I occasionally get asked what continuous improvement KPI people should be using.
It’s an interesting question to ask, on the basis that there is one answer to the question.
Multiple continuous improvement KPIs
When you start thinking about the indicators that can tell you how you are doing, several come to mind:
- Productivity
- Savings
- Number of projects completed
- Equipment utilisation
- Staff turnover
- Right first time
- Profit margin
Like the dashboard in your car, just looking for one metric to gauge your continuous improvement efforts can give you a wonky view of the world.
But, what if there was just one?
If I was challenged on this issue, I’d have to ask myself what’s the point of the single metric?
This is a key question for any function. What is the purpose you are trying to measure. Which one metric gets closest to the essence of what you are trying to achieve?
When I’ve been asked this in the past, most things boil down to finances. When we look at making improvements to an organisation we need to weigh up the tangible and the intangible. Tangible savings are the ones you can measure and, ultimately, that is what everything should lead to.
And, the logical extension is that this leads to money as being the one true indicator.
Money as a continuous improvement KPI
The money saved, and generated through opportunity, is probably the ultimate metric for working out how effective your change process is.
If this was me, left with this single metric, I’d tie it together with the Kaizen approach and ensure that I was engaging my teams to make small improvements at first to get them focusing on the right things and then looking occasionally at the scoreboard. The metric would then be secondary to focusing on interesting, engaging, change activity.
Plus, I would hope that the organisation would have a profit share scheme, so that their improved performance could be recognised financially. Not an ad-hoc bonus scheme, one related to performance.
So, if you have ever wondered if there is such a thing as a singular continuous improvement KPI, I hope this article has given you some food for thought!
I still have a preference for a proper suite of KPIs but I thought I’d give this perennial question a go.
When you come to choosing your continuous improvement KPIs, try and get the balance right, so you don’t crush the souls of the people trying to make things better…
