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David
Lee
Consultant
Speaker
Author
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AR
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The
Emotional Side of Intellectual Capital |
| By
David Lee |
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| Originally
published in Training Scene |
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It's hard to pick up a training, HR, or management
journal without seeing an article about Intellectual Capital and what
a critical source of competitive advantage it is, or can be. The field
of Knowledge Management - technology to harvest and leverage this vital
asset, is growing by leaps and bounds. Yet, we see very little written
about a core component of Intellectual Capital - human emotions.
Contrary to the popular view that emotions are
the "opposite" of intellect, a wealth of research shows they
are an integral part of intellect. In fact, neurobiologists state that
a central purpose of emotions is to influence attention, perception,
and cognition. We know intuitively that emotions influence the quality,
focus, and style of our thought process. If we feel anxious, angry, or
hopeless; we think far differently than when we feel confident, benevolent,
and hopeful.
What does this mean to the organization hoping
to compete based on its Intellectual Capital? It means management cannot
afford to ignore how their workforce's emotional state affects this critical
asset.
Research shows that emotional distress seriously
compromises intellectual functioning in a variety of ways. As people
become more stressed; their thinking becomes increasingly more simplistic,
unimaginative, rigid, and even primitive. They literally become "dumbed
down." Research from the psychobiology and trauma fields also indicates
that both traumatic and chronic stress can cause biochemical, psychological,
and neurological changes which hinder a person's ability to notice and
understand other's feelings, intentions, and nonverbal communication.
This "numbed out" state results in social obtuseness, a lack
of empathy, and interpersonal insensitivity; or in the popular terminology
of today - low Emotional Intelligence.
In short, the natural psychological, neurological,
and physiological responses which protect us from emotional pain also
make us less intelligent - both cognitively and emotionally. Thus, in
an emotionally painful workplace climate, an organization's valuable
Intellectual Assets literally depreciate. Such an environment also causes
the depreciation of Customer Capital - the strong, loyal relationships
created by consistent, positive interactions with the organization (i.e.
its people). Customer Capital depends upon the interpersonal component
of Intellectual Capital - the knowledge and know how required to create
a positively memorable, totally satisfying, customer service experience.
With studies showing that 68% of customer defections
are caused by front line employee's "attitude of indifference," the
Employee Emotion/Customer Capital connection is obvious. Landmark research
published in the Harvard Business Review by Richard Reichheld and Earl
Sasser also shows the huge economic consequences of creating a totally
satisfying customer service experience. 15% to 40% of a company's customers
who are "only" satisfied - not totally satisfied, defect to
a competitor each year. Totally satisfied customers are 6 times more
likely to repurchase than satisfied customers. Their research also revealed
that reducing customer defections by 5% can translate into a 30% to 85%
increase in profits.
Thus, "delighting the customer" has major financial implications.
Creating such an experience requires addressing the emotional state of
the front line workers and those internal departments who serve them.
Creating such an experience requires inspired, proud, upbeat employees.
If employees are emotionally depleted, depressed, or resentful; service
will obviously be anything but delightful.
The bottom line is clear: If we want to compete
in the 21st Century marketplace, we can't do it with "dumbed down" and "numbed
out" employees. Creating a workforce that is "fast, flexible,
focused, and friendly" (to use Rosabeth Moss Kantor's term) - and
smart; requires a workplace which elicits and sustains positive emotional
states. Those organizations which know how to do this will flourish in
this new, more demanding marketplace. |
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About the Author: David Lee is an internationally recognized authority on organizational and managerial practices that optimize employee performance. He is the author of Managing Employee Stress and Safety, as well as dozens of articles on employee and organizational performance that have been published in trade journals and books in North America, Asia, Europe, and Australia. For information on his programs and service, click here.
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