Measure What Matters!

Over the course of many years of interactions with organizations in a wide range of industries, as an employee, visitor, or consultant, I always find myself looking for posted performance measures (charts, graphs, etc.). The existence of measures is as big a variable as the type used and the quantity found. In some cases, there might be a chart here and there or a count, such as “Days Without Accidents.” In other cases, there may be nothing at all, and every now and then there will be walls full of measures.

How does it happen that there is such a large variation in measures used in businesses? For the most part, there are common measures found in almost all organizations, such as On-time Delivery, Profit Margin, and Customer Satisfaction. At some companies it is clear the measures were put in place as problems happened, so it’s more a matter of reaction than intention.

A machine breaks down several times. Uh oh! Start measuring. An employee gets injured…then another. Uh oh! Start measuring. Customer complaints suddenly start rolling in. Uh oh! Start measuring. While these actions aren’t bad—of course we want to resolve the issue—it is much better to be intentional about what you’re measuring so that the act of continuously gathering data, posting measures, and reporting results is supported.

So, what’s the purpose of measures? Perhaps you’ve heard or seen this before: “In God we trust, all others pay cash.” The late quality writer W. Edwards Deming had a twist on this phrase with this quote: “In God we trust, all others must bring data!”

Stated differently: Good measures are a key mechanism for fact-based decision-making, leading to more profitable and successful companies. Going beyond just having good measures, it is also preferable that measures are understood and used at each level within an organization.

However, I wonder what percentage of most organizations’ employees truly understand all measures used, and even more so, how those measures are used to make what decisions. While I can’t back it up by anything more than personal observation, my bet is it’s a small percentage. I know of companies that have those walls of performance measures, and a lot of time is spent keeping them updated.

Here are two key questions to ask yourself when considering measures for a LSS project, or for a business as a whole:

• Is the time spent keeping a measure updated and posted worth it?
• Does the measure lead to action?

If the answer is ‘No’ to one or both questions, then it is time to rethink the measure. Ultimately, we want measures which lead to actions which help us achieve goals—in both our professional and personal lives.

Where, then, should we start with building measures? This is a fundamental question on any Lean Six Sigma project: What is the process ‘Y’ or output measure? We need to know what our objectives are, right? Start with defining what it is your business wants to accomplish. To be clear, this typically isn’t the responsibility of a Green Belt or Black Belt. Instead, it is the job of senior management. But it IS the job of GBs and BBs to understand those company-level objectives and to make sure their project goals are aligned with organizational goals.

Now, let’s say you do have top objectives (good!) but they are not known across the organization (bad!). Then how can you link daily performance to organizational goals? So, define those objectives. Make sure each measure has a good operational definition (a great LSS concept which goes way beyond continuous improvement efforts). Then make sure everyone is clear on what the measure is, what it measures, how it is measured, and who manages it.

Once in place, begin your analysis. Here are some fundamental questions to ask about any measure:

• What is the measure telling you about the business, employees, or processes?
• Is the measure clearly understood by everyone who should know?
• Is the process firing on all cylinders? If not, what improvement actions need to be taken?
• Is there a clear connection between the measure and a response if things go wrong?  If you’re measuring something that doesn’t call for action, then why measure it?

Who should understand a company’s measurements? This, of course, is a debatable topic. I’ll always be on the side of everyone in the company understanding measures and knowing how to take action to cause improvements…or at the very least…ask questions. Otherwise, don’t you just have people collecting data blindly? If employees understand what the measure is for and how it can lead to improving the business, then they have a better chance of making an impact beyond daily responsibilities.

Ok, Mike, so what now? Simple. Take a close look at what you’re measuring. When is the last time a measure led to action? If you ask anyone in your organization how a measure is used, would he or she know? Are your measures connected to top objectives? Are your measurement boards there to communicate to employees or are they there to look good?

Take some time to question your measurements. A lot of time is spent collecting data. Shouldn’t that time lead to a good return? And one last thing…keep it simple. Just because you measure a lot doesn’t mean you measure the right things. Only measure what matters.