by Lee Fried, on 02 Nov 2008 04:21 pm
The Journey
Changing How We Measure
I spent some time this morning working through some strategic improvement plans that our senior leadership team is developing. I asked myself how do we know if this is the right work several times. The answer was always the same, we don’t know. While we know more now about the organization then we ever have we still don’t know enough so we are often having to make decisions based on intuition. Our current measurement systems are not capable of helping us really understand our performance. They are built to support the individual departments and divisions, but tell us very little about where we are and where we need to go. With the exception of the areas where we have driven Lean thinking deeply from a strategic and from an operational perspective we don’t currently have sufficient measurement capabilities to really understand our business.
Having just finished our first enterprise value stream work this gap is really on my mind. I understand very clearly that our current measurement systems are broken and drive the wrong and wasteful behavior and that a major focus of our value stream improvement work this year will be to begin to change these systems. I can’t tell you how many times during this work we visited teams where measures were not used at all or if they were they were almost completely outcome focused. In other words the measures were not integrated into the work nor were the used by the teams to focus improvement efforts. In most cases the measures existed for one of two reasons: either we were measuring something for reporting to outside stakeholders or we were using measures to monitor individual performance (productivity) as opposed to process performance. As you can imagine this led to all kinds of problems and sub-optimization.
Even in areas where we have done a lot of Lean work we still have a long way to go. Last week I was talking with a leader who is frustrated with the rate of improvement and struggling with why things are not moving faster. When I reviewed their improvement plans it was clear that the leader had not changed the metrics of the area. This leaders team was getting mixed messages. The leader was asking them to work differently as a team, but measuring them as individuals. The leader may say things are going to be different, but without changing the measures it is unlikely that people behaviors are going to change. I pointed this disconnection out to the leader and they quickly realized that this was a problem. The good news is that later in the week I got an email from the leader who had already begun to work with her team to change the measures.
This last example I shared is exactly how we will put the measurement system in place that we need. One team and one process at a time. We need to change the thinking and then change the measures. It will be hard work, but its the right work.
on 12 Nov 2008 at 7:30 am 1.leantyro said …
I understand the article - and I can relate. Employees will behave by how you measure them. The right metrics will drive the right behavior.
Mixed messages will indeed be what such employees get if they are asked to behave differently while having the same measure of performance (metrics).
It is as if you tell your workers to produce only good (quality) products - and yet your major metric is efficiency (output) - and thus you push them to produce more output, at the expense of quality.