Several Key Indicators a Company Should Consider Using

#21
Rob Nix said:
Lord Kelvin (Sir William Thompson, Baron Kelvin of Largs, of thermometer fame) said "If you cannot measure it, you cannot improve it.

Do I get the $500 in check or cash? :vfunny:
Rob, your post caused me to search your response on the web. While on this search I found something else that caught my eye.

"4/16: We may as well start at the top. The following quote will actually BE hard to top. It may explain why we get into such silly messes, too. Who on earth conjured this pocus up for you Ms. Garvey?

“It stated a fundamental truth---you cannot improve what you cannot measure. We hadn’t reached agreement with the airlines for 20 years on metrics---we have it now. We’re measuring the performance of the system.” Jane Garvey to U.S. Chamber of Commerce, February 2, 2001

“Fundamental Truth!?”

How about, “Figures don’t lie, but liars can figure?” Or, “You don’t measure with a micrometer what you will mark with chalk and cut with an ax.” Look around your headquarters, Ms. Garvey. Where do you think your managers GET the ax handles they use to “deal” with employees who complain?

Back to the fallacy of your “fundamental truth.” Please consider an experiment using the writer of that drivel as your test platform. Have him or her sit in the passenger’s front seat of an official automobile. With the door open, ask him or her to grasp the roof of the car---thumb inside and fingers outside. Close the car door as securely as you can. When your writer calms a bit, ask him or her whether you should open the door promptly, or wait until someone can measure the deflection, compression….whatever. This MAY be a stretch, but assuming your writer thinks his or her situation will be improved WITHOUT the measurement, open the door. Challenge the fundamental truth.

PERHAPS, it is closer to “fundamental,” that “you cannot REPORT, accurately, what you cannot measure.” And there may be the hang-up. Are we spending untold fortunes on REPORTS instead of tapping the wisdom of the field to resolve serious issues? Why is ;the headquarters role migrating from facilitating success in the field with resources to micromanaging the field to create pretty reports?

Let’s hope that Dr. Deming is tethered lest he spin in his grave over what has happened to statistical quality control. You are not likely tapping the sources of the best ideas."
 
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#22
Wes Bucey said:
Dr. Deming says that 97% of what matters cannot be measured. But it seems
that management spends most of its time on measures. That is, managers
spend most of their time on what doesn't matter.

For example: Can you really measure "customer satisfaction?" Is the customer who buys with the intent of switching to another supplier as soon as he can find or afford one really satisfied?

I drive a Ford. I'd really like a Jaguar or BMW. Am I a satisfied customer?
Curious as to where you found this staement attributed to Deming. I couldn't find this reference in his book "Out of the Crisis". also, It doesn 't appear to fit his own definition of an "operational definition".
 
A

Aaron Lupo

#23
Wes Bucey said:
I drive a Ford. I'd really like a Jaguar or BMW. Am I a satisfied customer?

Are you happy with the product you purchased. ****, if we went by what we want and not by what we can afford would any of us be considered a satisfied customer?

I want house that is 50,000 sq feet that comes with maids and servants 100 acers of land, can I afford it, not at the present time I can't am I happy with the house I do own yes. Looks like I am a satisfied customer.
 
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RoxaneB

Super Moderator
Super Moderator
#24
Wes Bucey said:
Dr. Deming says that 97% of what matters cannot be measured. But it seems
that management spends most of its time on measures. That is, managers
spend most of their time on what doesn't matter.

For example: Can you really measure "customer satisfaction?" Is the customer who buys with the intent of switching to another supplier as soon as he can find or afford one really satisfied?

I drive a Ford. I'd really like a Jaguar or BMW. Am I a satisfied customer?

So what matters? And then how do you improve upon something if you do not measure it? How do you know if you are improving if you do not measure it? My head is spinning...

Customer Satisfaction is a concept that can not necessarily be measured, per se, but some components of it can be measured and, when summed, provide us with a general feelings as to how well we are satisfying our Customers.

