Monday Morning Message on Lean – Measures & Metrics – Monday, November 15, 2010

November 15, 2010

“What gets measured gets done.” – Tom Peters

I had fun working with a client last week helping them determine meaningful measures & metrics to monitor systems that were currently being developed and deployed. We talked about usual things like: 

  • think about if they are short-term, medium term or long term,
  • that it might be good to have a mix of Lean metrics like quality, cost or delivery,
  • we could use a Balanced Scorecard approach (ref: Kaplan & Norton) with financial, customer, internal processed and learning & growth,
  • Are the things we want to monitor drivers, means, or outcomes (ref: Hoshin Promotion)
  • consider the audience – who are these for? value-adders, supervisors, managers or executive management,
  • and trying to have a combination of leading, lagging and real-time measures & metrics

It’s this last bullet that the team really got me thinking. I use a baseball analogy to describe leading, lagging and real-time measures & metrics. For example, a leading indicator may be that I suspect my starting picture has at least 80 throws in his arm today (also known as ‘pitch count’). Currently he is up to 69. Based on this leading indicator, I should consider getting a relief picture ready. Another way to think of a leading indicator may be the amount of budget used so far as compared to what’s left in the project or how close we are compared to our goal (think thermometer graph for fund raising). A real-time indicator may be the ball or strike called by the umpire when the ball passes the plate or the speed of the picture’s fastball as determined by the radar gun. Lagging indicators are usually easy to see like who won the game or the box score information including runs, hits & errors. These are after the fact; they already happened.

Then it dawned on me as the team was working on their measures & metrics and asking questions if something is a leading, lagging or real-time indicator that many things depend on what you are using it for. We discussed the finer points of their measures and try to put these into context. For example, who won or lost the baseball game would normally be considered a lagging indicator (it’s over; there’s nothing we can do about it now). For the most part, I would probably agree until we started to explore other possibilities. What if that win or loss is closer to the end of the season and as a manager I have to start to make decisions about the play-offs like whether to promote someone from the farm system or consider a trade to bolster my team (or reduce salaries)? Doesn’t that lagging indicator now become a leading indicator? Think about another lagging indicator like who finished the season with the most home runs or won a golden glove? Would these possibly be leading indicators of how well they may do next season? Here’s another example, what about the ball or strike called by the umpire? When it is called, that would be a real-time indicator, but shortly thereafter wouldn’t it be considered a lagging indicator? So what time frame are we looking at?

In a lean sense, would takt time be considered a leading indicator? What about the cycle time, is that considered real-time? Would on-time delivery be considered lagging?

I think this would all be based on things like: what are you going to do with the information, what time-frame are you considering, who is your intended audience, etc.

What are you thoughts? Let me know. Thanks – Tony

P.S. If you’re at the AME Conference in Baltimore this week, look for me and let’s talk Lean.

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