Preaching the Human Sigma Gospel

(page 2 of 2)

If you buy a tractor or a furnace, you know what you're going to pay for it, how it'll depreciate, where it goes in the system, what the maintenance costs are likely to be, and roughly when it will quit. If it melts steel or pulls a load at a given rate today, it'll do the same or very close to that tomorrow.

People, of course, meet none of those conditions. They're unpredictable, both in ways that you might appreciate and ways that you don't appreciate. So because people— employees and customers—are much more unpredictable than machines, they can't be managed or directed in prescribed ways. That makes for a lot of work.

Once you have learned to measure this employee-customer encounter, how can a company work to improve it?

Sustainable improvement in the employee-customer encounter requires disciplined local action coupled with a company-wide commitment to changing how employees are recruited, positioned in roles, rewarded, recognized, and, most important, how they are managed.

In your book, you said the employee/customer encounter is the new factory floor. How did you mean that?

If you contrast manufacturing environments with service economy environments, you need a new definition of value creation for a service economy. The definition that we landed on was that value is created when an employee and a customer come together and they interact. And that's different from manufacturing, where you create value by making a product that is ready to be sold. Creating value in a manufacturing context is fairly straightforward. If you have a lot of broken products, you have problems. If you have no broken products, no poor-quality products, then your business can flourish. In a service business, so much more is focused on the interaction that your employees have with your customers that you need a new set of tools to evaluate how well you're doing in that space.

Does Human Sigma apply to noncustomer-facing employees?

Certainly. Think of the guy on the loading dock who may not ever talk to the customer, but if he drops your TV before he loads it on the truck, or if he takes an extra three days to get it to the store, all those things have implications for customers whether that employee ever talks to them.

Can our readers reach you?

Yes, you can contact us at authors_humansigma@gallup.com

Marshall Goldsmith, who writes Marshall and Friends every week for BusinessWeek.com, can be reached at Marshall@MarshallGoldsmith.com. He provides his articles and videos online at MarshallGoldsmithLibrary.com.