As for the car, let's not confuse satisfaction with dreaming. What are your requirements for a car? Not all of them were met, since you'd prefer having a Jag or BMW, but is that the automaker's "fault" or yours for not getting a job that allows you purchase the car you want. Taking reality into account, the Ford was your best option was it not? ;)

Being a satisfied Customer does not mean you won't look elsewhere or that you can't induldge in a little wishful thinking. I am satisfied with my job...that doesn't mean this will be my position for the rest of my life. I am satisfied with my life...that doesn't mean I don't want to go back to school or wrap up my divorce. I am satisified the sleep I got last night, but hey, I wouldn't mind crawling back into bed right about now.

Rob Nix said:
Deming recommended substituting Leadership for numerical goals. Yet he was a proponent of using numerical/statistical data collection and analysis such as SPC. It's like this: Establishing quotas and targets first, and then finding ways to achieve them is a tail wagging the dog kind of thing. First, establish systems, methods and such (with strong leadership), then measure KPIs (see Randy's fine list), then do logical/statistical predictions, then make improvements. You don't need targets to do that... IMHO
I agree with most of this...to a point. Targets are, IMHO, important. How much improvement is enough? I guess it all depends on how you interpret targets. To us, it is a minimum improvement goal that we are required to achieve...not the maximum improvement goal. That's why we colour our Key Indicators, too.

At a glance, we can see if we achieved our goal. The next step is to understand the impact of the steps that we took to achieve the results. We analyze the problematic points and develop countermeasures.

The minimum improvement goal should be both aggressive and realistic. There should be a plan supporting how it will be achieved. There should be measurables, deadlines, responsibilities, and accountability.

Do we always achieve our goal? No. But we constantly analyze the situation to develop/revise a game plane to achieve the desired minimum amount of improvement.
 

Mike S.

Happy to be Alive
Trusted Information Resource
#25
So, Deming said (paraphrasing here) that numerical goals or targets are bad and should be eliminated, and (supposedly - still looking for confirmation from Wes) that 97% of what matters cannot be measured. Pretty strong statements!

While I disagree with Deming on these two points, at least we have seen some of his rationale for the first statement, but what of the second? What exactly comprises this 97% of important stuff that we cannot measure?

And, of the folks who read this, how many truly believe either or both statements, and why? We have so many practicing Q folks here that I can't imagine they don't have feelings on these principals one way or the other. What say ye?
 
D

David Hartman

#26
Mike S. said:
So, Deming said (paraphrasing here) that numerical goals or targets are bad and should be eliminated, and (supposedly - still looking for confirmation from Wes) that 97% of what matters cannot be measured. Pretty strong statements!

While I disagree with Deming on these two points, at least we have seen some of his rationale for the first statement, but what of the second? What exactly comprises this 97% of important stuff that we cannot measure?

And, of the folks who read this, how many truly believe either or both statements, and why? We have so many practicing Q folks here that I can't imagine they don't have feelings on these principals one way or the other. What say ye?
Mike,

I don't know if I totally agree with 97% or not, but many of the factors that impact quality are not measurable (at least they are currently not measured), such as:


  • Management's effectiveness at removing roadblocks to improvement
  • Management's effectiveness at providing adequate tools/knowledge to the workforce (including the knowledge on how and when to use the quality tools)
  • The amount of freedom that an employee has to implement change/improvements where necessary (without fear)
  • The amount of enfluence that an employee has on their processes and the product

This is but a few of the health of a system factors that really impact quality, but are either immeasurable or are not measured by most organizations (at least IMO).
:bigwave:
 

Mike S.

Happy to be Alive
Trusted Information Resource
#27
ddhartma said:
Mike,

I don't know if I totally agree with 97% or not, but many of the factors that impact quality are not measurable (at least they are currently not measured), such as:

  • Management's effectiveness at removing roadblocks to improvement

:bigwave:
DD,

I agree that many/most companies don't measure these things, but the quote attributed to Deming said "cannot be measured." Hence my disagreement with the statement.

