The Dark Side of Process Measurement
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The document discusses the dark side of process measurement that can occur when measurements are not implemented properly. It provides an example of a grocery warehouse that focused only on productivity measures, which led to deteriorating service levels and falling behind competitors. A process improvement team was formed and discovered issues like fatigue causing inventory to become out of stock at higher rates than competitors. The document argues management needs to focus on root cause analysis and mission-level goals, rather than just functional metrics, to avoid unintended consequences of process measurement.
The Dark Side of Process Measurement
- 1. The Dark Side of Process Measurement
- 2. Process Measurement Measurements are based on facts in order to replace decisions.
- 3. Dark Side of Metric Reckless Cause & Effect Measurements can be harmful. Employee behavior changes must be with new process measures. Changes are essential for organzational progress & improvement.
- 4. Chronic Inventory Adjustments Logistics VP: focus on Productivity of grocery warehouse. Apply new computer system to obtain productivity measures. 2 yrs tenure, cases FTE improved However, service levels(% of time shoppers find an item in assigned slot) deteriorated. Outcome: lagged the chain’s competitors.
- 5. Process Improvement Team Goal: Look at process to improve service levels. Members: Low ranking, auditors, office managers, clerical workers, analysts. Mapping: Alternate selecting process & restock waves.
- 6. Measures Picking list (quota of work to be done in fixed time) count stock, enter data. “M” for missing, deducted from invoice. Restock waves: move overhead storage into picking slots. Cycle counts: ensure accurate due to computerized inventory records never actuate enough.
- 7. Outcome Adjustments are evidence of chaos It didn’t indicate the cause such as recording theft or inventory shrinkage. Diagram: Thursday & 8-9am have highest missing rate.
- 8. Thanksgiving Jell-O Attempt to keep up higher picking rate but fell behind as fatigue set in. Symbol of exhausting supply. VP: speed up work standards Store Manager: rush to shop in nearby competitors.
- 9. Self-defeating Responses Behavior in reaction to process measures damage performance. Omitted items push store managers to take unconventional ways to satisfy customers but violating financial control. Higher Out-of-stock levels than competitors.
- 10. Cocoon of Silence Avoid embarrassment/defensive reactions. Actual improvement to correct poor measures. Induce systematic improvement activities to eliminate bad result. Counterproductive Behaviors: dark side of process measurement Self-serving, narrow, non-systemic metrics: self-defense eg. Logistic VP
- 11. Root causes of Dark Side Management & Education fail to create understanding process behavior analysis (process tempering become rampant). Insufficient understand the roles of Cause & Effect analysis in process improvement. Lack of a broad, mission oriented management framework.
- 12. Root causes of Dark Side Management performance assessments overweigh functional & process level metrics due to its objectiveness. Underweigh mission level accomplishment. Culture of blaming instead of find & process improvement.
- 13. Avoid the Dark Side 1. Avoid/minimize process measures 2. Set up measures & let ppl try their best 3. Set up measures & learn process improvement. 4. Set up planning, improving, & measuring as a system to accomplish the organization’s mission.
- 14. Avoid the Dark Side of PM 1. Keep discussions about process factual & testable. 2. Turn deployment of new process measures into opportunities. 3. Audit & edit measurement subsystem regularly. 4. Stress mission level organizationwide in exe lv. 5. Avoid metric pitting function against function.