Lean Quote: Measure the Right Indicators, Measure Them Well

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.

"Management by use only of visible figures, with little or no consideration of figures that are unknown or unknowable." — W. Edward Deming

It is not enough to simply create a numeric measure. The measure should accurately reflect the process. We use metrics to base decisions on and to focus our actions. It is not only important to measure the right indicators, it is important to measure them well.

Too many metrics create chaos and unnecessary work. Too few metrics will not provide enough measurement to ensure you’re your strategies are supported. Your metrics should provide insights into the progress your agency is making.

One of the biggest metrics mistakes is random selection. The best metrics start with the big picture. Identify the overall objective of your company or initiative. State it quantitatively. It should answer the question: "We'll know this is successful when we see _____ happen."

Without good performance measurements, it is easy for companies to fall into a very common trap: Employees keep busy with all kinds of activities but achieve few of the desired results. Effective performance measurement is the compass that guides management toward meaningful results at the process level, results that will tie directly with the company's goals

Although there may never be a single perfect measure, it is certainly possible to create a measure or even multiple measures which reflect the performance of your system. If the metrics are chosen carefully, then, in the process of achieving their metrics, managers and employees will make the right decisions and take the right actions that enable the organization to maximize its performance.

Q&A With Mark Graban -

Organizations depend on metrics for their business. Question is, are they helping people do the right things? Or, encouraging them to overreact to every uptick, downturn, and change?

Mark Graban, author of, Measures of Success, shows a better way to chart and manage your metrics, in any organization or setting. For your business processes and activities, you need to know what’s working, what’s not, and what to change. And why. Then, you can determine what to stop doing, what to start doing, what to keep doing. 

I  recently had the pleasure of sitting down with Mark Graban  and discussing his latest book Measures of Success. Here's a little bit from the Q&A.

Q: Tell us a little bit about yourself Mark. Where did you gain your expertise?

Mark: I don’t know if I would claim “expertise” as much as I’d point to about 25 years of practice, formal learning and study opportunities, and learning through experience.

I started my career in manufacturing before moving primarily into healthcare in 2005. As an Industrial Engineer, I had some exposure to the “just in time” aspect of Lean as an undergrad, but really didn’t learn about Lean as a people system until I was in the working world. During a rocky and interesting two years at General Motors, I worked under a very traditional plant manager and then under a different plant manager who was one of the original GM people who was sent to NUMMI to learn from Toyota. Between him and other mentors (people GM had hired in from Nissan and also from Toyota suppliers), those were some very formative years.

Writing a book or being willing to get up and talk on a stage creates the risk that you get labeled an “expert.” I still very much consider myself a student of Lean and I try to keep learning, challenging myself, and improving.
When it comes to the topics that I cover in Measures of Success, I was very fortunate to get exposed to the work of W. Edwards Deming and Donald J. Wheeler while I was still in college. I’ve read Wheeler’s books on Statistical Process Control and have, likewise, practiced using and teaching these methods over the past 20+ years. I was also able to take Wheeler’s four-day deep dive workshop, which was very helpful. A few years ago, I wrote about how Wheeler’s Understanding Variation book was so important to me. I was honored that Dr. Wheeler agreed to write the foreword for my book.

Q: Why was this book important for you to write?

Mark:Measures of Success was something I felt driven to write because I kept running across organizations making the same preventable mistakes in the context of Lean daily management. For one, on a project level, I see Lean or Six Sigma projects claiming “success” from a handful of “after” data points. Or, sometimes, it’s a simple before and after comparison of two averages or a historical average and a single post-change data point. These comparisons can be misleading if the apparent improvement in the metric is within the realm of routine variation – we could call that “noise’ or point out that a metric is perhaps just fluctuating around an average. When we claim improvement victory off of a data point that’s not significantly better (or performance that’s sustained at a better average), we only hamper our improvement efforts.

