Ans to Q3 Exc Amb Arvindh.docx

Q. What is your view on this? Is measurement essential for good management? Why? Why Not?
A. I believe it is important to define a measurement for any product/process/operations which leads to definition of the CTQs/Metrics/Dashboards/Numbers. These numbers define the performance standards/specification limits and also helps in staying up in the competition.

 

Any level of measurement for a product/process/operations is good management. The reason being as follows:

1. These numbers become Voice of Customer and say that this is a level of quality that can be expected from a product/process/operations. The "Customer" here can be anyone inter-outer stakeholders, Customers, etc.
2. Their numbers define the Characteristics of product/process/operations. Eg. Mobile/Phone charging time
3. These numbers help to define Operational definitions and measurement of how and what needs to be quantified. Eg. Unit to measure the time from the start of charge and full charge capacity of the battery.
4. The target value of he product/process/operations and if there is no variance in the product or process that will be the value to be delivered. Eg. Mobile phone charges to 100% capacity in 20mins.
5. The numbers will also tell what is the defect rate that will be produced by a particular process Eg. 2.4 defects per million opportunities.

What did Edward W Deming mean by his statement?

 

I think what he is trying to say "The most important numbers are unknown and unknowable" is that choosing the right metrics for Practitioners is very challenging because the incorrect definition of measurement and the incorrect unit of measurement may lead to variation in the product and may create extra costs, rework, low productivity; drive the “wrong” decisions (because of outdated data); and prompt a sense of frustration or lack of trust.

 

From a project perspective, it could result in project delays and impairment of testing. Project teams need to assure that data associated with their designs is both accurate and complete.

Hence, his statement:

    "It is wrong to suppose that if you can't measure it, you can't manage it. The most important numbers are unknown and unknowable"

Dashboards, metrics,data,etc. form the basis of information which help in analysing the problems and hence resolve. 

 

Still, as dr. Deming stated the above mentioned, the unknown are meant to be explored even further and more deeper and balanced. Also, there should be no baised thoughts or views while resolving the unknown issues. 

It would be incorrect on our part to say that either of them is wrong or to have an opinion in favour of either of their thoughts. We would be biased in such case. Deming himself was a statistician who worked with data. However, he probably realised at some point in his life that data alone was not sufficient to take management decisions. Data does bring in objectivity into our decision making. They say data does not lie. It bring out the facts to the table. However, there is a subjective element in good decision making. If we made decisions based only on data then machines can also replace us. If everyone took decisions based only on data then outcomes also would be predictable. However, random events do occur and many times they occur by a rule of nature. For example, we talk of law of averages when a team wins a few matches on the trot and loses crucial matches in the knock out rounds. The subjectivity is about our personality, our risk taking ability, our emotional quotient. The captain of a team then takes a decision a based on his gut feeling and turns around the match. Such events are the outliers, which many times are not considered or ignored by the data scientists. 

 

Hence subjective element of the decision making  is equally important as the objectivity brought out by the data or the metrics. The outliers which are ignored may also sometimes play an important role. I feel this is what Deming would be suggesting while he made this statement. It is also opined that when the decision making is solely based on data then you are not encouraging people to take risk. Quantitative measurements will therefore keep you where you are and drive towards mediocrity. The qualitative elements may take you towards excellence. 

Quote #1 - "If you can't measure it, you can't manage it" - Peter Drucker. 

Quote #2 - "It is wrong to suppose that if you can't measure it, you can't manage it. The most important numbers are unknown and unknowable" - Dr. W. Edward Deming

Is measurement essential for good management? Why? Why Not?

Both the above quotes are correct in their own ways. However there are some activities that are measureable and some are not measurable, like when we are not able to measure the exact benefit of a happy customer but you can get measures that give you evidence of the value and even magnitude.

Measurement is the process of collecting, analyzing and reporting information regarding the performance of an individual, group, organization, system or component.

Measurement is essential in some areas wherein when we are able to get information / performance of the activities which are leading to some output. Whereas in some areas which are qualitative & measurements are not possible then we derive the performance by qualitative aspects

However I personally believe that by using measurement we can improve the current way of doing things and also have clearer way forward. With measurements decision making is easier in any organization, like when a child’s board exam results are declared, it gives the child clear indication to take up Science, Commerce or Arts because the board exam’s results are in numbers & measurable. Using data to aid in improvement efforts is extremely valuable. Everything is relative, Improvement needs to be seen in comparison.

