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Mike Rother

Mike Rother: Pay Attention to Outcome *and* Activity

By Mike Rother, - Last updated: Monday, January 28, 2013 - Save & Share - Leave a comment

Question: Is there a Lean way to measure productivity?

Of course there is. A short answer is that you measure both productivity and the process characteristics that affect productivity. Deming said and wrote as much many times, as has Professor H. Thomas Johnson. With Value Stream Mapping + the Improvement Kata we finally have a complete routine you can teach and practice to operationalize their principles. I’ll summarize it briefly here.

(1) Draw a future-state value stream map. At this level you can define desired “outcome metrics” like lead-time, cost, volume. What does this value stream need to deliver? Productivity is trickier at the value-stream level because there are often vastly different kinds of processes in a value stream.

(2) Break the future-state value stream map into loops as described on pages 86-89 in Learning to See, and define each loop’s goals. At this level you may be able to define what productivity each loop should strive for. Your metrics must be mathematically justifiable and consistent, by the way. Don’t just pull some 50% improvement goal out of the air.

(3) Now drop down to an individual process in a value stream loop and use the Improvement Kata there. To do that you’ll need to define the process-level outcome metric (process-level productivity in this case) and describe how you want the process to function. What operating pattern should the process team work toward to help reach the value-stream loop objective? That pattern is called a target condition, and it includes both activity metrics related to activities in the process and the process-level outcome metric.

Of course, to be able to establish a process target condition and process-level metrics like that you’ll first need to grasp the current condition of the process.

(4) Repeat step (3) for the other processes in the value stream. You’ll recognize this as the downward-deploying part of strategy deployment. Notice that individual process target conditions are now tied to your future-state value stream design. You’re developing purpose-driven improvement activity, not random waste hunts.

(5) Once its next process target condition (with an achieve-by date) has been established the process team shifts gears and starts using PDCA every day to iterate toward this target condition. Information about what’s being learned at the process level feeds back up to the value-stream level through a chain of coaching cycles, which is the upward part of strategy deployment.

Take a look at the three diagrams below, which are taken from the Improvement Kata Handbook.

The actual activity of any improvement takes place at the process level. Outcome metrics only serve as a target and “score” you periodically check to see how the improvement game is going.

Mike

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