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Fl Hs 111407 White Fl Hs 111407 White Presentation Transcript

  •  
  • Manage Your Human Sigma John H. Fleming, Ph.D., Principal Chief Scientist, Customer Engagement & HumanSigma
  • Publications
    • Portions of this presentation were published in the July/August, 2005 special issue of Harvard Business Review dedicated to the High-Performance Organization under the title “Manage Your Human Sigma.”
    Copyright © 2007 Gallup. Inc. All rights reserved.
  • What Is HumanSigma ® ?
    • An holistic approach to “optimizing” the vital signs of your company’s human systems:
      • Customer Engagement (Heart Rate)
      • Employee Engagement (Respiration)
      • Financial Performance (Blood Pressure)
    • 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.
    Copyright © 2007 Gallup. Inc. All rights reserved.
  • HumanSigma ® Principles
    • Like vital signs, the employee-customer encounter must be conceptualized and managed holistically.
    • The employee-customer encounter is fundamentally emotional.
    • The employee-customer encounter must be measured and managed locally.
    • 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.
    • Improvement in local HumanSigma performance requires attention to a combination of “transactional” and “transformational” intervention activities.
    Copyright © 2007 Gallup. Inc. All rights reserved.
  • Employee Engagement Copyright © 2007 Gallup. Inc. All rights reserved.
  • U.S. Engagement Scores 2006 30% 55% Engaged Not Engaged Actively Disengaged 15% Copyright © 2007 Gallup. Inc. All rights reserved.
  • Employee Engagement Hierarchy Copyright © 2007 Gallup. Inc. All rights reserved. Financial Outcomes Growth Teamwork Management Support Basic Needs How can we grow? Do I belong? What do I give? What do I get? 0% 100%
  • Employee Engagement and Performance Note: Differences are between top and bottom quartile workgroups. Absenteeism statistic is the difference between engaged and actively disengaged employees. Copyright © 2007 Gallup. Inc. All rights reserved.
  • Employee Engagement and EPS Copyright © 2007 Gallup. Inc. All rights reserved. Change in EPS (%) 2.6x Higher Growth Rate for High Engagement Companies Note: Based on analysis of data from 89 publicly traded companies. Engagement data collected from 2002 to 2004. Comparables averaged 7.3 competitors per company.
  • Customer Engagement Copyright © 2007 Gallup. Inc. All rights reserved.
  • Customer Engagement Hierarchy Can’t imagine a world without Perfect company for people like me Treats me with respect Feel proud to be a customer Fair resolution of any problems Always treats me fairly Always delivers on promise Name I can always trust A 8 ™ Your company is irreplaceable to me. I feel passionate about you. Your company is prestigious. It is part of who I am. When we have a problem, you always treat me fairly. I can safely assume that you will always keep your promises. Copyright © 2000 Gallup. Inc. All rights reserved. Passion Pride Integrity Confidence
  • Customer Engagement at Retailer A (Retail) Note: Mean values used. Copyright © 2007 Gallup. Inc. All rights reserved. Bottom Half CE11 Top Half CE11 Annual Sales $14,214 $17,053 (+20%) YOY Sales Growth 0.7% 1.2% (+71%) Avg Weekly Sales $273 $329 (+21%)
  • Customer Engagement Groups | Four Customers Copyright © 1994-2000 Gallup, Inc. All rights reserved. Engaged Beginnings of emotional attachment but not strong Fully Engaged Strongly attached and loyal. Your most valuable customers Not Engaged Emotionally and attitudinally neutral Actively Disengaged Active emotional detachment and antagonism
  • Customer Engagement Drives Financial Performance Per-Customer Contribution Indexed Performance (Average = 100) Copyright © 2007 Gallup. Inc. All rights reserved. 100
  • Local Performance Variation Is the Scourge of High Performance Range of Performance Copyright © 2007 Gallup, Inc. All rights reserved. Average Performance
  • HumanSigma ® Copyright © 2007 Gallup. Inc. All rights reserved.
  • HumanSigma ® Quadrants Q III Q I “ Optimized” Q IV Q II Copyright © 2007 Gallup, Inc. All rights reserved.
  • HumanSigma ® Quadrants 1.7 3.4 1.7 “ Optimized” 1.0 Copyright © 2007 Gallup, Inc. All rights reserved. 70% boost 240% boost 70% boost
    • Optimized stores (HS4-HS6) Generate $16-$22 more profit PER SQUARE FOOT than non-optimized stores
    • This accounts for a difference in earnings of $26.3-$33.6 million per year
    HumanSigma ® | A Retail Example Copyright © 2007 Gallup, Inc. All rights reserved.
    • Improvement from managing HumanSigma:
      • Baseline = 13 Optimized Stores
      • 1 Year Later = 47 Optimized Stores
    HumanSigma ® | A Retail Example Copyright © 2007 Gallup, Inc. All rights reserved.
  • HumanSigma ® Performance Bands Copyright © 2007 Gallup, Inc. All rights reserved.
  • Case Study | HumanSigma ® at Retailer O Copyright © 2007 Gallup. Inc. All rights reserved.
