ABSTRACT
As with most “old saws,” the “old saw” that you can only manage what you measure is true. Thus, metrics are an important part of the Lean journey. Although one should not equate measurement with improvement, you cannot improve without the measurement of what is important. Vince Lombardi is quoted as saying, “If you aren’t keeping score, you are just practicing.” We didn’t want our Lean journey to be just practice; we wanted it to be the real thing. This makes metrics important. Metrics, more accurately the right metrics, are essential for a number of reasons:
• To allow the alignment of all organizational activities around what is important
• To document what works and what doesn’t; only then can you improve by spreading what works and discarding or fixing what hasn’t worked
• To permit calculation of ROI • To educate managers about financial management and the business
case for quality • To facilitate transparency • To enable celebrating success
As discussed in the Tools to Create Prioritization and Alignment section in Chapter 5, metrics cascade from the system level to frontline processes through VS and RIE metrics. Organizational goals determine the system metrics; the system metrics inform the choice of VSs; VS metrics dictate the metrics for individual RIEs. This cascading of metrics creates organizational alignment and cascades the goals from the leader ship level
to the frontline staff that are in the RIEs. At all three levels there should be at least three types of metrics: financial, quality, and human development. The system metrics are established yearly by the executive team and the VS steering team committee established their metrics yearly as part of the VS analysis/ mapping and submitted those metrics to the CEO for approval. One challenging question in establishing any metric is “How high to aim?” Those very experienced in Lean would say that full utilization of Lean can produce a fourfold yield in productivity and a reduction of errors by 99% (Koenigsaecker, 2013). That takes time to achieve and it won’t happen in year one or even year two. Even with that caveat, I don’t know anyone in healthcare who would aim that high. One role of the CEO is to push for higher rather than lower goals. Moreover, given Toyota’s consistently high performance, there is no reason to think that one year’s high level of performance at either the system or VS level should not be just as high or higher the next year.
