Follow This Path

3,015 views
2,815 views

Published on

http://www.bizsum.com - This book shows that the ultimate solution to reversing the current leadership trends of margin slashing, accounting trickery, and shareholder hoodwinking is to run an organization that can maintain and expand its customer base without slashing prices and without reducing its fiscal integrity. In the end, the success of your organization does not depend on your understanding of economics, or organizational development, or marketing. It depends on your understanding of psychology: how each individual employee and client connects with your company.

Published in: Education, Business, Technology
0 Comments
7 Likes
Statistics
Notes
  • Be the first to comment

No Downloads
Views
Total views
3,015
On SlideShare
0
From Embeds
0
Number of Embeds
8
Actions
Shares
0
Downloads
0
Comments
0
Likes
7
Embeds 0
No embeds

No notes for slide

Follow This Path

  1. 2. Follow This Path How the World’s Greatest Organizations Drive Growth by Unleashing Human Potential AUTHOR: Curt Coffman, Gabriel Gonzalez-Molina, Ph.D. and Ashok Gopal PUBLISHER: Warner Business Books DATE OF PUBLICATION: October 2002 NUMBER OF PAGES: 284 pages Book pic
  2. 3. THE BIG IDEA <ul><li>This book shows that the ultimate solution to reversing the current leadership trends of margin slashing, accounting trickery, and shareholder hoodwinking is to run an organization that can maintain and expand its customer base without slashing prices and without reducing its fiscal integrity. </li></ul><ul><li>In the end, the success of your organization does not depend on your understanding of economics, or organizational development, or marketing. </li></ul><ul><li>It depends on your understanding of psychology: </li></ul><ul><ul><li>how each individual employee and client connects with your company. </li></ul></ul>
  3. 4. An Emotion-Driven Economy <ul><li>Cutting-edge and responsive organizations today know how to chart through the strong currents of competition by keeping their customer and employee relations, not only intact, but dynamic. </li></ul><ul><li>They do this by connecting to them on an emotional level. When that happens, customers return because of the way they feel , or the good emotional responses they get from dealing with these companies. </li></ul><ul><li>This discovery on the need to tap good emotional responses from clients and employees has been phenomenal that now, there is a term when such a relationship occurs in the world of business: emotionally engaged customers and employees. </li></ul>
  4. 5. The Gallup Data <ul><li>How do we know that, indeed, an emotionally driven marketplace leads to continued success for your business? </li></ul><ul><ul><li>The Gallup Organization, one of the world’s leading polling groups, have conducted numerous studies on the subject, asking every major type of industry and conducting research on a global scale. </li></ul></ul><ul><ul><li>The study also crossed gender, race and ethnicity boundaries as it assembled data on various types of occupations, nationalities, age groups, levels of education and spending habits. </li></ul></ul><ul><ul><li>The results were far-reaching. </li></ul></ul><ul><ul><ul><li>The study showed that “good feeling” when doing business, especially when it involves employees and clients, leads to wide-reaching success in churning out profit. </li></ul></ul></ul>
  5. 6. The Gallup Data <ul><li>Welcome to the Emotional Economy </li></ul><ul><ul><li>In 1600, Giordano Bruno, a Dominican Friar, was burned at the stake in Rome because he had insisted that the earth did not remain motionless at the center of the universe. </li></ul></ul><ul><ul><ul><li>Many innovations – like technology – are embraced as long as they don’t shake up long-established foundations. </li></ul></ul></ul><ul><ul><ul><li>Machines are controllable and fixable. But then, the other system that fuels our businesses – human nature – is a whole other matter. </li></ul></ul></ul><ul><ul><ul><li>Humans are emotion-driven entities, and we know that emotions are messy in the workplace. </li></ul></ul></ul><ul><ul><ul><li>So much so that you don’t really want to deal with employee and customer-related tics and quirks, thinking that these take precious time from your work. </li></ul></ul></ul><ul><ul><ul><li>Sadly, your view is upside down. All those personal tics are clues to who those people really are – and more important, to the innate talents they possess. </li></ul></ul></ul>
