Lies, Damned Lies, and KPI – Part 2: Effects of Fudging

Business fraud
About the ills of number fudging

Modern manufacturing works with a lot of performance measures, often called key performance indicators (KPIs). Unfortunately, they are rarely accurate, and often even intentionally misleading. In my previous post I described some examples of commonly manipulated KPIs. In this post I would like to explain the ugly consequences of incorrect or manipulated KPIs. In a final post I will also show some ways that you can reduce this negative effect. But first, how do bad KPIs (and hence most KPIs) hurt your company?

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Lies, Damned Lies, and KPI – Part 1: Examples of Fudging

Upward Trend
Don’t get too excited about your numbers!

Statistical measurements, usually called key performance indicators (KPIs) are found on pretty much every shop floor and in every company. Many management decisions are made based on KPI. Unfortunately, these numbers often are not reliable at all.

Mark Twain popularized the phrase “Lies, damned lies, and statistics.” Winston Churchill famously said, “I only believe in statistics that I doctored myself.” Hence, both men were wary of trusting numbers. You should be too!

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Common Mistakes of Top Executives – A look at “Undercover Boss”

Undercover BossI occasionally watch the reality show Undercover Boss, where top executives work undercover in their own companies. Over and over again I see these managers making the same mistake: They have no understanding whatsoever of what is really happening on the front lines. It is a typical case of not going to the shop floor often enough, or in lean speak, no genchi genbutsu (Japanese for “go and see”).  So, <dramatic voice> Why do bosses all make the same mistake? Will they ever learn? Will you enjoy this post? See for yourself in the post below! </dramatic voice>.

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Eight Rules for Total Gridlock in the Organization (Video)

Prof. Dr. Peter Kruse
Prof. Dr. Peter Kruse

There is an excellent and highly sarcastic video around by Prof. Dr. Peter Kruse, professor of organizational psychology at the University of Bremen. In this, he describes his Eight Rules for Total Gridlock in the Organization (8 Regeln für den totalen Stillstand). Since these eight rules are quite relevant to the lean change process, I have transcribed, translated, and subtitled the German video for you into English.

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Visual Management during World War II – A Visit to the Lascaris War Rooms in Malta

Royal Air Force Operations in Malta, Gibraltar and the Mediterranean, 1939-1945.For larger improvement projects with a dedicated project team, there is frequently a “war room,” a conference room where all the project-related information and performance measures are kept. The name sounds cool and gives a certain air of focus to the project.

The name, however, comes from war rooms for real wars. Recently I had the chance to visit the Lascaris War Rooms in Malta, where I was able to see many tools and practices that are still common nowadays in manufacturing and project management.

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A Lean Obituary for Maybach – A Cautionary Tale About Cost of Complexity

$439,000 gift with every car purchased
$439,000 gift with every car purchased

With the end of last year, Daimler stopped selling its flagship vehicle, Maybach. I would like to use this opportunity to talk about the danger and harm to your company by increasing the number of product types sold. As an illustrative (and expensive) example, I would like to split the total cost of the Maybach in its individual parts (as far as I can estimate them).  My hope is that this motivates you to reduce, or at least no longer increase, the number of variants in your product portfolio.

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How to Manage Your Lean Projects – Prioritize

Impact Effort MatrixIn our first post of this series, we discussed how to avoid void work overload using a project management board. The key was to limit the number of active projects. Start a new project only when a previous one is completed. This second post now details which project to start next. Here I want to emphasize the importance of prioritization. I describe some simple tools on how to quickly determine the most important task at hand.

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