Avoid “Analysis Paralysis” When Using Metrics
By Forrest W. Breyfogle, III
Good metrics provide decision-making insight that leads to the most appropriate action or non-action. Using too many metrics can result in analysis paralysis. Businesses are advised to set up metrics that have these characteristics:
- Business alignment: Metrics should concentrate on the processes that contribute most importantly to the bottom line – up and down the value chain.
- Beware of metrics overload: Setting up too many metrics can detract attention from what’s important. Include only those metrics that will be acted on — by either removing a degradation problem or by holding the gain.
- Honest assessment: Metrics must provide a true picture, whether it’s good, bad or ugly. Creating metrics to make the performance of an organization or an individual look good is useless and often is counter-productive.
- Consistency: Components of any metric need to be defined at the outset and remain constant.
- Repeatability and reproducibility: Measurements should have little or no subjectivity. The measurement response should have little or no dependence on who recorded the response and when the response was recorded.
- What’s the problem?: When the metrics response is unsatisfactory, organizations need to conduct root-cause analysis and take corrective or preventive actions that are long-lasting. This is accomplished through the execution of a step-by-step roadmap that truly integrates Six Sigma and Lean tools.
- Time-series tracking: Metrics should be captured in time-series format, not as a snapshot of a point-in-time activity. Time-series tracking can describe trends and separate special-cause from common-cause variability.
- Predictability: A predictability statement should be made when time-series tracking indicates that a process contains only common cause variability; i.e., is predictable..
- Peer comparability: Compare the metrics with peer groups in another business or company. A peer comparison can help identify new kinds of improvement possibilities.
Adapted from “The Integrated Enterprise Excellence System: An Enhanced, Unified Approach to Balanced Scorecards, Strategic Planning, and Business Improvement,” (copyright Bridgeway Books., 2008) by Forrest W. Breyfogle III, CEO of Smarter Solutions, Inc., www.smartersolutions.com
Forrest W. Breyfogle, III, is the founder and CEO of www.smartersolutions.com, an Austin, Texas-based company. He has authored and co-authored 11 books and published over 80 technical resources for well known, worldwide publications on Six Sigma, Lean Six Sigma and Lean methods. In 2004, he was the recipient of the American Society for Quality Crosby Medal for his book, “Implementing Six Sigma,” 2nd edition. Breyfogle is an ASQ Fellow and a member of the board of advisors for the University of Texas Center for Performing Excellence.
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