  6. 7. The Gallup Data <ul><ul><li>Across all kinds of organizations, references to “human capital” are growing. </li></ul></ul><ul><ul><li>What does this term mean? </li></ul></ul><ul><ul><ul><li>The definitions are varied, but by whatever name, these references reflect a new alertness to the profound impact of human nature in the workplace. </li></ul></ul></ul><ul><ul><ul><li>Multinational organizations, such as the European </li></ul></ul></ul><ul><ul><ul><li>Commission, have been studying the economic implications of human capital. </li></ul></ul></ul><ul><ul><ul><li>They are examining, too, the harder-to-measure implications of talent and employee involvement in the workplace. </li></ul></ul></ul><ul><ul><ul><li>The common goal is this: to find the code of human nature’s role in shaping a company’s business outcomes. </li></ul></ul></ul>
  7. 8. The Unique Pathway of Emotions <ul><li>In his book “How the Mind Works,” Massachusetts Institute of Technology psychologist Steven Pinker notes that emotions are mechanisms that set the brain’s highest-level goals. </li></ul><ul><li>Once generated toward a favorable activity, an emotion triggers a “cascade of sub-goals that we call thinking and acting with no sharp line dividing thinking and feeling.” </li></ul><ul><ul><li>In other words, emotions drive our reactions, which, in turn, are ruled by the innate talent we possess and our propensity to be emotionally engaged. </li></ul></ul><ul><ul><li>Our natural predispositions explain our distinctive experiences. </li></ul></ul>
  8. 9. <ul><li>Here’s what the world’s most successful organizations don’t do: </li></ul><ul><ul><li>They don’t suppose that either superior college grades or comprehensive training is the only accurate or dependable indicator of the right person for the job. </li></ul></ul><ul><ul><li>Guarantee that employee incentives will ensure consistently better job performance. </li></ul></ul><ul><li>Rather, they depend on : human nature. </li></ul><ul><ul><li>They know that the emotions of both employees and customers create feelings, which drive their behavior. </li></ul></ul><ul><ul><li>The only way they activate this is through human interaction, the fastest and most powerful trigger of emotional states. </li></ul></ul>Emotions Are a Terrific Thing to Value
  9. 10. <ul><li>The implications of the effects of emotions are incredibly powerful and far-reaching. Emotions: </li></ul><ul><ul><li>Set the highest-level goals, including how hard a person works and how attached a person will stay to a brand or organization </li></ul></ul><ul><ul><li>Take place outside the rational, willful awareness and constitute emotional memory </li></ul></ul><ul><ul><li>Drive decision making, the emotional state of conscious awareness </li></ul></ul>Emotions Drive Business Outcomes
  10. 11. <ul><li>Most companies assume that anyone can excel in any job, provided they receive enough training and try hard enough. </li></ul><ul><li>Second, they take strengths for granted and try to fix weaknesses. </li></ul><ul><ul><li>This “competency” approach is a huge waste of energy and time because: </li></ul></ul><ul><ul><ul><li>Those who excel all display the same behaviors </li></ul></ul></ul><ul><ul><ul><li>Each of those behaviors can be learned </li></ul></ul></ul><ul><ul><ul><li>Each of these behaviors should be learned, because improving weaknesses leads to success </li></ul></ul></ul>Great Performance Can’t be Taught
  11. 12. <ul><li>This accepted way of regarding employees derives from a long-held competency-building tradition. </li></ul><ul><ul><li>Because of this, training is focused on identifying which abilities employees are lacking and then trying to fill in these unfortunate gaps. </li></ul></ul><ul><li>Therefore, an employee’s area of improvement is a not so subtle euphemism for his “area of weakness.” </li></ul><ul><ul><li>This mindset clouds our judgment, especially in being able to tap inherent talent from our personnel. </li></ul></ul><ul><ul><li>Many organizations believe that talent is scarce, a rare, precious resource that comes along all too infrequently. </li></ul></ul><ul><ul><li>Great organizations know that talent is an abundant resource waiting to be tapped. </li></ul></ul>Great Performance Can’t be Taught
