{"id":852,"date":"2011-06-18T12:33:18","date_gmt":"2011-06-18T12:33:18","guid":{"rendered":"http:\/\/www.saasoft.com\/blog\/?p=852"},"modified":"2011-06-18T12:33:18","modified_gmt":"2011-06-18T12:33:18","slug":"the-crime-of-metric-abuse","status":"publish","type":"post","link":"https:\/\/hcse.blog\/?p=852","title":{"rendered":"The Crime of Metric Abuse"},"content":{"rendered":"

<\/a><\/p>\n

\"\"<\/a>We live in a world that is increasingly intolerant of errors – we want everything\u00a0to be right all the time – and if it is not then\u00a0someone must\u00a0have erred with deliberate intent so\u00a0they need to be\u00a0named, blamed\u00a0and shamed!\u00a0We set safety standards and tough targets; we measure and check; and we expose and\u00a0correct anyone who\u00a0is non-conformant.\u00a0We accept that is the\u00a0price we must pay for\u00a0a Perfect World … Yes? Unfortunately the answer is\u00a0No. We are deluded. We are\u00a0all<\/strong>\u00a0habitual criminals. We are all guilty of committing a crime against humanity\u00a0– the Crime of Metric Abuse<\/strong>. And we are blissfully ignorant of it so it comes as a big shock when we learn the reality of our unconscious complicity.<\/p>\n

You might want\u00a0to sit down for the next bit.<\/p>\n

First we need to set the scene:
\n1. Sustained improvement requires\u00a0actions that result in\u00a0irreversible\u00a0and beneficial changes to the structure and function of the system.
\n2. These actions require making wise decisions\u00a0– effective decisions.
\n3. These actions require\u00a0using resources well\u00a0– efficient\u00a0processes.
\n4. Making wise\u00a0decisions requires that we use our system metrics\u00a0correctly.
\n5. Understanding what\u00a0correct use<\/em> is means recognising\u00a0incorrect use<\/em> – abuse awareness.<\/p>\n

When we\u00a0commit the Crime of Metric Abuse,\u00a0even unconsciously, we make\u00a0poor decisions.\u00a0If we\u00a0act on those decisions we get an outcome that we do not intend and do not want – we make an\u00a0error.\u00a0 Unfortunately,\u00a0more efficiency does not compensate for less\u00a0effectiveness – if fact it makes it worse. Efficiency amplifies Effectiveness\u00a0– “Doing the wrong thing right makes it wronger not righter<\/em>” as Russell Ackoff\u00a0succinctly puts it.\u00a0 Paradoxically our inefficient and\u00a0bureaucratic systems may be\u00a0our only defence against our ineffective and potentially dangerous decision making – so before we strip out the bureaucracy and\u00a0strive\u00a0for efficiency we had better be sure we are making effective decisions and that\u00a0means exposing\u00a0and treating our nasty habit for\u00a0Metric Abuse.<\/p>\n

Metric Abuse manifests\u00a0in many forms – and there are two that when combined create a\u00a0particularly virulent addiction – Abuse of Ratios and\u00a0Abuse of Targets.\u00a0First let us talk about\u00a0the Abuse\u00a0of Ratios<\/strong>.<\/p>\n

A ratio is one number divided by another – which sounds innocent\u00a0enough – and ratios\u00a0are very useful\u00a0so what is the danger? The danger is that by combining two numbers to create one we throw away some information<\/em>.\u00a0This is not a good idea when making the best\u00a0possible decision\u00a0means squeezing every last drop of understanding our of our information.\u00a0To unconsciously\u00a0throw away useful information\u00a0amounts to\u00a0incompetence; to consciously throw away useful information is negligence because we could and should\u00a0know better.<\/p>\n

\"\"<\/a>Here is a\u00a0time-series chart of a process metric presented as a ratio. This is productivity – the ratio of\u00a0an output to an input – and it shows that our productivity is stable over time.\u00a0 We started OK and we\u00a0finished OK and we congratulate\u00a0ourselves\u00a0for our\u00a0good management\u00a0– yes? Well, maybe and maybe not.\u00a0 Suppose we are measuring the\u00a0Quality of the output\u00a0and the Cost of the input;\u00a0then calculating our Value-For-Money productivity from the ratio; and then only share this derived metric.\u00a0What if quality and cost are changing over time in the same direction and by the same <\/em>rate? The productivity ratio will not change.<\/p>\n

\u00a0<\/p>\n

\"\"<\/a>Suppose\u00a0the\u00a0raw data we used to calculate our ratio was as shown in the two\u00a0charts\u00a0of measured Ouput Quality and measured Input Cost\u00a0\u00a0– we can see immediately that, although our ratio is telling us everything is stable, our system is actually changing over time – it is unstable and therefore it is unpredictable. Systems that are unstable have a nasty habit of\u00a0finding\u00a0barriers to further change\u00a0and when they do they have a habit of crashing, suddenly,\u00a0unpredictably and spectacularly. If you take your eyes of the white line\u00a0when driving\u00a0and\u00a0drift off course\u00a0you may suddenly discover\u00a0a barrier\u00a0– the crash barrier for example, or worse still\u00a0an on-coming vehicle! The\u00a0apparent stability indicated by a ratio is an illusion\u00a0or rather a delusion<\/strong>. We delude ourselves that we are OK – in reality we may be on a collision course with catastrophe.\u00a0<\/p>\n

