Hoshin Kanri – South Instead of North

[tweetmeme source=”leanisgood” service=”ow.ly” only_single=false]The other day I was out running with my dog and I experienced a troubling situation when the leash got wrapped under her belly.  I blame the dog’s ignorance and not the leash operator’s neglect!  But anyway, it was wrapped in such a way that as I tried to pull her left out of oncoming traffic, it actually pulled her head to the right, closer to the traffic.  Eventually we got the leash unwrapped and finished our run but I couldn’t stop thinking about how this situation mirrored improvement metrics from some of my past workplaces.

Just as Bruce talked about SMART goals in a previous post, we need to pick smart metrics to measure the success towards our goals.  If we pick the wrong metric, even with the best intentions, it will drive you in the wrong direction.  Just like I was trying to lead my dog to the left, similar to Hosin Kanri in our businesses, but the leash or metric was pulling her in the opposite direction.

A classic example of this that I have experienced is to measure WIP at the end of the month and recording this value as your inventory level.  In the batch and queue world, it is common to drive down this inventory on that one particular day to meet the metric established.  The other 29 days of the month the inventory bulges back to uncontrolled levels.

The main purpose of the metric is to reduce the cash tied up in inventory.  However, if you “game” the metric on only one day are you really helping cash flow?  What you are really doing is sending a bull whip effect back up stream to your suppliers, internal and external!  You are increasing your costs while not having any real affect on improving cash!

I have even seen where delivery trucks were not received because it was the end of the month.   (See Jon Miller’s take on some arbitrary dividing point in time here).  I have also seen where materials were purposely let run out at the end of the month, disrupting the ability to make product.  All this was in the name of meeting an honorable metric, just doing it with the wrong process, thus taking us in the wrong direction!

Another honorable direction I have seen go miserably wrong is around reducing costs.  I have experienced too many of these to even list them all in a blog but will include one of my favorites!  Once upon a time we were directed to reduce overtime costs.  The “process” metric that was going to be monitored on our way to achieving the result was how many disciplinary letters were issued for attendance every week.

Don’t get me wrong, coming to work is a crucial piece of a lean and stable value stream, but there are better ways to measure and achieve low absenteeism than by driving supervisors to issue more attendance letters.  Maybe try making the work environment somewhere people want to be rather that create hostility by trying to increase discipline.  Giving positive rewards to the perfect attendance folks would certainly help.

So in summary, please be careful when you pick the metrics you are using to achieve your improvements.  Without the proper thought you may very well be encouraging your team to do more damage than good, thus driving you south instead of towards your true north!


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4 Responses

  1. Bryan: Excellent post, except for one thing. You say: “Giving positive rewards to the perfect attendance folks would certainly help.” Then you will find people coming to work sick, and infecting others, thus increasing absenteeism, and even possibly producing more defects than usual due to their weakened condition (diminished concentration, etc.). You may also have someone who is sick and who gets sicker as the result of coming to work and is therefore absent longer than he/she would have been had they simply stayed home to rest (once again increasing absent days). For instance, someone with a sprained back might have needed only one day of rest, but coming into work may exacerbate the strain leading to more serious consequences and an extended absence. Also, you are assuming the perfect attendance or lack of it is within the control of the employees (else why reward them for it?). But you may be rewarding someone for being lucky enough not to get ill or have any misfortunes befall him/her. Conversely, you are punishing people who don’t have perfect attendance because they were unlucky and got sick or had other uncontrollable urgent matters that required them to be off. [Would you come to work if your dog was seriously injured and needed to be taken to a vet?] In fact, as I alluded to, they may even have gotten sick because of some other ill person coming to work in order not to lose the chance of getting the reward. Such unfair reward practices cause resentment and demotivate people. Heck, if I already lost my chance for the reward because of a day’s absence, why not stay home an extra day, and get back at management? Lastly, you would be sending a subtle message “telling” employees that work is not a fun place to be (or else you wouldn’t need to seduce them to come with rewards).

    If the work itself is rewarding, then that should be sufficient reward for being there to do it.

    • Simon, I agree with your points. It is one of the many slippery slopes you walk down in business and life. The main point I was trying to make is the metric of measuring how many people were disciplined for attendance problems was not necessarily helping improve our attendance, and probably for sure not helping our turnover. Thus creating more costs for the overtime coverage, lost production, and additional training as people left the company when the metric was supposed to help reduce our costs.

      Maybe we will attack attendance programs in a future blog. That is always a controversial topic and you have brought up many of the pros/cons in your comment!


  2. Great post. I have had numerous examples of running on a Saturday to “Make the Month” only to be out of materials on Monday or Tuesday. Also, I have seen emails to the effect no trucks on Friday, read end of the month.

  3. One other item that is tied to improvement is days without a recordable or lost time. There is peer pressure as well as individual concerns when you put out a bonus for 500 days without a recordable. You need to find the balance between the reward and goal to ensure everyone is doing the right thing not the thing that will get the reward.

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