  12. 13. The Right Talent is in Your Organizations right now <ul><li>It’s time to stop looking at – and treating – your employees as you’ve always done. </li></ul><ul><li>Your organization is filled with people who contain talent, in all kinds of combination. </li></ul><ul><li>If you take the time to identify what those combinations are, you will look at the people who work for you in a whole new way. </li></ul><ul><li>You’ll see the amazing resources they bring with them every day and long to use. That’s why it is time to: </li></ul><ul><ul><li>Understand that talent themes and categories exist </li></ul></ul><ul><ul><li>Reject the old position that “anyone can be trained for the job” </li></ul></ul><ul><ul><li>Put an end to the attempt to “fix weaknesses” </li></ul></ul><ul><ul><li>Function from a position based on employees’ strengths </li></ul></ul>
  13. 14. The Resource Waiting to be Used <ul><li>Employees can provide the pathway to profits and growth. </li></ul><ul><ul><li>With competition mounting on a global scale, no business or industry can afford to pay an employee for providing anything less than great performance – which means one that is emotion driven. </li></ul></ul><ul><li>The Gallup polls discovered that great organizations: </li></ul><ul><ul><li>Identify, select, and develop talent </li></ul></ul><ul><ul><li>Nurture their employees’ strengths. Roles are constantly being adapted to better suit these strong points. </li></ul></ul><ul><ul><li>Train to develop individual strengths </li></ul></ul><ul><ul><li>Understand that knowledge can be transferred from one person to another, but is always specific to the situation </li></ul></ul><ul><ul><li>Bolster strengths so that profits will grow </li></ul></ul>
  14. 15. <ul><li>Even the biggest emotion doubters will come around when they see how talent affects their business as what happened to a customer service manager of a large appliance manufacturer. </li></ul><ul><li>For years his company struggled to improve sales. Other than promotion, discounts, and rebates, there were few incentives to spark sales. </li></ul><ul><li>But the manager had an idea. </li></ul><ul><ul><li>He figured that if there was a range in the service performance of employees, and a range in the sales performance of dealers, then there was a way to combine the best of both worlds. </li></ul></ul>The Gift that Keeps on giving
  15. 16. <ul><li>Top dealers offering superior service would increase sales volume. </li></ul><ul><ul><li>First he tracked down the record of his best customer service employees and observed that they shared a pool of talents. </li></ul></ul><ul><ul><li>They exhibited a gift for creating and maintaining steady relationships with others, who liked them in return. </li></ul></ul><ul><ul><li>Additionally, they were dependable – and with sharp instincts, they could find solutions easily. </li></ul></ul><ul><li>He gave this group training in technical issues such as product inventory and logistics, and began his operation. </li></ul><ul><li>Totally immersed in the needs of their clients, they were more competitive and displayed a take-charge attitude. </li></ul>The Gift that Keeps on giving
  16. 17. Follow the Talent Route <ul><li>Are you convinced that talent is all around you, waiting to be tapped? </li></ul><ul><ul><li>If you want your work group to excel, to be the best it can be, you must tap into the essence of what drives people to perform the very best they can, over and over again. </li></ul></ul><ul><ul><li>Evaluating that talent begins when the finest performers in each role are identified. </li></ul></ul><ul><li>Here’s how the great organizations do it. They: </li></ul><ul><ul><li>Find out what makes top performers passionate about their work. </li></ul></ul><ul><ul><li>Pay a lot of attention to them to see how they build relationships </li></ul></ul><ul><ul><li>Keep track of their impact on others – great performers spur others to work better </li></ul></ul><ul><ul><li>Ask them how they process information as well as form their opinions about the work and the workplace </li></ul></ul>
  17. 18. Engaged Employees, The Rare Resource <ul><li>It may be obvious that within one company one unit is more productive than another. </li></ul><ul><li>However, it probably isn’t common knowledge that the variation in employee engagement within a company is greater than the variation of employee engagement between two companies in the same industry. </li></ul><ul><li>Just because employees are abundant doesn’t mean that they are engaged. </li></ul><ul><ul><li>Engaged employees are a rare and precious resource. </li></ul></ul><ul><ul><li>You may apply what you know of each of your employee’s strengths and talents by studying the Q12 or the twelve conditions of a great workplace, which in one way or another, make personnel more engaged with their work: </li></ul></ul><ul><ul><ul><li>I know what is expected of me at work </li></ul></ul></ul>
