The Gallup Path

Gallup recently put together a nine-step process that they call “the most advanced meta-analytics ever on the subject of behavioral economics.” They analyzed 300,000 business units around the world and this is what the data revealed.

Here’s an easy way to use it. Find what you want to happen. Then look at what leads to it. Increase that and it increases what you want to happen. 

For example, if you want a stock increase, focus on real profit increase. Want real profit increase? Focus on sustainable growth. Want sustainable growth? Focus on engaged customers. Want engaged customers? You need engaged employees. Wish you had engaged employees? Put great managers in charge. Want great managers? Make sure you have the right fit in roles. Want the right fit? Identify strengths (StrengthsFinder helps you identify your strengths).

Here are some notes on the nine steps.

  • Profit increase predicts share increase 80% of the time.
  • Real sales growth (i.e. not acquisitions but actual sales) predicts profit increase about 80% of the time.
  • It’s customer engagement, not satisfaction. Satisfied customers don’t buy more, they’re satisfied. But engaged customers do. They buy more frequently, spend more per transaction and pay a higher margin.
  • Customer engagement comes from high trust in the organization. 
  • The most powerful energy comes from the cross-section of engaged customers and engaged employees. If businesses score above the median in both employee and customer engagement they are 3.4 times in better shape financially than units that scored below the median.
  • Lastly, it all starts with strengths.

(data from It’s the Manager book by Jim Clifton and Jim Harter) 

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