Metrics Madness

My career in industry was limited at times by my unwillingness to do as I was told. Despite that, I earned high marks and was rated as a “high potential” employee throughout my career. Here is one of the things that I had difficulty with: stupid metrics. Specifically, metrics that were so obviously wrong that they forced managers and workers to do dumb things like overproduce, sacrifice quality, or seek growth for growth’s sake.

My rule was that the metric that everyone was focused on was likely to be the metric that should be most ignored. So here is what I did:

• As an R&D supervisor in engineering, the key metric was the spend rate relative to budget. I ignored that and focused on advancing the technology.
• As a business unit manager in manufacturing, the key metric was earned hours. I ignored that and focused on quality (via process improvement) because our scrap rate was so high and hurting us both financially and by consistently late deliveries.
• As a supply/commodity manager in purchasing, the key metric was purchase price variance. I ignored that and focused on quality and the assurance of supply (i.e. that we had the parts that the assembly floor needed; right quality, right quality, at the right time).
• As a university professor, the key metric is enrollment. I ignore that and focus on improving the quality of my teaching and student learning outcomes.

I’m no genius; I was just trying to be practical and do what made sense — do the right thing. And, at times, it got me into trouble.

Businesses are often run using metrics that don’t make sense. Leaders mistakenly assume that someone before them vetted the metrics, and that the metrics currently in use are the right ones to be using. They don’t question them, nor do they question the metrics in use when they begin their Lean journey. Nearly every metric currently in use forces people to do things that are anti-Lean.

It turns out that questioning things is not something that leaders normally do or do well. So, for example, to them it makes sense to be the largest and brag about it. Who really cares about that?