  18. 19. Engaged Employees, The Rare Resource <ul><ul><ul><li>I have the materials and equipment I need to do my work right </li></ul></ul></ul><ul><ul><ul><li>At work, I have the opportunity to do what I best do everyday </li></ul></ul></ul><ul><ul><ul><li>In the last seven days, I have received recognition or praise for doing good work </li></ul></ul></ul><ul><ul><ul><li>My supervisor, or someone at work, seems to care about me as a person </li></ul></ul></ul><ul><ul><ul><li>There is someone at work who encourages my development </li></ul></ul></ul><ul><ul><ul><li>At work, my opinion seems to count </li></ul></ul></ul><ul><ul><ul><li>The mission or purpose of my company makes me feel my job is important </li></ul></ul></ul><ul><ul><ul><li>My associates or fellow employees are committed to doing quality work </li></ul></ul></ul><ul><ul><ul><li>I have a best friend at work </li></ul></ul></ul><ul><ul><ul><li>In the last six months, someone at work has talked to me about my progress </li></ul></ul></ul><ul><ul><ul><li>This last year, I have had opportunities to learn and grow at work </li></ul></ul></ul>
  19. 20. The Four Keys of Great Managers <ul><li>Great managers employ just four keys to meet their goals: </li></ul><ul><ul><li>When selecting someone, they opt for talent, not simply experience, intelligence, or determination </li></ul></ul><ul><ul><li>When setting expectations, they understand the importance of defining the right outcomes, not the steps to get there </li></ul></ul><ul><ul><li>When motivating someone, they focus on the person’s strengths, not their weaknesses </li></ul></ul><ul><ul><li>When developing someone, they help find the right fit between talent and role. And they use the Q12 as a guide to understanding and developing their employees </li></ul></ul>
  20. 21. The Q12 Proof is Here <ul><li>Over and over again, hundreds of independent Gallup studies highlight a constant in the fluctuating economics of organizations. </li></ul><ul><li>There is a direct, causal link between the 12 conditions in the workplace and virtually every important business outcome of an organization. </li></ul><ul><ul><li>It turns out that those business units that scored high in the Q12 consistently performed better than those that scored low did. </li></ul></ul><ul><ul><li>Here’s why: the 12 conditions have statistically important impact on the productivity, safety, retention, and profitability of an organization. </li></ul></ul>
  21. 22. The Engagement Index <ul><li>When this index was developed in 2000, the idea was to use it to determine just how large a proportion of the employed population were actually uncommitted to their jobs, that is, “emotionally unemployed.” </li></ul><ul><li>We started thinking that organizations are composed of two competing forces: </li></ul><ul><ul><li>positive and engaged, </li></ul></ul><ul><ul><li>negative and disengaged. </li></ul></ul><ul><li>It would follow that the conflict between them would foster immense tension in the workplace. </li></ul>
  22. 23. <ul><li>Use their talents everyday </li></ul><ul><li>Consistent levels of high performance </li></ul><ul><li>Natural innovation and drive for efficiency </li></ul><ul><li>Intentional building of supportive relationships </li></ul><ul><li>Clear about the desired outcome of their goals </li></ul><ul><li>Emotionally committed to what they do </li></ul><ul><li>Challenge purpose to achieve goals </li></ul><ul><li>High energy and enthusiasm </li></ul><ul><li>Never run out of things to do, but create positive things to act on </li></ul><ul><li>Broaden what they do, and build on it </li></ul><ul><li>Commitment to company, work group, and role </li></ul>The Engaged Employee Profile
  23. 24. <ul><li>Meets the basics </li></ul><ul><li>Confusion, or inability to act with confidence </li></ul><ul><li>Low-risk responses and commitment </li></ul><ul><li>No real sense of achievement </li></ul><ul><li>Possible commitment to organization, but not always to role or work group </li></ul><ul><li>Will speak frankly about negative views </li></ul>The Not-Engaged Employee Profile
