A prime focal of LEAN thinking as it applies to organizational metrics should be how any specific measure adds value to the organization and its end customer(s). Without a constant eye on this objective, company managers can quickly find themselves reporting metrics for the measure’s sake or because of institutional inertia. Indeed, over time, for some metrics, the cost of collecting, maintaining, and reporting exceed any realized value the knowledge adds to the organization and customers.
Questions to mitigate this risk might include: What value does this metric add to my organization? What value does it add to my customer? What am I trying to accomplish with this measure? Answers to these questions are wholly dependent upon the individual organization’s unique characteristics and, in the end, must fit the situation at hand. An example best illustrates this point.
DARPA, the Defense Advanced Research Projects Agency, was founded after the Soviet Union shocked the world with the launch of Sputnik in 1957. It, and its civilian form ARPA, focus on developing cutting-edge, never done before, technologies. One past project, ARPANET, is the origin of what you’re using to read this article; the internet.
The agency’s director tracks project success percentage. That metric is simple enough, but it’s how the agency utilizes the measure that best demonstrates the point. As one might expect, to provide value to its end customer, the United States, the success rate shouldn’t be too low.
However, to best meet DARPA and ARPA’s end-customer requirements, the success rate should never be 100%. If the project success rate is too high, the projects selected were not sufficiently ambitious. The agency isn’t pushing the envelope to provide maximum value for its customer or fulfilling its true purpose. In short, if they never fail, they aren’t taking enough risk. Each organization must look within and to its customers when determining the best measures to guide them toward operational excellence. Using a LEAN approach ensures the organizational infrastructure investment adds lasting value to both you and your customers.
Rob Wilson, Retired engineering professional and fiction novelist
The author holds a BS in Aerospace Engineering, and an MS in Industrial Engineering funded through NASA sponsored Aviation Human Factors research. After college, his career as a Quality and Manufacturing Engineer in the electronics industry, much of it avionics, utilized a wide range of Lean concepts. He also served in a training capacity for production personnel in 5S and ergonomics and is now a military fiction novelist.