Manage Your HumanSigma

Transcription

1 Manage Your HumanSigma

2 The Employee-Customer Encounter 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.

3 The Gallup Path To reliably influence these... SUSTAINABLE GROWTH REAL PROFIT INCREASE STOCK INCREASE ENGAGED RESIDENTS ENGAGED EMPLOYEES... these must be managed. ENTER HERE IDENTIFY STRENGTHS THE RIGHT FIT GREAT MANAGERS

4 Whom do you build a company around? Employees? Residents & Family Members? Copyright , 2006 The Gallup Organization, Princeton, NJ. All rights reserved. 3

5 What Is HumanSigma? A holistic approach to optimizing a company s 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.

6 Team Member Engagement ENGAGED EMPLOYEES ENTER HERE GREAT MANAGERS IDENTIFY STRENGTHS THE RIGHT FIT Copyright , 2006 The Gallup Organization, Princeton, NJ. All rights reserved. 5

7 Net Loyal Customer Creation Bottom 3 The Worst 1% 5% % -14 4th QTL -2 3rd QTL 27 2nd QTL 40 1st QTL % 77 5% 88 1% 100 Top 7-63 The Best ,000 CSRs

8 The Sorting Effect Poor Question Low rating High rating I feel I am paid the right amount. Great Question Low rating High rating At work, I have the opportunity to do what I do best every day. More productive workgroups Less productive workgroups

9 The 12 Questions That Matter 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 The Gallup Organization, Princeton, NJ. All rights reserved.

10 Gallup Engagement Hierarchy Opportunities to learn and grow Progress in last six months I have a best friend at work Coworkers committed to quality Mission/Purpose of company At work, my opinions seem to count How do we grow? Do I belong? Growth Teamwork Someone encourages my development Supervisor/Someone at work cares Recognition last seven days Do what I do best every day I have materials and equipment I know what is expected of me at work What do I give? What do I get? Management Support Basic Needs Copyright The Gallup Organization, Princeton, NJ. All rights reserved.

11 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.

12 Q Meta-Analysis Study Information Analysis of: of: 681,799 employees 23,910 business units* 125 organizations** industries Correlations of of Q to: to: turnover/retention customer metrics safety absenteeism shrinkage productivity profitability * Includes business units in 23 countries in Asia, Central/South America, Europe, and North America ** 20 organizations exclusively outside the United States

13 Engagement Drives Profitability Engagement Percentile st Percentile 10 th 20 th 30 th 40 th 50 th 60 th 70 th 80 th 90 th 99 th Percentile Average % Gain/Loss in Profitability

14 Nurse Turnover by Quartile 40% 30% 30.3% 20% 10% 9.9% 13.0% 18.8% 0% Top 25% Middle Quartiles Bottom 25% Q12 Quartile Copyright 2002 The Gallup Organization, Princeton, NJ. All rights reserved. 205

15 Employee Engagement & Avoidable Complications Bottom Quartile 3rd Quartile 2nd Quartile Top Quartile Complication Index Correlation-regression analysis of Engagement GrandMean and Complication Index statistically significant at -.23 (n=152)

16 Employee Engagement & Avoidable Deaths 0.85 Bottom Quartile 3rd Quartile 2nd Quartile Top Quartile Mortality Index

17 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

18 Engagement Drives Innovation 30% 27% Percent Strongly Agreeing With All Four Items 20% 10% 0% 2% Not Engaged Engaged Of Those That Are

19 Employee Engagement Related to Innovation Dollars Saved per Idea Implemented $12,000 $11,061 $10,000 $8,000 $6,000 $4,000 $4,065 $2,000 $0 Top Quartile Engagement Bottom Quartile Engagement

20 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 company s future. 6% of US working population strongly agree to all items

21 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

22 Points of Customer Impact LOYAL RESIDENTS/FAMILY MEMBERS ENGAGED EMPLOYEES Copyright 2004 The Gallup Organization, Princeton, NJ. All rights reserved.

23 Understanding Customer Engagement When it comes to customers, feelings are facts. -Simon Cooper, President & COO, Ritz-Carlton Hotel Company LLC.

24 Core 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.

25 The 11 Questions L 3 A 8 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 can t 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.

