Here’s a fact of managerial life I’ve learned from experience: When managers measure results from an activity or process, the results almost always improve.
I realize that’s not an original insight. In fact, it’s one of the oldest truisms in management theory.
But there’s a follow-on question that’s a little more difficult: If measurement is such a powerful tool for improving results, why aren’t results always improving?
There are two basic approaches to measuring performance. Some managers prefer a bottom-up approach, seeking to focus on processes at the lowest possible level. When more information is provided to front-line employees on the shop floor or in the customer service team, those employees are able to make better decisions.
But it’s not uncommon to see uniformly good performance indicated by these process measures within a company that is not succeeding. One reason this happens is that the measures are poorly designed.
Some years ago I was studying a large manufacturing plant that was struggling to keep up with demand. It produced incredibly complex machine tools with many component parts. Due to exacting specifications, many of these components were produced in-house. The plant housed the largest machining operation I’d ever seen.
Working with the plant’s industrial engineers to understand where production bottlenecks were occurring, I saw that, by most indicators, production capacity was adequate. Only a few machining centers seemed to be overloaded.
I went to visit the supervisor of one of the overloaded machining centers at lunchtime so I could gain his perspective. When I got there, I was shocked to see the machines sitting idle.
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