We are all measured on what we do and how well we do it. After all, if you don’t measure it, you can’t improve it. But what happens when we measure the wrong things?
The answer is simple, we get the wrong (or suboptimal) results. Having KPIs is a good thing. But the wrong KPI or the wrong target can spell disaster. It is important to find the right measurements before you implement a tracking system.
Step 1 – What do you want to accomplish? Define a goal. It doesn’t have to be quantifiable at this point. It can be something as simple as “reduce operating costs” or “improve customer satisfaction”.
Step 2 – Is your goal one that will not contradict others? For example, if instead of “reduce operating costs” we used, “reduce labor costs” that could cause a reduction in throughput and then a net increase in operating costs if we are not careful. Don’t improve in one area simply to worsen in another.
Step 3 – Determine not what will get you there, but what will hold you back. Understanding the constraints to your goal will help you to find the areas where your KPIs will assist one another rather than conflict with each other. If you want to decrease operating costs know that you still will have to conduct changeovers and shutdown for cleaning, etc. Quantifying these impacts will help you understand the real room for improvement that you have.
Step 4 – Create your baseline. If you don’t have one, you need one. If you have one, confirm it.
Step 5 – Set a realistic, time-based goal. Don’t shoot for the moon on your first try. Set something modest and make sure you have enough time to accomplish it.
Step 6 – Celebrate your wins. Learn from your losses. Too often we are focused on the bad. Take some time to recognize when you and the team have done well. Don’t punish failure, rather learn from it and publish the results or talk about them in a team meeting. Don’t hide from failure either. People should know if they didn’t hit the mark and how to do better next time.
Step 7 – Repeat. This is a process. Don’t rest, but don’t change things up so much that you don’t have time to make significant strides. Try to have fun and make sure you are winning more than you are losing.