  • HumanSigma ® at Retailer O 7 stores 14 stores 87 stores 93 stores 6 stores N=207 stores in Germany only Note: Line is regression line for CE 11 and Q 12 Copyright © 2007 Gallup, Inc. All rights reserved.
  • HumanSigma ® at Retailer O € 3,880,532 € 3,859,480 (-1%) € 3,537,897 (-10%) € 3,174,938 (-22%) N=207 stores in Germany only Note: Line is regression line for CE 11 and Q 12 € 2,953,309 (-31%) Annual Profit Controlling for market size, DIY spending, and store size. Copyright © 2007 Gallup, Inc. All rights reserved.
  • Case Study | HumanSigma ® at Retailer B Copyright © 2007 Gallup. Inc. All rights reserved.
  • HumanSigma ® at Retailer B | Year 1 N=1,421 stores Copyright © 2007 Gallup, Inc. All rights reserved.
  • Transactional Interventions Performance Measurement & Accountability Education & Dialogue Learning, Adjustment, & Alignment Copyright © 2007 Gallup. Inc. All rights reserved.
  • … these must be all managed. To reliably influence these... Transformational Interventions Transformational Interventions
  • HumanSigma ® Change -53% +175% Copyright © 2007 Gallup. Inc. All rights reserved.
  • HumanSigma ® Change at Retailer B
    • Estimated annual value of HumanSigma improvement is:
      • $203.4M in sales
      • $90.2M in margin
    -0.7% -0.7% +11.4% +12.0% Copyright © 2007 Gallup. Inc. All rights reserved.
  • Case Study | HumanSigma ® at Retailer Z Copyright © 2007 Gallup. Inc. All rights reserved.
  • HumanSigma ® at Retailer Z N=257 branch offices Copyright © 2007 Gallup, Inc. All rights reserved.
  • HumanSigma ® at Retailer Z N=257 branches Average Annual Sales Growth 2003-2005 Average Annual Income Growth 2003-2005 19.0% 17.6% 12.2% 74.5% 50.6% 30.0% Copyright © 2007 Gallup, Inc. All rights reserved.
  • HumanSigma ® Change at Retailer Z Copyright © 2007 Gallup. Inc. All rights reserved. -66% +37%
  • HumanSigma ® Change at Retailer Z Copyright © 2007 Gallup. Inc. All rights reserved.
    • Estimated annual value of HumanSigma ® improvement is:
      • $182.0M in sales
      • 24.5M in net income
  • Extreme HumanSigma ® at Bank S Copyright © 2007 Gallup. Inc. All rights reserved.
  • HumanSigma ® at Bank S | 2004 0.0% of branches 2.8% of branches 4.6% of branches 16.8% of branches 52.2% of branches 23.6% of branches N=458 branches Note: Line is regression line for CE 11 and Q 12 Copyright © 2007 Gallup, Inc. All rights reserved.
  • HumanSigma ® at Bank S | 2005 2.7% of branches 22.8% of branches 14.2% of branches 29.6% of branches 27.4% of branches 3.3% of branches N=548 branches Note: Line is regression line for CE 11 and Q 12 Copyright © 2007 Gallup, Inc. All rights reserved.
  • HumanSigma ® at Bank S | 2006 33.6% of branches 43.1% of branches 10.9% of branches 9.2% of branches 2.6% of branches 0.6% of branches N=663 branches Note: Line is regression line for CE 11 and Q 12 Copyright © 2007 Gallup, Inc. All rights reserved.
  • HumanSigma ® at Bank S | 2007 57.9% of branches 32.8% of branches 2.9% of branches 4.0% of branches 2.1% of branches 0.3% of branches N=748 branches Note: Line is regression line for CE 11 and Q 12 Copyright © 2007 Gallup, Inc. All rights reserved.
  • HumanSigma ® Summary
    • Like vital signs, the employee-customer encounter must be conceptualized and managed holistically.
    • The employee-customer encounter is fundamentally emotional.
    • The employee-customer encounter must be measured and managed locally.
    • 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.
    • Improvement in local HumanSigma performance requires attention to a combination of “transactional” and “transformational” intervention activities.
    Copyright © 2007 Gallup. Inc. All rights reserved.
  • Copyright Standards
    • This document contains proprietary research, copyrighted materials, and literary property of The Gallup Organization. It is for the guidance of your company's executives only and is not to be copied, quoted, published, or divulged to others outside of your organization. Gallup ® , HumanSigma ® , Q 12 ® , CE 11 ® , StrengthsFinder ® and each of the 34 StrengthsFinder talent themes, are trademarks of The Gallup Organization, Princeton, NJ. All other trademarks are the property of their respective owners.
    • This document is of great value to both your organization and The Gallup Organization. Accordingly, the ideas, concepts, and recommendations related within this document are protected by international and domestic laws and penalties guaranteeing patent, copyright, trademark, and trade secret protection.
    • No changes may be made to this document without the express written permission of The Gallup Organization.
    Copyright © 2007 Gallup. Inc. All rights reserved.