All Posts Tagged With: "management by fact"
Communicating Performance on Key Measures
Wainwright Industries manages by fact. One visit to Mission Control and you believe it.
Wainwright dedicates one conference room at its headquarters in St. Peters, Missouri, to displaying the information and analysis that drives its award-winning continuous improvement efforts. It calls the room Mission Control.
The walls display a plethora of charts and graphs, including trends for quality and performance indicators and, for each customer, monthly satisfaction index scores, trends for quality measures, stretch targets for exceeding customer expectations, and weekly customer feedback reports.
Wainwright developed five key strategic indicator categories from its strategic business planning process: safety, internal and external customer satisfaction, Six Sigma quality, and business performance. “We focus on safety first and making money last,” says plant manager Mike Simms. And the focus has paid off. “We went from $100,000 in Workers Compensation claims in 1991 to zero in 1994,” Simms said, “and our number of recordable accidents dropped from 66 to 12.” At the same time, putting business performance last did not mean it suffered. Over the same time period, Wainwright’s gross profit as a percent of sales jumped from 8.7% to 14.2%.
Mission Control displays key quality indicators for each of the five categories, all of which link to the company’s mission, vision, values, and objectives. The Mission Control indicators are recordable accidents, associate suggestion rate, internal and external customer satisfaction, internal parts per million, sales, and net income. Trends are updated and reviewed…
23Mar2010 | Steve George | 0 comments | ContinuedGet the Information You Need
Do you have the information you need to do your job? Do you have what you need to make critical decisions?
IBM asked these questions of business leaders in a business analytics and optimization study published in April 2009. One-half said they didn’t have the information required to do their jobs. One-third reported that they frequently lacked the information needed to make critical decisions.
IBM defines analytics as “the use of information to find patterns, identify new possibilities, create scenarios, make predictions, and prescribe actions.” Optimization is “a process that entails analyzing opportunities and constraints and then driving decisions about them deep into the organization.”
In August, IBM surveyed nearly 400 business leaders worldwide about how they use information and apply business intelligence. It compared top performers—top quintile based on self-reported performance relative to their peers—and lower performers in the bottom two quintiles. Twice as many top performers as lower performers had mastered three basic characteristics of information management:
- Aware. They were able to gather and use information from inside and outside the enterprise.
- Precise. They could sort through and extract the most relevant aspects of information.
- Linked. They were able to align information with business objectives and across functions.
Organizations that integrate the Baldrige model also master these basics. They have processes for selecting, collecting, aligning, and integrating data and information, and they have processes for using that data and information to do their jobs and make critical decisions. Management by…
28Dec2009 | Steve George | 0 comments | ContinuedCore Value: Management by Fact
If you were to pick one basic of performance excellence at which most organizations stink, it would have to be management by fact. I remember Curt Reimann, former head of the Baldrige program, saying that the measurement Category consistently produced the weakest responses. We think we know what’s going on, but when you look for facts to support our thinking, you often come up empty.
Peter Senge called this a “leap of abstraction.” “Leaps of abstraction occur when we move from direct observations to generalizations without testing,” he wrote in The Fifth Discipline (Broadway Business, 2006). You are making a leap of abstraction if:
- You assume you know exactly what your customers require but have never formally asked them or checked your assumptions with them
- You make the same assumptions about your employees
- You fix a problem without identifying the source of the problem or measuring the process
- You blame people for mistakes without understanding the system or measuring the process
- You develop a strategy with little knowledge of competitors, the market, risks, or internal capabilities
- You grab a popular new program in the hope that it might turn your organization around
Most leaders and managers are so used to mistaking leaps of abstraction for truth that they feel very comfortable with their view of their organization. Asked to support that view with information and data, they tell stories. Pressed for proof, they point out that it’s their job to know. Suggest that they…
17Sep2009 | Steve George | 0 comments | Continued
