Book review- Human Sigma by John H. Fleming, PhD. & Jim Asplund

This book came recommended, thanks. As the title suggests it looks at business through a human lens. It clearly demands an end to “Terminator Management.”

By Terminator Management, the authors are referring to the concept that businesses are made up of a collection of people forming thoughts AND performing tasks. Terminators look at humans as a liability as well as an inherently inefficient method for conducting business. Humans think and feel too much. They also can make errors!

Google may be a perfect example of TM. Everything in their line of services is devoid of human interaction. If you need an answer to a question, you are directed to a FAQ or to send an email. Live people manning a call center? No way. While this fact is definitely core to Google’s business model, it is a very sterile way to do business. I use their services and all is fine when things are working, but I am not convinced that my voice will be heard if things are not working.

The basic concept here is that Employee and Customer relationships are directly linked. If you would like to change something in the mix, you need to measure both of these areas together, not separately. They measure this with the HumanSigma Metric. They tie this metric to financial performance so as not to bring a meaningless metric into the enterprise.

“When you stifle human interaction by attempting to legislate the steps to service, you sacrifice real quality,” This comes about when employees are not allowed to think outside the box or color outside of the lines to keep their customers happy.  Scripting how your employees (literally or figuratively) will not endear your company to influentials.

For sure, Zappos does not follow a terminator management model.

“Not everything that can be counted, counts.” This quote is used in the book and is credited to Einstein. (This quote is very relevant to online marketing, but that is a discussion for another day.) In sales management, salespeople are sometimes strongly encouraged, or mandated to make a certain number of calls per day. This is usually recorded in SalesForce or a similar CRM system. This type of “management” takes nothing in regarding the quality of calls made by the sales people, it is just a metric that can easily be reported on, but does nothing to endear customers or employees to management or the company overall. “Manage outcomes, not behaviors,” say the authors to this. I say to a former a former boss-“It’s not a numbers game, Sorry.”

That is the overall concept of this book. Employees are feeling people. When they are allowed to be more human, instead of occupying a cell on a spreadsheet, better things will come for the company overall. The employee will feel more empowered, thus more engaged, and these sorts of activities are demonstrated to provide better financial results for the company.  The key is to measure both the financial as well as the human element of the company together instead of non-related silos of information.

Due to the macro economic environment and resultant lean operating conditions, it appears to me that companies that adopt the HumanSigma mindset will both survive and thrive. I believe that the old ways of doing things are gone forever. I recommend that you review the concepts in this book and adopt them for your own.

This is my daughter. Look at her. There’s this aura of infinite possibilities – she’s ready to take on the world. Nothing will stand in her way to explore this world that’s hers. We all used to be like that. We all had this fire in our eyes. Each morning we couldn’t wait to get out of bed, ready to make this world our world. We were curious. Eager. Had so many questions. Tried things out. Fell down. Tried them again.

And then life happened to us. Or better, institutions stood in our way. Pre-school. Kindergarden. Norms. Criticism. Homework. Schedules. School. Cruel teachers. Critical teachers. Grades. Norms. The system integrated us. We integrated the system into our lives. Into our thinking. And being. We graduated. When we were lucky, we traveled for a while. Found that joyful life experience again. But now it was time to join the workforce. To fit in. To accept mediocrity. Suddenly, it’s hard to get out of bed in the morning. Weekends and vacations are the only remaining highlights. We are slowly killing off everything that made us happy and curious in the first place.

Hold on, we just got a second chance.

The Great Recession is the biggest opportunity we will encounter in our lives. The Great Recession equals major hardship for many people but it also marks the end of the corporate era. If you’re corporate drone, your job will be eliminated very soon. If you try to fit in to make it in this world, you will struggle for the rest of your life. In order to succeed, you have to become an artist.

That’s the premise of Seth Godin’s newest book “Linchpin – Are you indispensable?” We have to become more human, creative and generous to be seen as unique and irreplaceable. And, most importantly, we have to ship. Meaning, we have to produce. Not spending hours on email trafficking, Twitter scanning, blog commenting. No, shipping. Producing. Doing. We can either give in to the lizard brain, the little part of your brain that is concerned with survival and is the reason for your procrastination and all your irrational fears. Or we can create our own destiny. Our own reality. And, at the same time, change the world.

Seth Godin’s Linchpin might be the most important book you’ve read in a long time. Hopefully, it will change you and your thinking. We’ve been working with major Fortune 100 corporations for years, even decades. We understand how tough it is to implement cultural change. But, it’s necessary. Actually, it’s imperative. Would you rather help your company change or see it vanish?

Seth Godin’s Linchpin and Hugh McLeod’s Evil plans (he illustrated Linchpin because he’s one) will give you the motivation and desire to change the world. We started our company with the goal to help transform businesses and change the way we work and live. Seth Godin distilled our thoughts in a neat and exciting package. Now it’s your turn to take the ball and change the world. We hope you’re ready.

The once admired Toyota brand is in deep trouble. Not one day passes without another recall and frightening insights into the culture of the rapidly expanding brand. If any company was ever the banner child for business management strategies and lean manufacturing, it was Toyota. Kaizen (Japanese for improvement) was the buzzword for Toyota’s business system, continually improving all functions of their business, from manufacturing to management and from the CEO to the assembly line workers. Key elements of kaizen are quality, effort, involvement of all employees, willingness to change, and communication. Most see kaizen from an operational point of view. That’s where the disconnect is. At its core, kaizen is about cultural change and unless this change is implemented none of the tools and technologies will work. Kaizen is about focusing less on short-term goals and shifting the cultural focus to long-term goals and stability. And that’s where Toyota lost its way.

