Welcome to the Emotional Economy : Part 2

Follow this Path: How the World's Greatest Organizations Drive Growth by Unleashing Human Potential
by Curt Coffman, Gabriel Gonzalez-Molina, Ph.D.

(Page 2 of 4)

This skewed view of human nature is as backward as the narrow view of the universe was in the 1600s, for a fundamental reason: It doesn't begin to consider how human nature can impact positively on business outcomes.

A growing number of executives intuitively know that their organizations are running at a fraction of their human potential. (They're right. It's less than one-third. This startling number, and many others like it, will be covered in detail later in this book.) They are aware of constant fluctuations in the job performance of individuals and teams. The behavior of customers, they realize, is not something that can be relied on. But just as Galileo wondered why the sky moved but didn't understand what drove it, these executives don't have at their disposal a way of describing, much less linking, their observations and finding a solution to their problem.

That's because most businesses regard the subjects of the "impact of people" and "human potential" as interesting issues in theory that are irrelevant to their organizations' financial outcomes in reality. The general assumptions are that these issues don't exert an important influence, so why bother understanding them?

The same head-in-the-sand viewpoint applies to customers. Organizations are well aware that enormous growth potential lies in existing customers rather than from new ones. In his popular book The Loyalty Effect, Frederick F. Reichheld notes that the result of turning 5 percent of ordinary customers into return ones leads to an average increase in profit per customer of between 25 and 100 percent. But while most organizations maximize their ability to attract new customers, they minimize their understanding of what makes these essential people come back over and over again.

What many organizations don't see - and what many don't want to understand - is that employee performance and its subsequent impact on customer engagement revolve around a motivating force that is determined in the brain and defines the specific talents and the emotional mechanisms everyone brings to their work.

But at the same time we are finally seeing a growing awareness of just how influential human nature is in determining business outcomes. Human nature, the "soft side" of an organization, is attracting interest, particularly in the financial community. Investment bankers are already studying "human capital," because they are realizing how important an issue it is for them. Recently, Piper Jaffray, the equity investment arm of U.S. Bancorp, issued a report entitled Human Capital: Optimizing Talent in the Knowledge Economy, which stressed the growing value of talented employees.

Leading accounting firms are also looking at human-related issues as being part of an organization's assets, not its liabilities. Customer reliability and brand equity are areas of special interest in this regard.

Across all kinds of organizations, references to "human capital" are growing. What does this term mean? It varies. Definitions include "the knowledge worker," "the talent pool," "the competent workforce," "the educated employee," and the more encompassing "enthusiastic workforce."

By whatever name, these references reflect a new alertness to the profound impact of human nature in the workplace.

Multinational organizations, such as the European Commission, have been studying the economic implications of human capital, and not just in terms of percentages of GDP (gross domestic product) invested in education (as Nobel laureate economist Gary Becker has advocated). They are examining the harder-to-measure implications of talent and employee involvement in the workplace. The common goal is this: to find the code of human nature's role in shaping a company's business outcomes.

There is a way to do this. Great organizations are keenly aware of it. They tap into the power of human nature every day. It is what makes them great.

The Unique Pathway

"Roads with the most traffic get widened. The ones that are rarely used fall into disrepair."

What do roads have to do with business, much less human nature? Everything.

Dr. Harry Chugani, professor of pediatrics, neurology, and radiology at Wayne State University School of Medicine, made the statement above in reference to synaptic connections in the brain, the pathways that have led to your individual talents from the day you were born.

That day every neuron in your brain sent out many thousands of signals. The purpose of this was to establish connections with other neurons in order to communicate with them. By the time you were three years old, each of your brain's one hundred billion neurons formed up to fifteen thousand of these connections.

But these created a problem. Now your young brain was being inundated with information, and not all of it could be understood. In order to make sense of this excess of data, over the next ten years or so your brain refined and refocused its network of connections. Stronger synapses grew.

Weaker ones withered away. By the time you were fifteen these choices, determined by genetics, brain physiology, and environment, shaped high-speed communication among neurons. Rapid access to memory and information, fast learning and knowledge acquisition, emotional response mechanisms, and a particular framework for the interpretation of experience: All these systems were firmly established. The solid foundation of these building blocks formed your unique sense, the way you, as an individual, react to the world.

Copyright © 2002 by The Gallup Organization

About the Author

Curt Coffman is the coauthor of the New York Times business bestseller First, Break All the Rules and The Gallup Organization's Global Practice Leader for Q12 Management Consulting.

Gabriel Gonzalez-Molina is Global Practice Leader -HumanSigma- at The Gallup Organization and co-author of Follow This Path: How the World's Greatest Organizations Drive Growth by Unleashing Human Potential. His Gallup discoveries help corporations significantly increase their revenue and profit growth rates by managing their emotional economies. This includes measuring, describing, understanding, and developing emotional engagement among employees and customers through HumanSigma™, Gallup's management breakthrough system for driving revenue and earnings growth in highly competitive environments.