Let's take your first point. First question I'd ask is, "As viewed by whom"? Whose opinions do we want to consider? For sake of argument, let's say we want the view of all of the floor-level personnel as to whether or not management does a good job of removing roadblocks to improvement. Does anyone here think this cannot be measured reasonably accurately? Will it be a perfect measure -- no, no measurements are. But I think it is quite measurable.
 
#28
Mike S. said:
DD,

I agree that many/most companies don't measure these things, but the quote attributed to Deming said "cannot be measured." Hence my disagreement with the statement.

Let's take your first point. First question I'd ask is, "As viewed by whom"? Whose opinions do we want to consider? For sake of argument, let's say we want the view of all of the floor-level personnel as to whether or not management does a good job of removing roadblocks to improvement. Does anyone here think this cannot be measured reasonably accurately? Will it be a perfect measure -- no, no measurements are. But I think it is quite measurable.
I agree. That statement attributed to Deming seems to be out of line with his methods. I found two (outdated) websites that make reference to this statement. One site that made the statement indicated they had "lost" their research references, another a magazine site with an article by Peter Senge. I was unable to gain access without a fee. I located the articles by doing a search using the statement as the topic.

As for measurement, anything with an input and an output can be measured. The question becomes, what effects the efficiency and effectiveness of the process and what method do we wnat to use to measure it.
 
D

David Hartman

#29
Sam said:
I agree. That statement attributed to Deming seems to be out of line with his methods. I found two (outdated) websites that make reference to this statement. One site that made the statement indicated they had "lost" their research references, another a magazine site with an article by Peter Senge. I was unable to gain access without a fee. I located the articles by doing a search using the statement as the topic.

As for measurement, anything with an input and an output can be measured. The question becomes, what effects the efficiency and effectiveness of the process and what method do we wnat to use to measure it.
Here is an article I copied from the the Deming Electronic Network (DEN), it may hold the key the the mysterious 97%.

Guilt by Association

David and Sarah Kerridge

Dr Deming never allowed the term "TQM" to go unchallenged. At a
meeting in Scotland, he saw a TQM poster on the wall. "Is this a
TQM meeting?" he said. "I wouldn't have come if I'd known. There
is such a thing as guilt by association".

This startled many people, because the parts of the Deming
Philosophy that have an obvious and immediate appeal deal with
the continual improvement of products and processes. These are
often described as TQM. But they are just the things that Dr
Deming dismissed as "Essential but unimportant".

He meant that these things that must certainly be done, just
as we should reduce costs, if there is a harmless way to do it.
But they will not bring about transformation, or even ensure
survival. This depends above all on innovation, and on applying
the principles of the Deming Philosophy to the systems and
strategy of the organisation.

The difference is most clearly shown in the table on page 38
of "The New Economics". There Dr Deming says that working on
"visible processes which produce figures" will produce only 3% of
the potential improvement. The other 97% is just waiting for the
enterprising manager to grasp.


I don't have a copy of the referenced "Then New Economics" on hand, but this may be the reference that Wes was speaking of (hopefully he will chime in and let us know for sure). If so, I'm not sure that he is saying that the 97% is "unmeasurable", it appears to be more like the visable processes that we typically measure will only improve 3% of the real issues driving poor quality. In-fact the statement is made (whether by WED or the Kerridge's I'm not sure) that the 97% "is just waiting for an enterprising manager to grasp".
:bigwave:
 
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Mike S.

Happy to be Alive
Trusted Information Resource
#30
DD,

Perhaps you've found the source of the 97% quote, I dunno. Nice detective work.

The guilt by association quote makes Deming seem (IMO) like a crotchety old fart -- maybe he wasn't living by his "psychology" teachings that day. :confused:

Anyway, for a dummy like me, can someone please give examples (Deming's or your own) of the 3% and 97% just so I'm sure I'm not confused?
 
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