They were so focused on grabbing the title of world’s largest automaker that they completely forget about their principles that made them such a respected brand: Focusing on gas-sucking vehicles because Detroit owned that market. A secretive and bureaucratic culture, centrally controlled after Jim Press left for Chrysler. Resting on their laurels and believing in their own corporate speak, not connecting with their stakeholders, purely focusing on expansion and shareholder value.

It’s just maddening to read how for years Toyota tried to skirt the issues, not dealing with the real problem, just trying to avoid bad PR. Compare this to Johnson & Johnson’s Tylenol recall: the first death occurred September 29, 1982. 6 days later Johnson & Johnson pulled 31 million bottles, with a retail value of $100 million. They also advertised that nobody should consume any products containing acetaminophen. Their market share collapsed from 35% to 8%, just to rebound within a year.

Why was Johnson & Johnson able to react so promptly and why is Toyota acting like Bill Clinton, debating the definition of ‘is’?

A look at Johnson & Johnson’s credo is very revealing:

“We believe our first responsibility is to the doctors, nurses and patients, to mothers and fathers and all others who use our products and services. In meeting their needs everything we do must be of high quality. We must constantly strive to reduce our costs in order to maintain reasonable prices. Customers’ orders must be serviced promptly and accurately. Our suppliers and distributors must have an opportunity to make a fair profit. We are responsible to our employees, the men and women who work with us throughout the world. Everyone must be considered as an individual. We must respect their dignity and recognize their merit. They must have a sense of security in their jobs. Compensation must be fair and adequate, and working conditions clean, orderly and safe. We must be mindful of ways to help our employees fulfill their family responsibilities. Employees must feel free to make suggestions and complaints. There must be equal opportunity for employment, development and advancement for those qualified. We must provide competent management, and their actions must be just and ethical. We are responsible to the communities in which we live and work and to the world community as well. We must be good citizens–support good works and charities and bear our fair share of taxes. We must encourage civic improvements and better health and education. We must maintain in good order the property we are privileged to use, protecting the environment and natural resources. Our final responsibility is to our stockholders. Business must make a sound profit. We must experiment with new ideas. Research must be carried on, innovative programs developed and mistakes paid for. New equipment must be purchased, new facilities provided and new products launched. Reserves must be created to provide for adverse times. When we operate according to these principles, the stockholders should realize a fair return.”

J&J’s primary goal is to satisfy their customers. Not the shareholders. The shareholders come last. Shareholder value becomes an organic result of good customer experiences and valuable relationships with stakeholders. Toyota went exactly the opposite way: Cutting prices for all their suppliers, not reacting to dropping customer satisfaction scores and disregarding customer complaints that lead to the devastating recalls.

Sure, there is the Toyota Way. While J&J lived its credo throughout tough times, Toyota got sidetracked. Joseph Jaffe gives good advice to the marketing and PR department at Toyota. But that’s the second step. The first step for Toyota is look deep inside and change their culture. It’s getting late. Kaizen made you the admired brand you once were. Kaizen as a cultural change system can do it again.

Image courtesy of 24 Media

Since corporations were formed, businesses always relied on analytical decision-making. Large corporations were able to create their own ecosystem, shaping their world at will. In this world, being smart was enough. But these walled garden are gone. And the world outside doesn’t follow the rules the corporations used to force on us. This created a severe alienation between people and companies/institution. And leaves many corporations craving for the old world order and fearing the future.

There’s nothing to fear. Actually, there’s a lot to look forward to. To an era where emotional skills will be paired with analytical skills. New MBAs already learn to focus more on “self-awareness and the capacity for introspection and empathy.” I would argue, empathy will be the key differentiator for successful institutions. And lack thereof their downfall.

Empathy will provide you with insightful knowledge of the world outside of your walled garden. Spock never was able to get the full ‘human experience’, just like many managers who are trapped by their own analytical skills. Empathy allows you to experience the world and analyze data outside of your own life experience. It helps you to develop innovative strategic and tactical opportunities. That’s what real Enterprise 2.0 is about: focusing on the strengths of the right brain, understanding patterns, argue holistically and interpret emotions. When we have all the analytical technologies and skills as a foundation and layer right-brain capabilities on top of it to deliver real value. Suddenly things make sense. Empathy helps us to transform enterprises by our new-found ability to see the big picture and take collaboration to a new level.

Empathy and collaboration are fellow partners. Both are closely linked because they require to focus less on self and more on the outside. People who have the ability to see world through someone else’s eyes are much more likely to share information with others. They understand how their work is linked to that of other people, understand the necessity to overcome of silos. Too many E2.0 experts base their opinion of collaboration on technologies and the obvious benefits for organizations.

Real collaboration is not reactive. Real collaboration is pro-active. Focusing on the needs of others before they can express them.

Not “I just got this information request, I should answer.” Instead, “I should share this information because it might benefit XY and her project.”

Not “A customer complains, I need to resolve this situation.” Instead, “My customer needs are changing and I have to change my products/services to accommodate them.”

We have to understand collaboration becomes more effective when it’s based on human interaction and relationships. When we have a comfort level with another person, see them as a human, not a resource, collaboration is an organic outcome. Technologies help us to organize and calibrate the collaboration efforts. Empathy helps us build trusting relationships and deliver ROI in the value chain. Empathy is critical for E2.0 organization to harvest the benefits of collaboration and co-creation.