  24. 25. <ul><li>The numbers don’t lie. </li></ul><ul><ul><li>You must identify your engaged and not-engaged employees because they make huge impacts on your business everyday. </li></ul></ul><ul><ul><li>And unless your employees become engaged to their work and work group – and stay that way – they won’t be able to work to their maximum ability. </li></ul></ul><ul><li>They can make you – or break you. </li></ul><ul><ul><li>If you are managing within a typical business environment, the reality is that the majority of the people working with you aren’t doing a great job. </li></ul></ul>The Disengagement Warning You Must Heed
  25. 26. <ul><li>There is a kind of memory that takes place outside our consciousness. </li></ul><ul><ul><li>This is the memory where we house our emotions, the non-conscious recollection of how we felt at a particular occasion. </li></ul></ul><ul><ul><li>This emotional response your client has is translated into memory and eventually turns into a very strong factor in his or her repurchase. </li></ul></ul>Our Emotional Memory is what Counts
  26. 27. <ul><li>Emotions are the mechanisms that set people’s highest-level goals – including what they repurchase. </li></ul><ul><ul><li>While customers often forget factual information (how much they spent on a service or how much an item costs), they almost always remember their emotions, good and bad – more often the latter than the former – when it comes to deciding whether to buy a product again or keep a service. </li></ul></ul><ul><li>This means that the process of deciding whether or not to stay also depends on the emotions experienced while purchasing or using a product or service. </li></ul><ul><ul><li>So apart from performing its intrinsic functions, a product or a brand carries profound emotional connotations for customers. </li></ul></ul><ul><ul><li>At the beginning, middle, and end of every transaction, emotional engagement is always at its heart. </li></ul></ul>It’s All in Your Heart
  27. 28. <ul><li>The focused kind, which is imposed by a monopoly and lasts only as long as the monopoly does </li></ul><ul><li>The bought kind, which is directed at a captive audience (frequent flier coupons are an example, where an airline offers a choice that fliers might not use) </li></ul><ul><li>The emotional kind, which can go on infinitely. Unless you focus on emotional engagement, you will not be able to persuade customers to return to you </li></ul>Three Kinds of Customer Loyalty
  28. 29. <ul><ul><li>Just as the Q12 outlines the environment for employee engagement, the CE11 – comprised of the L3 and A8 – offers concrete ways for organizations to engage their customers. </li></ul></ul><ul><li>L3 </li></ul><ul><ul><li>Three questions reveal customer’s attitude towards engagement. </li></ul></ul><ul><ul><li>They summarize the various rational and emotional considerations in the customer’s mind. </li></ul></ul><ul><ul><li>These questions have been asked by Gallup for years and collectively represent a general measure of “attitudinal loyalty.” This is called the L3 metric. </li></ul></ul><ul><ul><ul><li>Question 1: “Overall, how satisfied are you with [brand]?” </li></ul></ul></ul><ul><ul><ul><li>Question 2: “How likely are you to continue to choose/repurchase [brand]?” </li></ul></ul></ul><ul><ul><ul><li>Question 3: “How likely are you to recommend [brand] to a friend/associate?” </li></ul></ul></ul>The Signs are there
  29. 30. <ul><li>A8: Four Basic Dimensions of Emotional Engagement </li></ul><ul><ul><li>Confidence: “[Brand] is a name I can always trust.”/“[Brand] always delivers on what they promise.” </li></ul></ul><ul><ul><li>Integrity: “[Brand] always treats me fairly.”/ “If a problem arises, I can always count on [brand] to reach a fair and satisfactory resolution.” </li></ul></ul><ul><ul><li>Pride: “I feel proud to be a [brand] customer.”/ “[Brand] always treats me with respect.” </li></ul></ul><ul><ul><li>Passion: “[Brand] is the perfect company for people like me.”/ “I can’t imagine a world without [brand].” </li></ul></ul>The Signs are there
  30. 31. <ul><li>The emotional indicators of the CE11 add up to this unwavering point: </li></ul><ul><li>You can’t maximize profit unless you create passion. </li></ul><ul><ul><li>That means letting go of all the old, tired, etched-in-stone “rules” you have used in the past to determine customer “loyalty.” </li></ul></ul><ul><li>Customers are emotional beings who respond in their own ways. </li></ul><ul><ul><li>You can’t buy their engagement – but you can make it happen. </li></ul></ul><ul><li>The CE11 is the customer engagement metric to use to measure the “attitudinal loyalty” and emotional connection of your customers. </li></ul><ul><ul><li>It does so by pinpointing the emotional factors that determine whether or not they will return to you. </li></ul></ul>It All Adds Up
