Monday, March 9, 2020

Lean Tips Edition #151 (#2476 - 2490)

For my Facebook fans you already know about this great feature. But for those of you that are not connected to A Lean Journey on Facebook or Twitter I post daily a feature I call Lean Tips.  It is meant to be advice, things I learned from experience, and some knowledge tidbits about Lean to help you along your journey.  Another great reason to like A Lean Journey on Facebook.


Here is the next addition of tips from the Facebook page:


Lean Tip #2476 – Leaders Be Yourself
There is no replacement for authenticity. People can sense fakeness! Having to put on a face with your employees every day can not only lose their trust, but it also makes work less enjoyable for you.

There's no need to overcompensate with certain leadership styles based off of how other people lead -- especially if it is out of your comfort zone. Behaving in a manner that is consistent with your beliefs and values will give you more energy each day and it will send a message to your employees to be themselves.

Lean Tip #2477 – Get Everyone Behind the Mission and Keep Them There
One of the biggest challenges at a company, especially as it grows, is keeping each employee excited about the work that they're doing. When people are working intrinsically and feel like the work that they are doing is the best possible way that they could be spending their life at the moment, their output is going to be exponentially higher.

If they're basing part of their self concept on the work that they are doing and they care deeply about it, then each day they will be coming into work with the energy to give it all they have.

Lean Tip #2478 – Give People Freedom and Autonomy
If people feel like they have to be doing their work in a particular way, have to wear certain things in the office, and can't be themselves, they are going to be less happy and productive.

Having honest conversations about the type of work they want to do, encouraging employees to take a goal or idea and run with it, and letting them revolve their work around the lifestyle they want can create momentum in the office -- encouraging employees to work harder on what they enjoy most.

Lean Tip #2479 – Encourage Risk Taking
If there were a 40 percent chance that a project one employee could take on would fail and a 60 percent chance it would succeed, then the decision to pursue the project will be largely based on their perception of the risk of failure. In a culture where failure is met with harsh criticism and fear of being fired, these 60/40 decisions that, overall, would benefit a company, won't be enacted.

Employees face decisions like these daily on whether to try something a bit more ambitious than the norm. Encouraging this risk taking will not only make employees more confident and autonomous, but it will yield more output within a culture of innovation.

Lean Tip #2480 – Foster Good Communication
Open and honest communication is at the heart of a happy and productive workplace. Start by explaining to your employees your company’s vision, goals and plans for achieving them. Focus especially on clear communication in times of change or uncertainty.

“Meeting regularly with employees face to face is very important in smaller companies,” she says.

In larger companies, you can also share written information, such as a printed or electronic company newsletter. You can include employees’ contributions, staff success stories, company news and business performance metrics.

Lean Tip #2481 – Choose KPIs That Look Forward, Not Back
The speedometer in your car tells you how fast you were driving a second ago. But it doesn’t predict how fast you’ll be driving in five minutes.

So it is with KPIs. They tell you what just happened, but they do not forecast what is coming.

Sometimes, information about the past is useful. But if you are looking to predict where things are headed, you should adjust the metrics you collect to give you information that will allow you to make an educated guess about what’s coming.

In other words, I suggest paying close attention to the metrics you monitor, and choosing those that are leading indicators of your performance.

Lean Tip #2482 – Don’t Let The Numbers Lull You Into Feeling You’re In Control
The more numbers, dashboards and charts and your disposal, the more you will feel you are in control of the situation.

That is not always the case. And in fact, thinking you are in control can be dangerous.

Companies sometimes put a lot of effort into creating very elaborate performance management plans based on metrics. It really feels like they are doing all the right things. But are outcomes actually improving because of all of this? Often the metrics being monitored are not aligned with common objectives, and the related actions don’t actually move the needle.

Just having numbers doesn’t guarantee results. The numbers have to be relevant.
  
Lean Tip #2483 – Less is More With KPIs
The purpose of having KPIs is to drive action that affects results. Many times we find that companies track, measure and report on a boatload of KPIs every week, but there are only a handful that ever cause anyone on the team to take action. This is a big waste of time for the executives responsible for collecting and reporting the data, and can easily cause a team to overlook the few that really do matter.

Remember that the secret to success is not in the KPI itself. The secret to success lies in the actions you take to impact the KPI. Don't measure everything that moves. Measure what you want to move. Focus on actions, get value, achieve success, and maintain momentum. Once you move into the phase of maintaining momentum, you're ready to tackle another area and develop a few more KPIs. You can keep the original KPIs on your dashboard for a period of time to ensure they stay on track, but eventually you may be able to remove them. Less is more!

Lean Tip #2484 – Use Leading Indicators To Drive Results
KPIs come in two flavors: Results Indicators and Leading Indicators.

