Continuous Improvement: For Good Measure
Heath Ledger, Mark Addy, Paul Bethany, Laura Fraser, and Alan Tudyk in the 2001 Columbia Pictures Film, A Knight’s Tale
“You have been weighed. You have been measured. And you have been found wanting.”
This line from the 2001 film A Knight’s Tale, brings back how I always felt about performance appraisals. Research shows I am not alone; no one really likes to be measured. Measures, metrics and measurement, especially when they concern our own performance, are not popular topics.
This is unfortunate for continuous improvement initiatives because metrics and measurement are the foundation of improvement. For example, I simplify continuous improvement (CI) as:
Measure where you are – Improve – Measure where you got to – Repeat
So without measurement there really couldn’t be any improvement. How would you know you improved?
· Metrics: measures, metrics, indicators, key performance indicators (KPIs) either in numbers (continuous data) or attributes (discrete data like pass/fail, on/off, yes/no, etc.)
· Measurement: the process of how we measure to ensure precision and accuracy every time.
Issues with Metrics
There are some issues with the numbers themselves, too many metrics, conflicting metrics, not the right metrics and leading vs. lagging indicators to name a few.
· Too Many Metrics – People have measured performance since pre-history. The phrase Key Performance Indicator (KPI) entered the lexicon with the work of Art Schneiderman at Analog Devices in 1987 and Robert Kaplan and David Norton’s work on the Balanced Scorecard in the 1990s. The idea was that a few critical metrics 1 or 2 each in 4 domains (Finance, Marketing, Operations, and Human Resources) determined the entire performance of a corporation. Alas, the word “key” in KPIs has been lost in many organizations. Now, in the era of Big Data, it seems that because we can measure and analyze something we should. In CI initiatives, we often create new metrics and that can overwhelm an already over-measured workforce. Use what you have and rationalize metrics wherever possible.
- The Wrong Metrics – In CI we often find that, despite everything we are measuring, we aren’t measuring what matters. For instance we may collect data on total sales by region and not by customers that buy across regions, leading us to misjudge who our top customers are. Or we may track inventory turn, but fail to count work in p