by Lee Fried, on 29 Mar 2008 04:22 pm
The Journey
New Measurement System
As part of our transition to a new management system based on Hoshin Kanri it took the first three months of the year for us to define and deploy a strategic plan. We are now in the DCA part of the PDCA cycle. In order to support this part of our cycle we are in the process of developing dashboards at the top two levels of the organization. The dashboards and good measurement is essential to our success moving forward. By making performance visible and binary it will allow us to be flexible and nimble as an organization. Without good measurement it very difficult for us to know how we are performing against our hypothesis (plans) and when their are deviation we would often not be able quickly identify the root cause. Additionally, without a good measurement system it makes organizational learning very difficult, because we often lose track of the mistake of the past and thus repeat them again and again.
This work as generated a whole host of new challenges and learnings. What is very clear is that the measurement systems of the past are no longer valid moving forward into the future. For the most part we have very few process metrics and almost everything we measure is end of pipe and results focused. The outcome metrics we do track are often complex and unactionable. For example we have several index measures that are very difficult to break apart. We also spend a lot of effort tracking financial metrics that are retrospect in nature and tell you little about recent performance. The few process metrics we have are mostly untimely. At the team level our measurement systems are often focused on the individual performer as opposed to the process they are working on. This adds a whole host of challenges that we will need to work through over time.
I am sure that our problems are not uncommon and many of you have been where we are. It will take a lot of work over a long period of time to step by step redefine our measurement system. The great news is that we have a very engaged CFO as well as several other executives that are deep in the learning process trying to think through new ways to deploy measures. Our first step is to teach them to think and see the value streams of the organization so that we can begin to move from a silo based measurement to value stream measurement. I am excited for the learning to come!