Lean Litmus Test Question 2: Do You Know Where You Are?

This is the second of a series of questions I posted a few days ago that I use to get an initial read on a company that wants help with continuous improvement. While the questions don’t give a complete picture, they certainly help me determine which rocks to kick over, and where to pay special attention as I do a more thorough Lean Assessment. (See the previous question here.)

The second question is

Does the organization track progress on all its goals on a regular basis?

As with all the questions in this series, this is a yes or no query. The real information comes from the style of response and the follow-up questions. This question is powerful because it uncovers several aspects of an organization’s culture.

1. Does the company establish goals? Goal setting drives improvement. Extremely sophisticated Lean companies can make progress simply through having a culture where people relentlessly attack waste. But even those companies still set goals, though they tend to be more revolutionary in nature. For most companies, though, improvement goals on key metrics drive change. Another point that I look for here is whether goals appear arbitrary, of if there is a logic to them. Do all metrics have a 10% improvement target, or are they 5.9%, 6.8% and 12.3%? The more thought that is put into goal setting, the more likely a team is to meet it.
2. Does the company track progress? This is the obvious point of the question. Making goals is pointless if you don’t know how you are doing relative to those goals. One thing I do look for that is not so obvious is whether the tracking is systematic or ad hoc. If leaders don’t review progress monthly, it is an indicator that goals are probably not driving improvement.
3. Does the company use facts and data? One of the biggest barriers to tracking progress is not, as many people believe, an aversion to making the status visible. It is either the lack of knowledge about how to find the answers, or a lack of willingness to commit the resources to collecting data. Goals sound great in October or November during strategy development, but they mean that teams will spend time tracking information the whole next year. When time is at a premium, collecting information often goes to the wayside, and it can be tough to recreate data after the fact.
4. Does the company act on problems? Lean requires a bias for action. When a company identifies a problem, in this case that it is missing its targets, the way it reacts is telling. Do they seem OK with month after month of red (misses) on their tracking sheets, or is there evidence that they are taking actions to change things? Not that at this point, many companies might not have the tools to fix all their problems. What I look for is evidence that they have not given up trying.