Strategic Measurement in the Lean Enterprise October 30. 2002 Professor Debbie Nightingale
Strategic Measurement in the Lean Enterprise Strategic Measurement in the Lean Enterprise October 30, 2002 Professor Debbie Nightingale
Metrics Serve Multiple Purposes f Performance control systems can serve two purposes, to measure and to motivate H Mintzberg, The Structure of Organizations, (1979) Debbie Nightingale, MIT O 2001
2 Metrics Serve Multiple Purposes Metrics Serve Multiple Purposes “Performance control systems can serve two purposes, to measure and to motivate.” H. Mintzberg, The Structure of Organizations, (1979) Debbie Nightingale, MIT © 2001
Metrics Are Measurements you can Use o Metrics are meaningful, quantified measures e To be meaningful, a metric must present data or information that allows us to take action Helps to identify what should be done Helps to identify who should do it ● Metrics should be tied to strategy and to“core” processes-they should indicate how well organizational objectives and goals are being met through disciplined"core"processes o Metrics should foster process understanding and motivate individual, group, or team action to continually improve the way they do business. Measurement does not necessarily result in process improvement. Good metrics always do. Debbie nightingale, MIT O 2001 3
3 Metrics Are Measurements You Can Use Metrics Are Measurements You Can Use z Metrics are meaningful, quantified measures z To be meaningful, a metric must present data or information that allows us to take action – Helps to identify what should be done – Helps to identify who should do it z Metrics should be tied to strategy and to “core” processes - they should indicate how well organizational objectives and goals are being met through disciplined “core” processes z Metrics should foster process understanding and motivate individual, group, or team action to continually improve the way they do business. (Measurement does not necessarily result in process improvement. Good metrics always do.) Debbie Nightingale, MIT © 2001
When Assessing a Metric System Ask the Following Types of Questions Does it clearly define what constitutes business excellence? Does it provide the information required to set aggressive yet achievable strategic objectives and stretch goals? Does it accurately portray our progress and probability of achieving both long-term strategic objectives and near-term milestones? Does it identify the root causes of barriers? Does it focus the organization on the priority improvement needs? Does it drive the behavior and actions required to achieve the objectives? Does it align work with value? ● Is it easy to use? Does it involve everyone?
4 When Assessing a Metric System Ask When Assessing a Metric System Ask the Following Types of Questions the Following Types of Questions z Does it clearly define what constitutes business excellence? z Does it provide the information required to set aggressive yet achievable strategic objectives and stretch goals? z Does it accurately portray our progress and probability of achieving both long-term strategic objectives and near-term milestones? z Does it identify the root causes of barriers? z Does it focus the organization on the priority improvement needs? z Does it drive the behavior and actions required to achieve the objectives? z Does it align work with value? z Is it easy to use? z Does it involve everyone? Debbie Nightingale, MIT © 2001
What Are The characteristics of a <Good Metric? o Easy to get ● Answers the questions o Produces the desired results Debbie Nightingale, MIT @2001 5
5 What Are The Characteristics of a What Are The Characteristics of a “Good” Metric? “Good” Metric? z Easy to get z Answers the questions z Produces the desired results Debbie Nightingale, MIT © 2001