Another opportunity for improvement is the way in which ongoing metrics are being displayed and responded to… and these are not just healthcare management issues. I’ve seen these same problems in manufacturing, software companies, and now healthcare, which is why I wrote this as a broader management book and not just a healthcare book, like my previous titles. But back to the point, when metrics are posted in a way that emphasizes “red / green” comparisons to a goal or target, leaders get caught in an overly-reactive cycle of getting too excited or too upset about every change in a metric. Or, they react to the wrong things (a metric that becomes red) instead of reacting to more meaningful, more statistically significant changes in the metric. Even if people don’t want to read my book, I have a number of blog post case studies about a better method that is the core of my book: “Process Behavior Charts.”

The subtitle of the book captures, I think, the core message of Measures of Success – when we react less and lead better, we can improve more.

I also felt compelled to write this book because I feel fortunate to have been exposed to Wheeler’s methods. I’d guess 95% of Lean practitioners and 99% of leaders haven’t been exposed to these methods. We shouldn’t blame people for not using a method they’ve never been taught. We should challenge “the way we’ve always done things” that that includes the we way we’ve always done metrics or the way we’ve always done Lean management.

Q: What message or key points do you hope the reader takes away for your book?

Mark: The core message is to use Process Behavior Charts on your performance metrics. These charts will allow you to make better decisions. Knowing when to react and when to step back and improve more systematically is a very helpful thing to learn. Process Behavior Charts are Wheeler’s term for what has been called “Control Charts” or “Statistical Process Control Charts.” To those with deeper statistical knowledge, Process Behavior Charts are “Control Charts for Individuals” or “XmR Charts” (since the full methodology calls for plotting the data, “X”, and creating a second companion chart of the “moving ranges,” or the change between each two successive data points). With the X Chart, we calculate and plot three additional lines – the average and the “lower and upper natural process limits” (aka “control limits”). The limits are basically plus and minus three sigma around the average. The limits, combined with three simple rules, help us find “signals” – indicators that something has changed in the underlying system that generates the metrics.

But beyond the statistical methods (that aren’t that complicated), this is really a book about managing better. The Process Behavior Chart methodology is something that I’d hope to see used in the context of local metrics (on “huddle boards,” for example) and high-level executive methods (on “strategy deployment walls”). People who have read the book say they’ve gained great insights from the Process Behavior Charts they’ve created. Instead of wasting time reacting to or explaining every up and down in a metric, they can better prioritize their limited time around reacting to signals… and they can, when needed, step back and use a more systematic problem solving approach (like an A3) to improve a system in a less reactive way.

Q: What advice would you offer someone who wants to make better decisions with data?

Mark: The core advice is found in the ten “key points” that I share throughout the book. My first piece of advice would be to stop comparing just two data points to each other. As somebody told me, “Our organization is data driven, but we need more than two data points.” Another bit of advice is to stop looking at lists or tables of numbers. It’s much easier to see the routine variation and any trends by creating a simple run chart (aka a “line chart” in Excel) and looking at a historical context of at least a dozen data points (which means not starting each year with a blank chart, by the way). Better yet would be to use the use of Process Behavior Charts, because the simple math and rules mean that we don’t have to guess about the appearance of signals and trends. Again, when we stop reacting to all of the noise, we have more time for real improvement.

One piece of advice, as I discuss in Chapter 9 of the book, is to start small… to take a Kaizen approach to the testing and adoption of Process Behavior Charts in your organization. Instead of training everybody on a tool and pushing them to use it, think about effective change management tactics, which start with helping people realize that there is a need for change and an opportunity to do things better. But, old habits die hard and it’s difficult to effect change when people are comfortable with the way they’ve always managed.

Q: What's in store for you next? What's the next project or activity?

Mark: While I continue doing “Lean healthcare” work, I have increasingly started doing work related to Kaizen and Process Behavior Charts in other industries. Teaching and coaching people on continuous improvement in a biotech lab or office setting isn’t really that different than being in a hospital (with the exception of patients not being present) – you’ve highly skilled and very motivated people who are often stuck in a system that’s more difficult and less effective than it could be. The same could be said about smart, motivated managers who are hampered by management methods that are more time consuming and less effective than they could be.