26 The Emotional Attachment Hierarchy Passion. This resident/family member feels the brand is perfect for her, that she can t live without it. Pride. The resident/family member feels really good about the brand, and how using or owning the brand reflects upon him. Integrity. The resident/family member s feelings of brand integrity will depend on whether he is treated fairly by the company, both routinely and when something goes wrong. Confidence. The resident/family member feels the brand is trustworthy and keeps its promises. Copyright , 2006 The Gallup Organization, Princeton, NJ. All rights reserved.

27 Every company has four different types of customers Actively Disengaged Fully Engaged Fully Engaged Strongly attached and loyal. These are your best customers. Engaged Somewhat emotionally attached but not yet fully engaged Not Engaged Engaged Not Engaged Emotionally and attitudinally neutral; no positive association Actively Disengaged Active emotional detachment; occasional antagonism

28 HumanSigma The HumanSigma approach is based on five core principles that our research and experience have found facilitate the effective management of the employee-customer encounter:

29 HumanSigma Principles (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 transactional and transformational intervention activities.

30 HumanSigma Principle #1: (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.

31 HumanSigma Principle #2: Feelings Are Facts (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.

32 Emotionally engaged customers have lower attrition rates 7% ATTRITION RATES OF BANK CUSTOMERS (account closures per six months) Copyright 2005 Harvard Business Review School Publishing Corporation. All rights reserved. 6% 5% 4% 3% 2% 1% 0% 3.8% 6.0% 5.8% Engaged Satisfied Dissatisfied

33 Copyright 2005 Harvard Business Review School Publishing Corporation. All rights reserved. $300 $200 $100 $0 Emotionally engaged customers spend more AVERAGE MONTHLY SPENDING BY CREDIT CARD CUSTOMERS $251 $136 $136 Engaged Satisfied Dissatisfied

34 HumanSigma Principle #3: Think Globally, Act Locally (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.

35 The majority of Green Zone hotels have highly engaged work force CE11 Past 12 Months % Fully Engaged 70 Red Zone < 46% Yellow Green Zone 54%+ Fully Engaged 47%-53% Fully Engaged Q12 Grand Means (4.01)

36 The majority of red zone hotels have low levels of employee engagement. CE11 Past 12 Months % Fully Engaged 70 Red Zone < 46% Yellow Green Zone 54%+ Fully Engaged 47%-53% Fully Engaged Q12 Grand Means (4.01)

37 Three Green Zone hotels have less engaged workforces CE11 Past 12 Months % Fully Engaged 70 Red Zone < 46% Yellow Green Zone 54%+ Fully Engaged 47%-53% Fully Engaged Q12 Grand Means (4.01)

38 Red Zone hotels with more engaged work forces CE11 Past 12 Months % Fully Engaged 70 Red Zone < 46% Yellow Green Zone 54%+ Fully Engaged 47%-53% Fully Engaged Q12 Grand Means (4.01)

39 HumanSigma Principle #4 (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. 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 unit level exponentially drive operational and financial performance and growth.

40 HumanSigma Quadrants 70% 1.7 boost 240% 3.4 boost Optimized % 1.7 boost

41 HumanSigma Principle #5 (5) Improvement in local HumanSigma performance also requires attention to a combination of transactional and transformational intervention 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 that focus 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.

42 Progress on Goals During Impact Planning 4.7 Did not make progress on action planning goals Made progess on action planning goals Q 12 GrandMean in Wave II Q 12 GrandMean Wave I 2005

43 Patients and Physicians Have Similar Perceptions of Nursing for Health System Physician perceptions of nursing and care delivery Delivered quality care all shifts/departments Overall quality of nursing care Nurses judgment when to call doctor Competency of staff nurses Teamwork between doctors and nurses Score Percentile 30th 26th 30th 34th 36th Patient perceptions of nursing and care delivery Nurses anticipated needs Nurses explained procedures Nurses helped calm fears Nurses responded to requests Score Percentile 14th 10th 11th 13th

44 Considerations for Potential Role-Fit Past Performance Talent to Role Fit (Gallup Assessment) Relevant Skills & Knowledge Overall Fit Position, Culture, and Team

45 Impact of Nurse Talent on Patient Service Recommend Conditional Non-recommend Patient Service: Number of positive comments spontaneously volunteered by patients per nurse annually

46 Associates Who Were Selected For Talent Are More Engaged Under Cut Off 4.30 Made Cut Off Q12 GrandMean th rd st nd th 74 th 60 th 67 th 3.80 Sales Marketing Front Office Service Fulfillment

47 HumanSigma Summary (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.