KPIs And The Hawthorne Effect – Part 2

By Rick Grantham | Uncategorized

Nov 10

In part one of this two part series we discussed the impact of the Hawthornekpis and the hawthorne effect2 Effect on KPI’s. (to view Part 1 of this series – clickhere)

 

So, what do you do from here?

 

Once a KPI misses its target (turns red) for several periods, engage the Process Improvement experts in your organization. Process Improvement professionals have different code-names in different organizations:

 

  • Quality Engineers
  • Process Engineers
  • Lean Manufacturing
  • Six Sigma
  • TQM

 

If these professionals don’t exist in your organization, then here are a few things to keep in mind as you tackle the metric.

 

Try the “5 Why?” Test to Determine a Possible Root-Cause

 

This is a quick management test that allows you to get deeper into why a metric is failing and can be done in a staff meeting. The test is simply you asking “Why?” five times to get to a deeper root-cause process that you can actually improve for the long term. A simplistic example is outlined below.

 

  • Why did we miss our attrition target?
    • Because we had a spike in temporary employees
  • Why did we have a spike in temporary employees?
    • Because we had a short term productivity spike
  • Why wasn’t the short term spike in the forecast?
    • Because the forecast is only updated quarterly
  • Why is the forecast only updated quarterly?
    • Because it is just the way we have always done business
  • Why have we always done business this way?
    • Because we have never experienced the type of seasonal growth that we are seeing with this product.

 

Although this a simplistic example, the answers move you away from having endless meetings to look at the top line attrition results, and moves you towards and underlying process (forecast updates) that can be modified to give more accurate results. Insist that your analysts go 4-5 levels deep.

 

Process Engineering

 

Ask yourself and your team: “How can we modify the process so that it is impossible for the process to fail?”

 

When is the last time you left the light on in your refrigerator? The process has been engineered so that it is impossible to fail. It doesn’t require weekly meetings.

 

When is the last time you started your car when it was already in ‘Drive’? The process has been engineered so that it is impossible to fail.

 

Most websites employ similar mechanisms to ensure it is impossible for you fail:

 

  • Credit Card numbers that won’t be accepted unless it matches the credit card type (Visa, AMEX, etc.)
  • Billing addresses that must match the Billing address on the credit card.
  • Postal codes that must match the correct State/Region

 

In Closing

 

Look for opportunities to alter the underlying process. This is the true reason that you have made your investments in Business Intelligence. There is organization altering power that can be harnessed with the information flowing out of your Business Intelligence environment. But that power will only be consistent over the long term when you begin to see KPI’s as the beginning of Business Intelligence, not the end.

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