The Ultimate Lean Metric: Are You Really Improving?

So, I have good news – and I got bad news. Which one do you want to hear first? Ok the bad news…you might want to sit down for this. Well the results have come back from the lab and…it turns out that your manufacturing business is only 50% as productive as it could be (maybe this comes to you as good news. If so, we should talk because you need some new friends). The good news is that you can get to 60% just by tracking and reporting the right information. You can get even more productive than that by engaging your workforce in overcoming issues that are hurting your company’s productivity. But let’s tackle first things first. What Lean Metric are you using to show your opportunities for improvement? And how are you measuring productivity?

What is a Lean Metric?

Okay, I have a confession to make. I used the term Lean Metric with an unfair assumption. In my defense, its an assumption that almost everyone makes when they think about Lean or Continuous Improvement. Its the assumption that your company is focused on increasing productivity, reducing cost, freeing up working capital, optimizing throughput, improving quality, and so forth. Before investing another minute of your time or kilo-joule of your energy in Lean or Continuous Improvement, you should know what’s most important for your company to improve. If the answer is none of the items listed above, you might not be looking for the intel I’m about to share with you.

Your Lean Metric is the one that lets you know 2 things:

1. How much better can you get – notice I didn’t say “how good you already are”. Hey, we all like to look good – but when you’re looking bad, you want to find out before everyone does
2. Where do you place your improvement effort – hopefully you’ve accepted by now that improvement does require effort and you’ve planned for that, come on people. The next step is sizing up where that effort is most economically placed to produce the greatest return on investment. Not all changes are actually improvements – only changes that actually help are improvements.

Now if I walk into your plant and you tell me that you’re achieving over 100% efficiency, we need to have a serious talk. When you tell me that your performance metrics are no longer green but have reached gold status, let me know in advance so I can bring a good therapist along with me. The global standard for measuring productivity is a metric called Overall Equipment Effectiveness (OEE). I like this metric because it measures your equipment output against perfection, which means you can never achieve 100%. And that’s okay. The first step to recovery is acceptance.

However, even OEE as it’s taught in the textbooks is limited because it lacks the human element. The one that says that a person, or group of people, are responsible for the results. It draws focus to fixing machines but not developing people. A better metric would look overall personal effectiveness, which is similar to OEE (availability x throughput x yield) but at a person level as well. This way you can see who has better processes and capability and can help develop capability in those who need it most.

Why Your Lean Metric Matters

You may be thinking, wait a minute here. If I show a low efficiency number, its going to hurt morale and demotivate the team. The flipside is that if you show a high number that isn’t deserved, you’ll spoil the troops, which is also demotivating. To foster a Continuous Improvement culture, you need to reward the behaviors that you want to see repeated. The key is to reward behaviors that produce consistently improving results, not the results themselves. Even better if you can catch the behavior in the act and reward, encourage, inspire, etc. Rewarding results is dangerous because you probably don’t know what behaviors were used to produce those results.

Lean Metrics should help drive the right behaviors; those that lead to better and more sustainable results, as indicated (but not proven) by the metrics. Reward steady and gradual improvement, which is achieved by learning and increased engagement in the right behaviors. As a leader, the Lean metric more than likely represents how much you are investing in building the right capability in your people. The capability to overcome challenges, solve problems, and continuously improve processes in their area of ownership.

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How to Improve Your Lean Metric results?

We all know managers who think they’re “coaching” when they’re actually just “telling and punishing” their employees. They say things like “I told them what to do and they didn’t do it” or “they didn’t listen” or my favorite “they were coached”. This mindset comes from the old command and control management style that just doesn’t work for operational excellence. The reason is because you can command a short-term change in behavior, but if you haven’t built the capability and learning to sustain that behavior, it falls apart under the weight of real life. The key to getting better results in your Lean Metric is by truly coaching people. John Wooden would say that “great coaches can guide the behavior of others without causing resentment”. That’s a powerful skill that every leader should work to master.

Here’s a great way to coach people. You issue them a challenge that excites them or find out what they’re trying passionately to improve. Then engage them in overcoming the challenges between the current and target conditions. Whatever you do, don’t give them the answers – that’s not coaching, that’s commanding. Certainly don’t force them to use certain Lean Tools that you like and expect them to fall in love with the tool like you did; it’s not gonna happen. Let them come to understand that they can’t achieve their goal unless they get the tools or help they need. Once they ask for help, then you provide advice (but not commanding). They must achieve and retain ownership of the process and the improvement. One of my favorite expressions is “the beauty is in the struggle”. Let them struggle, then overcome, and finally be victorious. The Lean Metric will show improvement, then you reward them for all their hard work in overcoming such impossible challenges.