  31. 32. <ul><li>No matter where they take place or what kind of brand, product, or organization they involve, every employee-customer interaction involves three simultaneous processes: </li></ul><ul><ul><li>Actions are the functional aspects – that is, all the activities that an employee is supposed to perform on the customer’s behalf. </li></ul></ul><ul><ul><li>Treatment represents the employee’s personal touch, the positive or negative attitudes that set the tone of the customer’s emotional response to what the employee is doing. </li></ul></ul><ul><ul><li>Knowledge refers to information and advice, which customers appreciate as “enhancing the value” of their experience. </li></ul></ul>The Three Links
  32. 33. Do What the Great Managers Do <ul><li>There’s no other way around it, through it, or under it. If you want to be part of a great organization, you have to ensure that your customers keep coming back because they respond to your emotionally engaged employees. </li></ul><ul><li>Achieving this goal means using a direct approach that works. Isn’t it time that you use the same method, too? Do what the great managers do and engage your customers by: </li></ul><ul><ul><li>Identifying and using employee talent themes so that they generate emotional engagement by doing what they do best </li></ul></ul><ul><ul><li>Initiating, sustaining, or restoring their emotional states </li></ul></ul><ul><ul><li>Intensifying emotional states by making sure that employee-customer engagement is consistent </li></ul></ul>
  33. 34. The Disengagement Warning Signs You Must Heed <ul><li>The numbers don’t lie here either. You must identify fully engaged, engaged, not-engaged, and actively disengaged customers, because they make a huge impact on your business every day. </li></ul><ul><li>Unless the majority of your customers become either fully engaged or engaged – and stay that way – your business won’t grow in a sustainable way. Remember: </li></ul><ul><ul><li>The majority of customers are not-engaged. More than half of the customers in the US don’t return to businesses, industries, or organizations on a regular basis because they don’t feel an emotional connection to them </li></ul></ul><ul><ul><li>Not-engaged and actively disengaged customers cost money in time, service, and returns and in lost income potential </li></ul></ul><ul><ul><li>Fully engaged and simply engaged customers are vitally important to any company, because they keep returning. However, if their emotional link is either weakened or broken, they will leave </li></ul></ul>
  34. 35. The Path <ul><li>Here is the Gallup path. Once you begin the journey into the emotion driven economy, the sights along the way are going to change. </li></ul><ul><li>You’re going to view your employees in a whole new way – as talented people with unlimited potential. </li></ul><ul><li>You’re going to see your customers as complex emotional beings who long to forge links with what you can offer them. </li></ul><ul><li>You can do this because you have seen: </li></ul><ul><ul><li>The role emotions play in driving business outcomes </li></ul></ul><ul><ul><li>That all your employees possess innate talents waiting to be engaged </li></ul></ul><ul><ul><li>That engaging these unique talent combinations lead to profits and growth </li></ul></ul><ul><ul><li>The power of Q12 and what it can do for your organization </li></ul></ul><ul><ul><li>What managing to enhance and sustain employee engagement means </li></ul></ul>
  35. 36. The Path <ul><ul><li>The economic implications of the different types of employee engagement </li></ul></ul><ul><ul><li>The power of CE11 and how it can affect your brand, product, or organization </li></ul></ul><ul><ul><li>The four states of customer engagement and how they will impact on your brand, product, or organization. It is the emotional memory that counts </li></ul></ul><ul><ul><li>What managing to enhance and sustain customer engagement means </li></ul></ul><ul><ul><li>The economic implications of the different types of customer engagement </li></ul></ul>
  36. 37. BusinessSummaries.com is a business book Summaries service. Every week, it sends out to subscribers a 9- to 12-page summary of a best-selling business book chosen from among the hundreds of books printed out in the United States. For more information, please go to http://www.bizsum.com. ABOUT BUSINESSSUMMARIES

×