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Mark Graban

Mark Graban: The focus should be on improvement, in a balanced set of measures, not just a single number

By Mark Graban, - Last updated: Thursday, February 26, 2015 - Save & Share - Leave a comment

Percent value-added is an interesting thing to measure in a process or a value stream, but we have to be careful putting too much emphasis on that metric.

Let’s say I am managing an optometrist clinic where the average appointment length is 60 minutes. There are three value adding steps: 1) the assistant doing an initial exam, 2) a machine that does an eye check, and 3) the optometrist exam. Those three steps take a total of 15 minutes, so the % VA time is 25%. The waits in between the three process steps are where a Lean thinker would look first. How can we improve flow by reducing delays instead of somehow pressuring people to work faster. Without making any other improvement, and pressuring the team to increase the % VA time, everybody could slow down their work to half speed and increase the %VA to 30 minutes of “value” (hmmm) in 75 minutes of total time or 40%. Hooray! Except everything is now worse. That sounds silly, but people are clever when pressured to hit a single number.

The other concern I’d have is about goals versus a target. It’s great to set a directional goal, such as 100% value added time, one piece flow, or zero defects. These should be viewed as aspirational goals that inspire us to continuously improve and reinvent our work. If these goals are set up as a quota or a target of the “do it or else” variety (or with big rewards for success), people are likely to game the system. When we see big punishments or rewards for “zero defects,” people tend to hide the problems (as Dr. Deming famously warned us about in Out of the Crisis). Leaders can’t confuse a directional goal with something to “hold people accountable” to.

The focus should be on improvement, in a balanced set of measures, not just a single number.

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