Driving the wrong KPI – An efficient way to the inefficiency

I was hearing a story for few days now. No, this is not about the end of the world. This is about how a lean movement has created unnecessary issues in an organization. This particular organization, like most of the organizations opting in for lean, had high hopes about its lean movement. They have started implementing lean years back, and have seen some improvements to their processes. They have formed a central team which will be driving lean initiatives across its facilities. This central team will form the strategy and the local teams in each of the sub units will be implementing lean in their respective areas. Sounds great, isn’t it?

But there was a problem. They were not getting the results they wanted. People started their own “lean” movements within sub units. Now each sub unit is performing in their own way. Although sub units themselves may gain some advantage by doing this, for an outside observer, it is clear that organization was losing in totality. Sub units are not working in unison to solve the bigger issues now. But they focus only on their small area to make it efficient. Processes are getting sub optimized.
Why is this happening? Well, there might be more than one reason. But one very important reason is the way lean is implemented and driven. Each organization sub unit is made to compete against each other. Instead of coming up with a better solution in totality, each organizational element is unconsciously encouraged to do better than other, even if that meant a negative outcome at the organizational level. Each sub unit now wants to do better than other. So they stopped sharing their methods with the others. They create their own systems, which becomes unmanageable over a period of time. Even the so called best “Lean” plant may not be doing good in the big picture.

What is the take away from this story? Well you have to think critically about what you are driving through your lean initiatives. You will have to define your goals and then start thinking about methods of driving lean, especially in the case of a mature organization. Bigger the organization is, difficult it becomes to achieve the set objectives. But if managed properly and driven with a good vision and control, lean can benefit the organization in totality. If you do not drive the correct KPIs, you will be very efficient, in creating inefficiencies.

One thought on “Driving the wrong KPI – An efficient way to the inefficiency”

  1. Sub groups are created by competition and division. This is just another reason to abolish the individual review system. Work as a team be rated as a team. One team one goal is much more effective than 100 individual goals. Get rid of merit systems and individual goals KPI’s will be much clearer to everyone.


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