Results indicators report what you have achieved. These are the usual suspects such as sales closed, products shipped or net profit. Use results indicators to establish targets for effective annual and quarterly plans. Begin with the end in mind by setting targets, and developing a plan to hit the targets.

Leading indicators, on the other hand, are predictive in nature. These measure how you are doing on the activities and levers that will move your outcome in a positive or negative way. Identifying and tracking leading indicators with frequency will help guide your day to day operations and decision making, and can give you a glimpse into the future, allowing you to make adjustments mid-stream that will positively impact your results.

Starting at your result indicator will not get you there. Instead, push on your leading indicators to drive towards your results.

To find your leading indicators, ask yourself "What results are we trying to achieve?" Once you understand what you need to achieve, start peeling back the layers of the onion by asking more questions to determine what actually causes that result. You may need to go several layers deep to get to the most important leading indicator. Once you have discovered your most important leading indicator KPI, track it frequently (weekly or daily).

Lean Tip #2845 – Don’t Measure More Than 10 KPIs.
Key performance indicators (KPIs) are powerful, yet they come with a cost. That said, it’s critical to keep the list short and sweet so you can invest your time and resources efficiently. I recommend you start with measuring your number of leads, lead conversion rate, average sales, number of transactions, and margins. The remaining 5 should be operational measurements and tied directly to your goals.

Lean Tip #2486 – Assign Ownership For Your KPIs
Effective KPIs require two types of ownership. The first is the ownership of the KPI in terms of its meaning and interpretation. Someone needs to be in charge of looking at the KPI, interpreting its meaning, monitoring how it’s changing and deciding what that means for the business.

The other ownership refers to the data collection. Sometimes you can automate the process but, more often than not, data collection will require some human interaction. Perhaps certain personnel are involved in transferring data from one database to another, or they have to collect it manually. Again, this ownership needs to be clearly set out and followed through.

Lean Tip #2487 – Ensure KPIs are Understood by People Within Your Organization
It’s essential that everyone in your business is aware of what you’re trying to achieve, and how you’re measuring progress towards those achievements. This is especially important for those who are charged with ownership of the KPIs, but it’s also important for people right across the business, at any level. KPIs should form part of the decision-making process for every employee, and everyone should be able to answer the question, “How will what I am doing today affect our KPIs?”

You therefore need to ensure everybody understands how the metrics you are gathering are linked to your strategic priorities. This will increase “buy in” – how personally involved and enthusiastic your staff feel about your priorities – and ensure that constant review and improvement are at the heart of everything your people do. If you simply tell everyone that they have to collect a whole heap of extra data from now on without explaining why, you are likely to end up with a very cynical and disengaged workforce!

Lean Tip #2488 – Find the Best Way to Communicate Your KPIs
It’s always wise to think about how best to communicate your KPIs so their insights are obvious, engaging and apparent to all. So many KPIs are reported in long reports full of numbers or tables, perhaps with a traffic light graphic to indicate urgency. This is not good enough. There is absolutely no point hiding important insights in excessively long reports that no one ever reads.

Really effective visualizations clearly illustrate trends and variations in data, and engage the reader. Try to find the right picture for your KPIs and create an explanation of the insights so that the nuggets of wisdom extracted from the data are clear, unambiguous, accessible and, most importantly, actionable.

Lean Tip #2489 – Review Your KPIs to Ensure They Help Improve Performance
If a KPI isn’t useful in helping you or others in your business make better decisions, which, in turn, will improve your business’s performance, then it’s just noise. You therefore need to constantly review the metrics you are measuring to make sure they are genuinely useful and you aren’t spending hours (or asking your staff to spend hours) measuring data simply to tick off boxes.

Lean Tip #2490 – Maintain A Healthy KPI Balance.
You want to make sure your KPIs indicate you are maintaining a good balance between People and Process. It is very easy to become so narrowly focused on solving one problem that you create new problems in other places. For example, if an efficiency measure in one area of your business has fallen behind, you may want to develop on or two KPIs designed to drive up productivity in this area. In doing this, you need to be aware of the possibility that you could push too hard on improving this KPI, burning out your people, and possibly doing permanent damage to your relationship with employees.

On the People side, make sure you have 1-2 KPIs to monitor the health of your relationships with:
Employees
Customers
Shareholders

On the Process side, make sure you have 1-2 KPIs to monitor productivity in:
Operations (how you make/buy/deliver)
Sales
Record keeping (how you monitor your finances)


Taking the time to make sure you've identified the right KPIs, that you're using Leading Indicators to track your progress, that you have clearly identified what success looks like, and that you're taking a healthy, balanced approach to running your business can be one of the most important exercises you and your executive team can do together. Invest the time, commit to the process, assign ownership and improve your company's results.

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