Human Sigma: What, Why and Why Not.

• Author: Batra, Madan Mohan

INTRODUCTION

The focus of this paper is on Human Sigma--a managerial philosophy that strengthens organizational performance by focusing on the human side of an organization. This focus is triggered by three background factors: the employee engagement crisis in the U.S. as well as global work environment, the customer-centricity in the today's competitive era of consumer empowerment, and the further evolution in the quality control mechanisms aimed at the enhancement of the organizational performance.

Employee Engagement Crisis

Today's competitive world faces a challenge of lack of engagement in American as well as global workplace. As many as 70% of U.S. employees are not engaged at work (www.gallup.com). And, a staggering 87% of employees worldwide are not engaged at workplace. This crisis of employee engagement has serious and potentially long-lasting repercussions for the global economy. When employees are not engaged, they are indifferent toward their jobs--or worse, outright hate their work, supervisor, and organization--and they carry potential to destroy a work unit and even a complete business (The Gallup Consulting website). On the contrary, a highly engaged workforce means the difference between a company that thrives and one that struggles. That is, when employees are engaged, they are passionate, creative, and entrepreneurial, and their enthusiasm fuels growth. These employees are emotionally connected to the mission and purpose of their work. (The Gallup Consulting website)

Jim Clifton, Chairman and CEO of Gallup Consulting, in the report titled "State of the American Workplace: Employee Engagement Insights for U.S. Business Leaders," provides numerous employee-engagement-related findings that are based upon a proprietary employee-engagement survey that, since the late nineties, has been administered to more than 25 million employees in 189 different countries and 69 languages. Some of the main findings from the report are stated below.

* Employee-engagement makes a difference to the bottom line. Top 25 percent of the engaged workers have significantly higher productivity, profitability, and customer ratings, less turnover and absenteeism, and fewer safety incidents than those in the bottom 25 percent.

* Managers and leaders can play a critical role in raising the employee engagement level. The managers who focus on their employees' strengths can practically eliminate active employee-disengagement, and multiply the number of engaged workers.

* Different types of employees need different engagement strategies. The generations at the beginning, and approaching the end, of their careers tend to be more engaged than those in the middle of their careers. Women have slightly higher engagement than men.

* Employee-engagement has a greater impact on performance than corporate policies and perks. Although certain policies such as hours worked, flextime, and vacation time do relate to employee well-being, engagement levels in the work environment eclipse corporate policies.

* On the negative side, most of the employees are not typically prepared to engage customers. Only 41 percent of the employees felt that they know what their company stands for and what makes its brand different from its competitors' brands.

Accordingly, the today's organizations need to raise the number of engaged employees, and reduce the number of disengaged and actively-disengaged employees in their work environment, so as to strengthen their organizational performance. The Human Sigma as a managerial strategy facilitates employee engagement that, in turn, raises the financial efficiency of an organization (Fleming, Coffman, & Harter, 2005).

Customer-Centricity

In the today's era of consumer empowerment, consumers "own" media. They have an easy 24-7 access to free social media through smart phones in their pockets; and, they have connectivity to rest of the world through digital applications such as Facebook, Twitter, and LinkedIn. Through these media outlets, they may easily make or break an organization's or a brand's reputation and image. Marketers cannot ignore their customers' sudden and unanticipated reaction and feedback; the marketers need to indulge in their customers, that is, be customer-centric. To be competitive, they need to offer excellent customer experiences.

In the developed markets, a typical managerial marketing-orientation revolves around numerous customer-centric dimensions that include customer attraction, customer retention, customer satisfaction, customer delight, customer loyalty, customer life time value, and customer equity. Large corporations in the United States are usually customer-focused, and aspire these customer-centric dimensions in their organizational outcomes and performance. An exceptional customer service through highly engaged employees helps in strengthening these numerous customer-centric dimensions. In this paper, we focus on Human Sigma--a comprehensive mechanism of creating and providing an exceptional customer service experience. The mechanism is especially useful for service enterprises that are interested in providing an exceptional service to their customers--so as to strengthen their competitiveness in the global market.

Quality Control of Human Systems

Value creation in the form of high quality goods is the raison d'etre of manufacturing companies. Manufacturing companies are aware that the more their products wind up in the "defective bin," the less effective and profitable their operations are. About three decades ago, Motorola, Inc. introduced Six Sigma as a new process-improvement methodology aimed at reducing variability in manufacturing processes and systems. Six Sigma has been one of the most successful management movements, and has had the stronger staying power that the other competing quality control initiatives such as Statistical Process Control, Total Quality Management, ISO 9000, and Lean Manufacturing have lacked (Fleming & Asplund, 2007). Six Sigma was developed within a manufacturing context with emphasis on manufacturing products with "zero defects." However, unlike manufacturing companies, sales and service organizations (retail, banking, lodging, healthcare, hospitality, commercial transportation, business-to-business, etc.) revolve around the production and delivery of services through interaction with customers. Note here that the six sigma approach is weak in its application to the "soft" dimensions of organizational quality and performance--those dynamic human systems that encompass employee productivity and customer service via employee-customer interactions and encounters. In a manufacturing organization, the value is created on a factory floor, whereas in a sales and service organization, the customer value is produced through an employee-customer encounter which could potentially range from being flawless to severely defective (Fleming & Asplund, 2007). The Human Sigma approach discussed in this paper aims at ensuring a perfect employee-customer encounter--for every customer every time.

Objective and Significance

Given the above context and background, this paper discusses the nature, significance and limitations of Human Sigma as a managerial strategy and an operational tool. Its significance is to assist management in enhancing customer value and experience by way of Human Sigma application thereby strengthening business growth and financial vitality.

HUMAN SIGMA AS A MANAGERIAL PHILOSOPHY

John H. Fleming and Jim Asplund, along with Gallup Consulting, Incorporated, are the pioneers of Human Sigma which, lately, has also been analyzed and re-formulated by various academicians (Sutton, 2014). As a matter of fact, doctoral dissertations have been written on Human Sigma, for example, see Sutton (2014, July) and Zweifel (2010). Human Sigma is a strategic approach as well as a managerial philosophy. On a strategic level, Human Sigma is an enterprise-level initiative, with senior-level management involvement and support, intended to drive business performance by optimizing the human systems that are vital to an organization's success. As a managerial philosophy, "Human Sigma recognizes that by optimizing an organization's human systems, it can achieve a sustainable competitive advantage that is not easily copied in a marketplace where the traditional marketing weaponry--the "four Ps" (Product, Price, Place, Promotion)--is rapidly becoming commoditized" (Fleming & Asplund, 2007).

Human Sigma is well-understood when paralleled with the six-sigma standard which is largely applied to the manufacturing sector to raise the product quality excellence. The six sigma standard of a maximum of 3.4 defective units allowed per one million manufactured units is a benchmark raised from the erstwhile three-sigma standard...