I have a client who is very excited to have achieved 12 months without sustaining a Lost Time Injury (LTI).  This is a record for this particular site and a great achievement.

But does this measure drive the behaviour we  need to achieve long term sustainable continuous improvement in everything we do for our customers?  Sure, having an injury free workplace is something we should be aiming for because it enables us to reliably supply goods and services to our customers.  Additionally, we have a responsibility to our employees to provide a safe working environment, but how should we measure our safety performance?

The number of Lost Time Injuries, often expressed as the number of LTI’s per million hours worked (LTIFR) is a popular measure for safety.  One problem is that this metric is a “lag” indicator that doesn’t necessarily provide a good indication of how our safety performance will track in the future.  Also the longer we go without having an LTI, the more pressure there is to not report an LTI.  In my experience this means that we find ourselves going to great lengths to make sure any injury does not count as an LTI.  Have you ever heard someone say “If we could just get that person back to work quickly on light duties  we could prevent this “becoming” and LTI?”  This is not showing true respect for our employees, and communicates the wrong messages to our workforce.

I once worked for an organisation that had achieved 2 years LTI free, and in doing so had created so much pressure on the employees that no one was prepared to admit they were carrying injuries.  Eventually there was an avalanche of repetitive strain LTI’s that had been “covered” up and remained untreated because nobody wanted to be the one who spoilt the LTI performance measure. The company’s focus on the LTI measure had actually resulted in injuries that were much worse than they might have been had they been reported and treated earlier.

So, what is the answer?

Wherever possible we should be using “lead” indicators that help us identify problem solving opportunities as early as possible in the process.  So for safety, perhaps we should be measuring how many near misses are reported and how quickly corrective actions are implemented to prevent or reduce the risk of their re occurrence.  By focusing our attention on measuring how well we are improving our processes  to prevent near misses from ever happening  we are shifting the emphasis to “prevention” rather than “cure”.  We are also providing a real mechanism for employee involvement that will lead to a more sustainable set of operational outcomes in the longer term.

Lag indicators may sometimes achieve a result faster, but as a general rule for designing any metrics we should always insist on having lead indicators that drive the right behaviour and provide a more sustainable outcome in the long term.

All too often we find companies that are struggling with measures that don’t work.  Sometimes there are way too many measures for the people in the organisation to focus on.  Sometimes the measures are simply poorly designed and result in behaviour which creates waste and inventory.  Sometimes the measures simply don’t make sense to those being measured and are not taken seriously.  Sometimes the measures simply don’t help us focus on the causes of the problem or issue.

Our measures should provide immediate real-time feedback on performance, and create opportunities for improvement every minute of every day.  They should be driving us toward the the Ideal State for the process, and be helping us to eliminate waste and improve the flow through every process in our organisation.  They should be designed to engage and encourage the entire workforce to become actively involved in frequent “experimentation” to improve everything we do.

Our measures should also be designed to encourage us all to go and observe what is actually happening in the process.

The measures should form a balanced and dynamic link between our value streams and our daily problem solving processes.  To achieve “balance” it is useful to ensure we have measures that cover the following set of categories: Quality, Cost, Delivery, Safety and Morale (or Engagement).  The actual measures will depend on the process but should be metrics that are meaningful and “real” for the team who owns them.  To increase the level of ownership and buy-in it is useful to have the team involved with the creation and implementation of the measures, and to have the measures displayed close to the workplace in a format that the team can update easily and frequently.  Also it is important to remember the selected measures need to be metrics that the team can actually influence.

But what should we do if we already have measures in place?  Well here are 3 simple ways to start improving your measurement systems.  These have been written by Stacey Barr.  (Stacey’s contact details are included below.)

#1: Stop Reporting It And See What Happens

Decide, this month, to simply not include all the usual measures and statistics in the performance report that you suspect no-one refers to. You’ll soon work out, by trial and error, which measures really do matter, because they’ll be missed. It will help everyone else work out what really matters, too.

#2: Test Its Alignment To Strategy

Grab a flipchart page, or whiteboard, some pens, your business plan, and a list of all the measures you currently report. Along the top of the page or whiteboard, write each of the business goals. Then one goal at a time, list the measures that really, truly are fabulous evidence of the achievement of that goal. If the measure isn’t fabulous evidence, then flick it.

#3: Have A Single Version Of The Truth

Don’t measure the same thing in 12 different ways. Decide the one true way to calculate and report the measure, and standardise on that. I’ve seen immense amounts of time wasted in measuring something as straightforward as cycle time over a dozen different ways by almost as many different people, simply because no-one drew a line in the sand and said “Here’s how we measure this.”

Stacey Barr is a specialist in organisational performance measurement, helping corporate planners, business analysts and performance measurement officers confidently facilitate their organisation to create and use meaningful performance measures with lots of buy-in. Sign up for Stacey’s free email tips at www.staceybarr.com/facilitators and receive a complimentary copy of her renowned e-book “202 Tips for Performance Measurement”.

