Friday, February 24, 2012

The Lean Dashboard - 5 Common Mistakes

Using monthly financial summaries to keep your business going down the center of the road is like driving your car through the rear view mirror! Our metrics need to tell us how we're doing right now (the dashboard) vs. reflecting ancient history (week end, month end, or year end financial summaries. It's too late to do anything about ancient history.

Now I'd like to express my opinion regarding 5 common mistakes I made and see regarding dashboards:

1. "Too Many Metrics" - max out at 3-5 metrics for any one value stream/department. If a stranger has to study your metric board to figure out what is going on now, chances are, the board looks colorful but it is headache and tear-rendering. One sure sign you have too many metrics is when the meter has stopped on several of the things being measured. Today is 8/26/15, and the last measurement was 5/7/15. Not good. 

2. "No Connection to the Process" - like your car's dashboard, what you're  measuring needs to give you information that people can act on. What if a light came on in your car telling you the milk you bought expires in 1 day? Nice info, but probably not where you want it. Don't roll up stuff from different value streams, or people will have to make their own conclusions regarding what is important.

3. "People don't know the WHY" - this falls under the 2nd P of P4 (Develop your People and Partners) and Respect for People. Make sure that team members understand why every data point on the dashboard is there and why it is important. Metrics are one of the most important ways to guide your ship, and well coached teams with S.M.A.R.T. goals will achieve every one of them. Ever hear the expression "you get what you measure (and what you tolerate)"-probably not, I just made it up. Metrics are to inspire, not make people perspire. Just made that up too. Metrics for a given value stream reflect problems that are the curriculum for daily team meetings, and the source of kaizan activity.

4. "Written in STONE"
Too many well-intended leaders determine what is important in 2008 and then start measuring. And we measure and record and measure and record, forever. This is also a root cause sometimes for item #1 above. Put together a starter set of 3-5 metrics with the team members that reflects steady improvement to a future state. If the dashboard isn't moving you toward your goals, change them. They should reflect your problems (the 4th P of P4), not what you do great.

5. "The UNITS are wrong" - this is off the record, and strictly my philosophy, but most of the 3-5 metrics need to be time-based. Lean is about time. It is the belief that we will win because all 5000 processes in our business are faster than our competitor's. All lean tools are to identify, reduce or save time (VSM, POUS, SMED, TPM (no breakdowns of equipment), Poka Yoke (time lost from errors), etc. etc. Therefore, your lean dashboard should reflect time. Not dollars or number of lost workdays due to injury (that can go somewhere else), or number shipped year to date. Think TIME.

The right metrics makes for great coaching.

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