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Friday, November 16, 2012

Lean Quote: Four Attributes of an Effective Performance Measurement System

On Fridays I will post a Lean related Quote. Throughout our lifetimes many people touch our lives and leave us with words of wisdom. These can both be a source of new learning and also a point to pause and reflect upon lessons we have learned. Within Lean active learning is an important aspect on this journey because without learning we can not improve.

"What gets measured gets done. Make sure you are measuring the right things!" — Peter Drucker

An effective measurement system is one of the most powerful tools for change. In a perfect world, a measurement system will actively promote performance improvement by measuring what matters; providing corrective feedback and positive reinforcement to enthusiastic people who enjoy being measured and take improvement on as a challenge.

An effective performance measurement system should have the following four attributes:

First key of a successful measurement system is Context. Effective measurement can only occur in a positive, supportive context. This is the culture that surrounds the measurement - informational or punishment, process not person. The attitude of the boss. An unfavorable measure is an opportunity not a threat. We want to surface issues, not suppress them.

The second key for a successful measurement system is Focus. Measure the right thing. Be aware of measuring too much. Derive many of the measures from participative policy deployment, not sucked out of the air.

The third key for a successful measurement system is Integration. There must be an integrated system for measurement. Maybe a balanced scorecard or policy deployment, although better in a Lean context would create flow, maintain flow, and organize flow. In any case measures need to be aligned, balanced, and adaptive.

The fourth key for a successful measurement system is Interactivity. Measures need to be acted on in real time. Two-way interaction. Actually setting up the measures is only a small part - how they are used and reviewed is at least as important. Perhaps a daily meeting around the communications board. This is social process, not a technical process.

Good systems need good people. There is no sense in examining a process unless at the same time you examine the people who govern the process. Improvement does not take place on paper. Improvement happens when people employ enthusiasm, dedication, commitment, leadership and morale in their daily routine. A good system on paper is a healthy beginning but if you want results you need to follow up a paper system with a people system.

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