Why is it so difficult for many organisations to implement what are relatively simple concepts included in Lean?  Could it be that usually the leadership and cultural difficulties are larger than we thought?  Could it be that we have underestimated the effort required to achieve the levels of engagement necessary for successful cultural change?  Could it be that our people are continually distracted by other priorities that require urgent attention?  Could it be that our outdated measurement systems are diverting the attention of our teams away from the Lean message we are promoting?  Could it be that we have not provided enough good leadership or could it be that we have not developed a compelling strategy for change over a long enough timeframe?  Could it be that we are expecting our people to implement Lean in their “spare” time or could it be that Lean is something we think about every now and then, or when it’s convenient?  Could it be that we are thinking Lean is just a set of tools?

Here are 10 points to consider for those organisations implementing Lean, written by Jamie Flinchbauer, co-author of The Hitchhiker’s Guide to Lean and Partner at The Lean Learning Center.  These could be useful points to consider when the going gets tough in your Lean journey.

1. Rome wasn’t built in a day…and neither will be your lean transformation. Lean is not a one- or two-quarter commitment. It takes one to two years to build the necessary momentum, and from there your journey will last forever. Yes, tools such as kaizens can provide very quick and significant improvement. But, without taking the time to implement a program that yields sustainable benefits, process improvements gained by lean tools will slowly deteriorate back to where you started. Significant and sustainable results will occur throughout the entire process, but the most profitable returns are realised through a two-to-five year plan.
2. Lean transformation is not a part-time job. Don’t expect someone to lead the lean charge in his/her spare time. You need to assign a dedicated leader or team to take on this challenge. It requires daily attention from leaders who fully understand the scope of the project and who won’t get caught up in daily distractions. Most cultures are centered around solving today’s problem, reacting faster and better, and getting results today or tomorrow. Stuck in that culture, it is hard for leaders to consider a multi-year journey — people need to be extracted to focus on a different timeline. In addition, these leaders require continued support from management throughout the implementation.
3. Lean is more than just tools. Lean is not born from what you see, it is born from how you think. Lean is a set of rules and principles, not just tools. Tools focus on physical system changes, but that is not where the heart of lean beats. The entire way of thinking must become embedded in every person of your organization. You may fix one problem or process with a lean tool today, but if the old thinking continues, it will recreate the old problems. Only new principles or beliefs change behaviors, not systems or tools. Sustainable lean change — the kind that builds momentum — comes from the mind and heart of all employees.
4. Lean is a journey that never ends. There is a tendency for companies to declare “We’ve done it. We’ve achieved lean.” The truth is, lean is a constant, never-ending process. You will always strive to be lean, but you will never get there, because there is always a gap between where you are and your ideal state. If you believe that your journey has ended, you’ve failed. Even when you can consider yourself a success, do not stop. Success is exemplified by an organisation that continues to move forward at such a pace that it would be difficult to even try to slow it down. Consider Toyota — no matter how much better they are than their competition, they continue to find more and more opportunities to improve each and every year.
5. Be prepared for resistance. When change is proposed, people often feel threatened. Some will think it’s because there has been something wrong with what they were doing, but most will just be uncomfortable with the unknown. So, as your company embarks on this journey, you must work to help people understand why, what and how. Remove the fears — or make NOT moving forward the more fearful choice. Also, many people think lean means cutting staff, when in reality it’s about working smarter to preserve heads and even increase the workforce through market growth.
6. You need leaders to take on this challenge, not managers. Managing is maintaining current reality. Leadership is moving people toward the ideal state. Lean transformation is about leadership. And leadership is not a position or rank. Look for people at every level of the enterprise who are capable of leading. If lean is about transforming thinking, then to lead lean, you must be able to teach.
7. Be prepared for the investment — in both people and time. People will need to learn new skills and they will need the time to gain them. This means experimenting with every process everyday to get it right. There is also a financial investment, mostly in training, but also in process changes. However, the evidence is clear that the payback for this period is in months and not years. You can use focused-improvement tools such as kaizens to get immediate gains and pay for the investment. The potential of difference between lean and non-lean companies is not 5-10 percent, it is 100-1000 percent improvement in quality, cost, delivery and, of course, profit.
8. Lean is not just about the shop floor. Taiichi Ohno, one of the fathers of the Toyota Production System, said decades ago that “the Toyota Production System is not just a production system.” If you reduce lead time in manufacturing by 90% and can get product out in hours, but order entry takes four weeks, then you aren’t really moving forward in the market. You must attack every corner of the business from accounting to human resources to manufacturing.
9. There is no recipe, but there is a roadmap. A recipe tells you exactly how to do something - the amounts, sequence and timing. There is no such recipe for lean success since every company starts with a different set of ingredients (or factors and constraints). However, there is a roadmap. There are guideposts along the way to help you determine where you are and offer potential solutions to help you get to where you want to go. Learn from as many other journeys as possible to help understand the roadmap.
10. Don’t just copy the answers. Many people have tried to succeed at lean in the past by copying the solutions that Toyota or others have found, either through benchmarking or out of a book. The problem is, this is like a kid copying off someone else’s test only to find out they were taking a different exam. Your company is unique and will likely have some unique problems and constraints — you must engrain lean thinking in your organisation so you can find your own answers.