\"\"<\/a>But increasing quality is what we want surely? Yes – it is\u00a0what we want – but at what cost? If we use the strategy of quality-by-inspection<\/em> and add extra\u00a0checking to\u00a0detect errors and extra capacity to fix the errors\u00a0we\u00a0find then we will incur higher costs. This is\u00a0the story that\u00a0these Quality and Cost\u00a0charts are showing.\u00a0 To stay in business the extra\u00a0cost must be passed on to\u00a0our customers in the price we charge:\u00a0and we have all been brainwashed from birth to expect to pay more for\u00a0better quality.\u00a0But what happens when the rising price\u00a0hits our customers finanical constraint?\u00a0 We are no longer\u00a0able to afford the better quality so we settle for\u00a0the lower quality\u00a0but affordable alternative.\u00a0 What happens then to the company that has invested in\u00a0quality by inspection? It loses customers which means it loses\u00a0revenue which is bad for its financial health – and to\u00a0survive it starts cutting prices, cutting corners, cutting costs, cutting staff\u00a0and eventually – cutting\u00a0its own throat! The delusional productivity ratio has hidden the real problem until a\u00a0sudden and unpredictable drop in revenue and profit provides\u00a0a reality check – by which time it is too late. Of course if all our competitors are committing the same crime of metric abuse and suffering from the same delusion\u00a0we may survive a bit longer in the\u00a0toxic mediocrity swamp –\u00a0but if\u00a0a new competitor who is not deluded by ratios and who\u00a0learns how to\u00a0provide consistently higher quality at\u00a0a consistently lower price\u00a0– then we are in big trouble: our\u00a0customers leave\u00a0and our\u00a0end is swift and without mercy. Competition cannot\u00a0bring\u00a0controlled improvement while\u00a0the Abuse of Ratios\u00a0remains\u00a0rife and unchallenged.<\/p>\n

Now let us talk about\u00a0the second Metric Abuse, the Abuse of Targets<\/strong>.<\/p>\n

The blue line on the Productivity chart is the Target Productivity.\u00a0As leaders and managers we\u00a0have bee\u00a0brainwashed with the mantra that\u00a0“you get what you measure<\/em>”\u00a0and with this belief\u00a0we\u00a0commit the crime of Target Abuse when we set an arbitrary\u00a0target and use it to decide when to reward and when to\u00a0punish. We compound our second crime when we\u00a0connect our arbitrary target to our accounting\u00a0clock\u00a0and\u00a0post periodic praise when we are above target\u00a0and periodic pain\u00a0when we are\u00a0below. We magnify the crime\u00a0if we\u00a0have a\u00a0quality-by-inspection strategy because we create\u00a0an internal quality-cost tradeoff\u00a0that generates conflict between our governance goal and our finance goal: the result is a festering and acrimonious\u00a0stalemate. Our quality-by-inspection strategy\u00a0paradoxically prevents\u00a0improvement in productivity and we learn to accept the inevitable\u00a0oscillation\u00a0between good and bad and eventually may even convince ourselves that this is the\u00a0best and the only way.\u00a0 With this life-limiting-belief deeply embedded in our collective unconsciousness, the more enthusiastically this quality-by-inspection design\u00a0is enforced the more fear, frustration and failures it generates – until trust is eroded to the point that when the system hits\u00a0a problem –\u00a0morale collapses, errors increase, checks are overwhelmed, rework\u00a0capacity is swamped, quality slumps and\u00a0costs escalate. Productivity nose-dives and both customers and staff jump\u00a0into the lifeboats\u00a0to avoid going down with the ship!\u00a0\u00a0<\/p>\n

The use of delusional ratios and arbitrary targets (DRATs)\u00a0is a dangerous and\u00a0addictive behaviour\u00a0and should be made a criminal offense\u00a0punishable by Law because it is both destructive\u00a0and\u00a0unnecessary.<\/p>\n

With painful awareness of the problem\u00a0a path to a solution starts to form:<\/p>\n

1.\u00a0S<\/a><\/a><\/a><\/a>hare the numerator, the denominator and\u00a0the ratio data as time series charts.
\n2.\u00a0Only put requirement specifications on the\u00a0numerator and denominator charts.
\n3. Outlaw quality-by-inspection and replace with quality-by-design-and-improvement.\u00a0\u00a0<\/p>\n

Metric Abuse is a Crime. DRATs\u00a0are a\u00a0dangerous addiction. DRATs kill\u00a0Motivation.\u00a0DRATs Kill Organisations.<\/p>\n

Charts created using BaseLine<\/a><\/p>\n","protected":false},"excerpt":{"rendered":"

We live in a world that is increasingly intolerant of errors – we want everything\u00a0to be right all the time – and if it is not then\u00a0someone must\u00a0have erred with deliberate intent so\u00a0they need to be\u00a0named, blamed\u00a0and shamed!\u00a0We set safety standards and tough targets; we measure and check; and we expose and\u00a0correct anyone who\u00a0is non-conformant.\u00a0We … <\/p>\n

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