Lean Quote: Aligning Your KPIs Keeps You Focused

On Fridays I will post a Lean related Quote. Throughout our lifetimes many people touch our lives and leave us with words of wisdom. These can both be a source of new learning and also a point to pause and reflect upon lessons we have learned. Within Lean active learning is an important aspect on this journey because without learning we can not improve.

"Everything that can be counted does not necessarily count; everything that counts cannot necessarily be counted." — Albert Einstein

We’ve all heard the saying, “What gets measured gets done.” It means regular measurement and reporting keeps you focused — because you use that information to make decisions to improve your results. Your most critical measurements are called Key Performance Indicators.

It’s important to make sure that your KPI’s are aligned with each other to avoid unintended consequences later.

1. Ensure your team understands KPI’s. You’ll be an expert once you read the information linked below in “Now It’s Your Turn.”

2. Determine what indicators are important. What are those vital few indicators that tell you things are working as intended?

3. Assess which data elements can be collected easily. If it’s too difficult, you will lose interest and stop.

4. Express the KPI as a formula (e.g. cost/searches=cost per search) and make sure you calculate it the same way every time.

5. Create a simple “dashboard” — a place to track the data on your internal website or on a shared Excel document.

6. Discuss the results every month with your team and make changes to your KPI’s until you are satisfied they are correct.

7. Dig down to analyze the KPI’s for your planning efforts.

KPI’s are one measurement technique in your arsenal. They can be a quick and useful tool to let you diagnose strengths and weaknesses in your process, make strategic decisions, and ensure you are heading in the right direction. Don’t forget: the real value is in the discussion of results with your team, not the numbers themselves.