Comments on: Careful what you Measure http://www.dailykaizen.org/archives/140 A blog about improvement in health care Fri, 21 Nov 2008 02:57:39 +0000 http://wordpress.org/?v=2.6.3 By: Lee Fried http://www.dailykaizen.org/archives/140#comment-74 Lee Fried Mon, 04 Sep 2006 23:11:01 +0000 http://www.dailykaizen.org/archives/140#comment-74 Dear Karl, I appreciate the long comment and really like the the three points. I will use them with my leadership team tomorrow. I think you are absolutely correct, I would take many small improvements any day over the "silver bullet" that often organizations are looking for. The "small stuff" is not so small to those that are working in the processes and have to deal with the same problems day in and day out. By empowering and resourcing teams to implement their ideas and fix the problems an organization gets the best return on investment that it could ever ask for: an engaged and high performing culture. Just don't ask me to measure it! :) Thanks for your input, Lee Dear Karl,

I appreciate the long comment and really like the the three points. I will use them with my leadership team tomorrow.

I think you are absolutely correct, I would take many small improvements any day over the “silver bullet” that often organizations are looking for. The “small stuff” is not so small to those that are working in the processes and have to deal with the same problems day in and day out. By empowering and resourcing teams to implement their ideas and fix the problems an organization gets the best return on investment that it could ever ask for: an engaged and high performing culture. Just don’t ask me to measure it! :)

Thanks for your input,

Lee

]]> By: Karl McCracken http://www.dailykaizen.org/archives/140#comment-73 Karl McCracken Mon, 04 Sep 2006 20:44:14 +0000 http://www.dailykaizen.org/archives/140#comment-73 Hi Lee - I tend to agree - trying to work out ROI on this sort of stuff is generally rather pointless. If Lean is really working, then in addition to the Halleluja Chorus Kaizens, it'll be generating hundreds of tiny improvements a month. Individually, these are probably worth a few dollars here and there, but they add up to a whole bunch of benefit. Because the individual returns are small, an ROI focus would tend to dismiss them as worthless (especially as the cost of working out ROI would have to be met from somewhere . . . ), and you'd end up just doing the big Kaizen events. Now, a lot of people would like this - afterall, why bother with the small improvements of dubious payback when you can bet on some fully justified and costed winners? But this is completely missing the point. Three points in fact. Firstly, Lean is about creating a culture of improvement, and to do that, it's essential that people feel empowered to make whatever improvements they can - no matter how small the benefit. Secondly, lots of small improvements have a significant competitive advantage - they're extremely hard to copy, and often, there's a degree of path-dependancy, making them IMPOSSIBLE for competitors to copy. And finally . . . statistically most things do in fact fail. But given an equal probability of failure (say, 99%), it's better to have a hundred low cost improvements of which only one pays back big-time, than trying to engineer out that the odds for that one big project! That's what I think - and sorry, as I'd intended this to be a nice short reply! Karl. Hi Lee -

I tend to agree - trying to work out ROI on this sort of stuff is generally rather pointless. If Lean is really working, then in addition to the Halleluja Chorus Kaizens, it’ll be generating hundreds of tiny improvements a month. Individually, these are probably worth a few dollars here and there, but they add up to a whole bunch of benefit. Because the individual returns are small, an ROI focus would tend to dismiss them as worthless (especially as the cost of working out ROI would have to be met from somewhere . . . ), and you’d end up just doing the big Kaizen events.

Now, a lot of people would like this - afterall, why bother with the small improvements of dubious payback when you can bet on some fully justified and costed winners?

But this is completely missing the point. Three points in fact. Firstly, Lean is about creating a culture of improvement, and to do that, it’s essential that people feel empowered to make whatever improvements they can - no matter how small the benefit. Secondly, lots of small improvements have a significant competitive advantage - they’re extremely hard to copy, and often, there’s a degree of path-dependancy, making them IMPOSSIBLE for competitors to copy. And finally . . . statistically most things do in fact fail. But given an equal probability of failure (say, 99%), it’s better to have a hundred low cost improvements of which only one pays back big-time, than trying to engineer out that the odds for that one big project!

That’s what I think - and sorry, as I’d intended this to be a nice short reply!

Karl.

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