I am still working hard to open people’s eyes to Process Behavior Charts and the methodology there, which includes more writing, speaking, workshops, and coaching. I’m still involved with KaiNexus, a software company that helps spread continuous improvement in organizations in many industries. I am fortunate to have lots of varied, interesting things to do and various creative outlets… but beyond keeping busy, I more importantly want to make a difference.

Book Review: Measures of Success

Companies rely on metrics to run their businesses but are they just reacting to noise or responding to meaningful signals in the metrics. The success of your company relies on learning the Measures of Success.  Mark Graban penned an insightful, practical guide to encourage a new way of thinking about your KPIs.

Accepting a better way requires first that we recognize problems and shortcomings with our current management practices. This book presents a practical, simple method (“Process Behavior Charts”) that separates “signal” from “noise” in our metrics, so we can learn when and how to evaluate and respond to our performance measures appropriately overtime.

Mark starts with choosing the right metrics and the danger of arbitrary targets. He explains why process behavior chars are more effective then other comparisons. When there is inherent variation that is part of a stable process and when there are signals that the system is performing out of the norm and has assignable special case variation. By learning and practicing PBC organizations will be able to react less to noise and waste precision time and spend more time in a state of continuous improvement, by making system changes by understanding and addressing signals in a process.

While the book centers around numbers and calculations it is not another statistics book. Mark includes 10 key points of Measures of Success along with 3 core questions that we should ask about all systems and metrics. Mark shares a number of case studies including lessons from the red bead game. He makes the connection to the Lean mindset of continuous improvement and A3 thinking. Follow the concepts in this easy to understand book and you will learn a new way of thinking about variation and improve more while pursuing excellence.

Measures of Success is a book for managers, executives, business owners, and improvement champions who want to learn how to get the most out of your process and continuously improve. If you and your organization want to be more successful, to improve more, and to be less frustrated I recommend you read Mark Graban’s book.

Disclosure: The author provided a copy of this book for the purpose of reviewing it.

Lean Quote: Appreciation Can Make a Day, Even Change a Life

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.

"Appreciation can make a day, even change a life. Your willingness to put it into words is all that is necessary." — Margaret Cousins

If you want your employees to be happy and productive, you need to give them recognition for a job well done and let them know their work is appreciated and important. In a workplace committed to creating an attitude of gratitude and employee recognition on a daily basis, every day should be Thanksgiving Day.

Research has shown that recognition and appreciation is the top driver of employee engagement. Perhaps it seems elementary, but if you want employees who are fully engaged, you need to ensure they are recognized when they do great work and that they know you appreciate their contributions to the organization. Motivated employees do a better job of serving customers well. Happy customers buy more products and are committed to using your services. More customers buying more products and services increases your company's profitability and success.

Thank you may be among the first words our parents teach us, but as we get older we seem to forget how to say them. Many managers usually recognize the major achievements--they celebrate the completion of a successful project, they honor an employee of the month. But how often do managers recognize the little steps their employees complete along the way?

Employees need to be thanked…a lot. So says “guru of thank you” Bob Nelson, author of the bestselling 1001 Ways to Reward Employees—and he should know. Bob said, “The number one reason people leave their jobs today is that they don’t feel recognized for the job they’re doing.” We have all heard the adage “you get what you reward.” So if what you want is more outstanding work from an employee, say thank you the very next time that employee performs an iota of outstanding work.

The best recognition is thoughtful, happens daily, and has a personal touch. Even better, it's usually free.  Demonstrate appreciation!  Write a note, take them to lunch, acknowledge the work in a staff meeting…whatever seems right.  Just remember to say thank you.

Book Review: Four Types of Problems

If you’re in business then it is inevitable there are problems that need to be solved. Unfortunately, many are not great problem solvers. We want to solve each problem we face. Not all problems are the same and can’t be solved the same old way. Now there is a new resource to help you understand and coach the art and science of effective problem solving.

