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Thursday, December 16, 2010

7 Deadly Sins of Lean Performance Measurement

Michael Hammer wrote a great piece a couple years ago on the 7 sins of performance measurement and how to avoid them.  I thought I would review the list in terms of a Lean measurement system.

Vanity: Using measures that make a particular organization look good.  Measures that are aimed at making the manager look good like a partial lead-time improvement, not end-to-end.

Provincialism: Organizational Boundaries - This happens often with localized process improvement efforts.  Measuring within department boundaries not the value stream.

Narcissism: Measuring things from the company’s point of view rather than the customers’.  Measuring from your point of view like delivery performance against promised date not customer's request date.

Laziness: Not placing enough thought into a company’s stage in the industry, strategy and objectives when deciding on what is important to measure. Assuming one knows what is important to measure like cost when delivery performance is more important to the customer or not going to the Gemba.

Pettiness: Measuring only a small component of what is important.  Measuring only a small part like ontime delivery, but the order is not in full.

Inanity: Measurement itself produces consequences by way of employee behavior.  Measuring  without thought of these consequences like prioritizing OEE.  OEE improves but schedule attainment decreases and batch sizes increase.

Frivolity: Not being serious about measurement itself.  Not being serious about improvement such as we can't stop the line to look at problems.

Are you committing even ONE of the seven deadly sins of Performance Measures?

Because if you are, you are wasting money at a minimum, and in the worse case, you are threatening the survival of your organization.  Avoid these 7 deadly sins in your performance measurement system if you want to achieve success.

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