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Executive Dashboards are Lacking When It Comes to Deming’s Profound Knowledge Philosophy
Edwards Deming’s Profound Knowledge talks about Systems Thinking, Statistical Thinking, Scientific Thinking, Applications of Psychology; however, our business management system and its scorecards are not aligned to this way of thinking. How does this impact your lean six sigma methodology?
As Deming clearly suggested, managers must understand variability. We need to have an executive metric reporting scorecard, dashboard reporting system that describes this variability so that appropriate actions occur. We’re not dealing with rocket science here. But is this new? Yes. I suggest that if the enterprise doesn’t change, very unhealthy behaviors that can lead to destructive firefighting, as we can observe in the economy today.
The systems of business management are not work and they must be reinvented! Metrics and the way we report them is a critical part of this reinvention or nothing will change.
The overused red-yellow-green scorecare can lead to significant detrimental behavior and expensive firefighting. Looking down from the 30,000-foot-level on red-yellow-green scorecards shows how nothing truly important may have changed although the colors toggle back and forth.
The primary role of traditional control charts is to identify when special cause conditions occur so that corrective action can be taken in a timely fashion. Using an individuals control chart (not an x-bar and R chart) it’s possible to create a 30,000-foot-level metric reporting that assesses whether a process is predictable and, if appropriate, make a prediction statement.
Even though there was much toggling between the colors no improvements were made because the 30,000-foot-level control chart did not move to a new level of stability. The probability plot (data considered a random sample of the future since there is a recent level of stability) predicts a red condition about 1/3 the events in the future. If this isn’t satisfactory when considered with all metric conditions a process improvement project would be created.
This situation is not unlike Edward Deming’s red bead experiment where people were getting praised or criticized based only on the color of a bead they had chosen at random. Isn’t this not unlike what is frequently happening in businesses today to you because of our metric system?
This system takes tools of the balanced scorecard and lean six sigma methodology to an enterprise management system.
Several 30,000-foot-level articles can be found in the “On-line Resource Library” link at www.SmarterSolutions.com.
The white paper, “Creation of Effective Organizational Predictive Metrics that Lead to the 3 Rs of Business” by Forrest W. Breyfogle, III describes on how to create 30,000-foot-level charts for various situations and much more. You can also visit www.ieeblackbelt.com for more information on lean six sigma methodology.
Red Bead Experiment Part 1
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