How You Measure = How You Manage

By Christian Buckley posted 10-23-2013 00:00

  

You cannot claim success if you do not have validation through measurement, plain and simple. But measurement is also the key to ongoing management. All measures should supply accurate information usable for making good decisions. To paraphrase W. Edwards Deming -- if you don’t know how to use the answer to improve you process, the calculation(s) were a waste of time. Sometimes, managers and employees consider measurement techniques fads because the value and methodology are misunderstood. Many of the discarded tools would work if they were executed properly.

 

A decision maker must understand the origins of the data AND how it was manipulated. Each method of calculation has implications and limits , as does the source of the data. To be relevant, the measures have to be understood by those using them. There are no magic formulas that guarantee success; only good management improves the odds against failure.

 

The first of Deming’s 14 points puts this in perspective: 'Constancy of Purpose' means more than the grand finished goal, it has to be translated into all the “little” day-to-day activities of the employees. Effective management is a combination of the abilities to make correct decisions and inspire others toward the correct goal.  

 

So, how do you check the measures themselves? Start with consistency, so the information can be read and understood. Keep in mind that the measurements need to evolve so the users can absorb more information as their experience and profound knowledge grow, and the measurements can be more finely tuned as you better understand your results and learn how to ask better questions – and capture more refined data.

 

United Airlines, for example, has been adapting external and internal measurements to increase understanding of the maintenance requirements on each plane in its fleet of more than 500 aircraft. It used to measure the on-time performance of each flight using only industry standards. The company then developed a method of adding important supplemental data into the measurement system and then separated the two measures. By keeping the original mechanical reliability measure separate, the company could then add the supplemental issues to the new. By comparing one measure against the other, United now knows if the problems exist in the design of the aircraft (making it engineering’s responsibility) or in the methods of maintenance (the line maintenance department’s responsibility). Graphs, data tables, and even the design of the report continue to evolve as the users of the information become more sophisticated in their understanding of the material being presented. Of course, the ultimate test of the process is whether it is showing real improvement.

 

It is very important that you compare your company to others in the industry to ensure that your internal measures are driving increased reliability. Sometimes, in the enthusiasm to look good to investors and stockholders, some people have adjusted measures with the hope of “more properly reflecting the business environment.” Occasionally, those adjustments actually warp reality and neglect issues of vital importance to the future of the company. The problem is exacerbated when the new measures look like the old ones – usually skewed by management’s “enthusiasm to fit them into the prescribed business model – and are interpreted incorrectly.

 

When Deming visited Ford in February 1981, “he didn’t want to talk about cars or the reject rates on the production line. Nor did he deliver conventional bromides about quality, such as everything would be okay if everyone just worked a little harder. Instead, what Deming really wanted to know about were processes and people and how they were managed at Ford. He wanted to know about the executives sitting in the room, and what they understood their responsibilities to be – to the company, to their employees, and to the customer.”

 

In other words, Deming felt that how management perceived the people involved in the organization was the most important factor to understand. Measurements are subordinate to the attitudes and perceptions of those in charge. The view a boss has of the internal and external environment greatly impacts the future of the whole operation. If the steps taken by management in all the areas they control are not effectively planned then self-created issues will come to the forefront. The boss needs to understand what could occur in the future if they take a certain approach, for example:

 

  • Hiring people who only do what they’re told and who do not see the opportunities in each day will likely force the boss to become a “micro-manager.”
  • Hiring staff that clearly understand the goals of the organization and the daily opportunities will force the boss to readjust his or her thinking on numerous daily issues. The boss will need an open mind, because the employees will discover new paths to the goals as they interact with each other, customers, and competitors.
  • Mixing the staff (hiring both types) means the boss will have to be ‘micro-managing’ some employees while allowing others the freedom to change directions. This could cause serious conflict within the manager and between the manager and some employees when the boss forgets who should be treated how.

 

It becomes very clear through all these points that employees are the most important people to any organization (contrary to the current philosophy of some consultants that the customer is king). It is the members of any organization who are responsible, through their actions, for the success of the endeavor.



#leadership #statistics #InformationGovernance #ProjectManagement #process #culture #measurement #Management
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