Bill Waddell | On August 18, 2015

Every now and then I come across something that causes me to stop and think, “Wow!  This sure brought things into focus.”  The Costs of Accountability – an article in The American Interest by an academic by the name of Jerry Z. Muller did just that.

He wrote, “The quest for numerical metrics of accountability is particularly attractive in cultures marked by low social trust.”  Ain’t that the truth!  I come across companies all the time whose big questions regarding lean often revolve around metrics:  What are the right metrics to use?  How is lean going to impact our KPI’s?  How do I get management to buy in when lean is going to have a negative short term impact (or perhaps even a permanent negative impact) on our most critical metrics?

The correlation between metrics obsession and lousy culture is solid – and that was the source of my “Wow!” moment.  I’d never thought of it before but Muller is spot on.

The thinking behind management by the numbers is based on

“the general suspicion that those employed in institutions were not to be trusted; that their activity had to be monitored and measured; that those measures needed to be transparent to those without firsthand knowledge of the institutions; and that pecuniary rewards and punishments were the most effective way to motivate “agents.” Here too, numbers were seen as a guarantee of objectivity and as replacement for intimate knowledge and personal trust.”

This is the antithesis of lean thinking.  Lean leaders have great faith in their people and view problems as most likely the result of incapable processes.  They go to the gemba for information and answers. Poor leaders have little trust, think that problems are the result of inadequate people, and show little interest in going to the shop floor.  Instead they while their days away poring over metrics in some back office.

If there is any doubt, read Muller’s thoughts on how to come up with good measures of how things are going:

“Accountability metrics are less likely to be effective when they are imposed from above, using standardized formulas developed by those far removed from the activity being measured. Measurements are more likely to be meaningful when they are developed from the bottom up, not by mining engineers, so to speak, but by those at the coalface. That means asking those with the tacit knowledge that comes from experience to provide suggestions for how to improve productivity and to develop appropriate performance standards.”

Go to the coalface and ask!  He’s absolutely correct.  The folks on the front lines know very well whether things are going well or not, whether they are having a good day or not.  Ask them how they make that judgement and – voila! – there’s your metric.

My big takeaway from Muller’s article is that, when confronted with the inevitable metrics questions, I need to ask why, rather than immediately engage in the numbers and logic.  Muller convinced me that metrics questions and problems more often than not need cultural solutions rather than mathematical ones.

Bill Waddell

Bill Waddell has earned a reputation for defining the leading edge of Lean Manufacturing. With over thirty years of manufacturing experience, Bill is a global supply chain expert and one of the original Lean Accounting “Thought Leaders”. As a speaker, Bill has addressed various Professional, Academic, and Military groups on five continents and has taught in virtually every leading manufacturing forum in the United States. Bill is the author of such books as Rebirth of American Industry, Simple Excellence, and his newest publication: The Heart and Soul of Lean Manufacturing.