality of a specific employee’s workstation instead of labeling a company as “the best place to work”. Employees can affect profitability on two separate plains. First, the direct costs such as the output produced by an employee and certain training and replacement costs incurred by low retention, and second, “indirect customer outcomes” are generated by employees, who if committed, positively influence profits. The linear connection of employee attitudes affecting customer attitudes and customer attitudes affecting financial performance provide the rational for the authors third core principle. Human Sigma combines these complicated interactions into one measure of effectiveness. The companies that scored well on both employee and customer engagements performed better financially than those that scored high on only one but not both of these two interactions. Combining the scores of employee and customer engagements into a single s...