Monday, 04 December 2017

Measurements Drive Behaviours and that drives your Culture

Font size: + –

3 minutes reading time (647 words)

5082 Hits

If you want to change the culture in your organisation focus on the behaviours, no big shock really but what if I said there is a good chance that your own measures or business metrics are fighting against your efforts to grow your culture and improve behaviours?

Lets Look At An Example

We worked with a company who said that "Quality in Everything" they do is a major cultural belief for them. They used OEE (Overall Equipment Effectiveness) as a major performance measurement, this is essentially a measurement of how well you are using your resources. They set a target for the year of 0.36 or 36%+. Now OEE is made up of three parts and measured from 0% to 100% for each section, and is usually defined as:

OEE=Machine Uptime (Availability) x Machine Speed (Performance) x Quality

The belief was that a higher OEE number would contribute to the desire to have a high-performance, quality 1^st culture. In a drive to meet the target numbers however, there was a major focus from the leaders to "get more out". To do this, teams just turned up the machine speed and focused on improving change overs. The results looked great on the reporting, they quickly were hitting 0.37 (37%), a huge step on from the 0.28 they started with (85% is world class).

Remember OEE is made of 3 parts, Availability x Performance x Quality …. their numbers here were:

0.77 (Availability) x0.96 (Performance) x0.5 (Quality) = 0.37
Production Output was 2310 acceptable units

So, it beat the target, good change overs and blistering speed got them there, but look at their quality, 50% of what they make doesn't meet specification! Out of every 100 items they made 50 were either scrap of needed work done to them - The behaviour here was meet the number at all costs certainly not "Quality in Everything"

We asked Just 2 Questions:

What if you changed the driver to reflect "Quality in Everything", what would that look like?
What if you focused only of 2 of the 3 measures of the OEE & sacrifice machine performance / speed (in the short term) to achieve more?

Our Results

0.82 (Availability) x0.5 (Performance) x0.94 (Quality) = 0.39
Production output now: 2409 acceptable units per hour – a 4% increase in output!

Now the line is running longer and only 6 out of every 100 units need to have some form of remedial work done, certainly still room for improvement but much better than where they started.

The focus on living the "Quality In Everything" gave higher output but it had other, almost immediate, effects:

Output went up & Delivery performance increased: by sending less to scrap or rework more of what was made went out the door
Material Costs went down – less scrap & rework = less cost for replacement or additional material
The teams who were involved not only shared the approach with other areas but became almost evangelical about it.
There was an increase in staff morale: people felt happier with the higher quality they felt they were producing something to be proud of and had knew that "Quality In Everything" was important and a real company belief.

Summary

As a leader you need to give serious thought about the measurements you sent in place. Wrong, or poorly implemented measurements do drive the wrong behaviours just to reach a target. Before you lock down your measure think about how it could be twisted, how does it line up with creating & supporting a culture and how it could put people in conflict with it.

A drive for numbers only does only 1 thing, sooner or later, it sends the numbers down.