In Four Types of Problems, continuous improvement expert and author Art Smalley shows you how to break the “hammer-and-nail” trap.  He demonstrates that most business problems fall into four main categories, each requiring different thought processes, improvement methods, and management cadences:

Type 1: Troubleshooting - A reactive process of rapidly fixing abnormal conditions by returning things to immediately known standards.

Type 2: Gap-from-standard - A structured problem-solving process that aims more at the root cause through problem definition, goal setting, analysis, countermeasure implementation, checks, standards, and follow-up activities.

Type 3: Target-state - Continuous improvement (kaizen) that goes beyond existing levels of performance to achieve new and better standards or conditions.

Type 4: Open-ended and Innovation- Unrestricted pursuit through creativity and synthesis of a vision or ideal condition that entail radical improvements and unexpected products, processes, systems, or value for the customer beyond current levels.

The book starts with a history of problem solving techniques over the last century.  There are far more similarities in the approaches then differences. They employ some type of observation to understand the situation, some form of problem definition, analysis, implementation, experimentation, measurement, and an interactive cycle for learning.

Art presents a basic framework and logic of the four types of problem solving with practical steps for application. He clearly characterizes four distinct types of problems by their defining features making problems quickly recognizable and actionable. Each type of problem category has its own sub-system and surfacing mechanism, management cadence, timing, and difficulty level, he explained. One size does not fit all situations and just training people in tools or techniques only scratches the surface of problem solving.

This book is a great resource to train and develop your own problem solvers. Art shares the strengths and weakness of each problem solving technique. It is also helpful as a reference guide when your stuck. Each chapter includes questions for you and your colleagues to reflect upon and address.

The Four Type of Problems is useful book to anyone interested in solving problems and making improvements. Art did a wonderful job breaking down this challenging topic. He gives us a framework, a mental model, to effectively approach and assess a situation in order to seek and bring the appropriate kind of thinking to calmly, confidently address the problem at hand. I was delighted by this book and recommend it to anyone who wants to improve their capability in problem solving. 

Disclosure: The publisher provided a copy of this book for the purpose of reviewing it.

Lean Quote: Thanksgiving is a Time to Give Thanks

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.

"There is no better opportunity to receive more than to be thankful for what you already have. Thanksgiving opens the windows of opportunity for ideas to flow your way." — Jim Rohn

It is that time of the year again, when families and friends come together and celebrate the preamble to the Holiday season. Thanksgiving is a time to give thanks for all of the great, influential people in our lives. Our immediate outpouring of gratitude always seems to focus on families and friends, the turkey, stuffing and afternoon football.

However, if we don’t get caught in the raucousness of Thanksgiving, and really sit down and value what we have, our jobs, colleagues, and employees equally deserve thanks. And a simple expression of gratitude goes a long way in the workplace.

Here are four great ways to show your employees how grateful you are to have them, just in time for the Thanksgiving holidays.

1. Have an office meal: Who doesn't love a healthy helping of some good food? Thanksgiving is a great time to try and get all your employees in one place for an office meal.

2. The gift of time: Look to the thing many employees value most: time off. When it comes to the holidays, an extra day to prep is always appreciated. If your company can afford to grant this gift to your employees, give it a shot. 

3. Appreciate their work: Nothing inspires people more than knowing their worth. A well-crafted compliment can be better than even the most expensive gift. Your praise can work to kill two birds with one stone. Give your employees the gift of gratitude while also motivating them to produce better work. Sounds like a win-win gift to us.

4. Thank-you wall: When words aren't enough, showcase your creative side. This public display of appreciation is a great way to acknowledge how everyone's good work contributes to a stellar company. Leave your workers with a positive feeling about their efforts before they head off for their holiday travels.

So this Thanksgiving season, extend your thanks from family and friends to your colleagues and work community as well.