  Quote

"If you can't measure it, you can't manage it" - Peter Drucker. 

 

  Quote

"It is wrong to suppose that if you can't measure it, you can't manage it. The most important numbers are unknown and unknowable" - Dr. W. Edward Deming

 

 

What is your view on this? Is measurement essential for good management? Why? Why Not?

What did Edward W Deming mean by his statement? 

 What I understand from the quotes above is success is measured/ compared against a  base line.Both quotes mean the same in its own way.

So the measurement is essential for a good management. As in a PDCA cycle you require the measurement  in/ as one or the other form to progress.

As per the  Dr. W.Edward Deming. If you are not able to measure it does not mean that it is  not  manageable. A systematic approach towards improvement will support to manage it for you.

In my opinion, measurement is very important in management and hence what Peter Drucker said is something undeniable.

At the same time, one cannot measure what is going to happen in future. This means we need to consider things that are not measurable or existing at present but could exist in future.

As how Newtonian Physics was replaced by Quantum Physics, changes always come and one as a person and also an organization needs to be capable and equipped to face the challenges in future.

Dr. Edward Deming meant that the future state that we want, could be sometimes beyond our imagination and prediction. Hence the numbers are unknown and unknowable.

We firmly believe that measurement is essential for good management as this helps management in executing the strategy and achieving the top & bottom line performance

 

Lets understand the terms in simple language.

 

Dashboards :  Dashboard in simple term can be explained as “ Eyes on performance” It is a glance report which  

 

•         Gives transparent view of Performance …

•          Helps in escalating abnormalities

•          Decision making @ working level …

•          Showcase Successes …

 

Numbers: There the figures which depicts performance when measured against target/AOP

 

Metrics: It is a standard of measurement by which efficiency & effectiveness of a process can be assessed. Metrics are calculated for both input (Lead) & Output (Lag KPI’s)

 

	Input KPI	Out KPI
Efficiency	Material	Volume
	Resource	Time
		Cost
Effectiveness		Quality
		Defects
Experience		Perception

 

CTQ’s: ”Critical to Quality are the key measurable characteristics of a product or process whose performance standards or specification limits must be met in order to satisfy the customer.”  ( as per Wikipedia)

 

Understanding above terms, Peter drucker has rightly said that if we cannot measure our performance, we will not able to manage the business.

 

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A shopkeeper who is managing a shop also keeps a record of all transaction and analyse basis the numbers recorded. Eg he plans to buy the products basis the quantity left in his shop. And how much quantity is left is known to him basis his records. Same is true for any company as till the time they do not measure their performance, company cannot grow.

However if all company have a measurement system, then all companies should flourish. But this does not happen.

 

Reason:

a)      There are processes, transaction, work system whose efficiency/ effectiveness cannot be measured therefore in absence of their measurement, the management oversees these process.

b.)    What needs to be measured has to be properly identified. Metrics to be measured should be identified by applying any of the below simple methodology

1)      Lead & Lag KPI’s ( basis efficiency, effectiveness & perceptions measurements)

2)      Translating VOC/VOB into process lead & Lag KPI’s

3)      KPI’s related to hidden cost

 

Quote

"It is wrong to suppose that if you can't measure it, you can't manage it. The most important numbers are unknown and unknowable" - Dr. W. Edward Deming

Edward, as by this statement, is trying to highlight the hidden factory of KPI which are not measured and may bear high cost for correction when identified.

Lets understand the complexity with an example.

A proper BPMS was rolled out in a company which will work as a process repository and from where key metrics dashboards can be downloaded. It was launched with proper branding and training was given to all the employees in batches. Processes were uploaded in the system and links were shared. Post 6 month of launch, process team decided to measure the performance as this was one of the KRA item. Therefore they started flashing the No of Users KPI. To increase the number, team used to keep the follow and asked each employee to login once. This helped in achieving the KPI of % users of BPMS tool. However when audit was done , it was found that there was deviation in the employees process knowledge & process uploaded in BPMS tool. This was because no one took the pain of visiting and reading the process uploaded rather continued with earlier word version which were shared with them prior to launch of BPMS. This was a KPI which was never measured the other KPI measured gave the target achievement.

CTQ and.docx