“Eliminate quotas on the factory floor.
Substitute leadership instead.”
- W. Edwards Deming
During my educational and professional life, I have been influenced by many people. In fact, my attitudes and philosophies about machinery lubrication, reliability engineering and business in general are really a compilation of the thoughts and works of others along with a little of my own creation weaved together into a framework. Peter Drucker and W. Edwards Deming have had the greatest influence on my views about general management and strategy. Their words and ideas are timeless and can be generalized across a wide span of organizations and pursuits. Recently, while revisiting Dr. Deming’s remarkable “14 Principles,” I saw a great deal of relevance to machinery maintenance and reliability, and in particular, to machinery lubrication. Therefore, I will discuss Deming’s 14 Principles within the context of this and future Viewpoint editorial columns.
In Principle No. 11, Deming tells us to “eliminate quotas on the factory floor” and to substitute quotas with leadership. I have observed an increase in the popularity and use of metrics, sometimes called key performance indicators (KPIs), to evaluate the performance of maintenance and reliability organizations. Some of these metrics are high-level in nature, such as return on net assets (RONA), maintenance costs as a percent of replacement asset value (RAV) and overall equipment effectiveness (OEE). Other, lower level metrics focus on conformance to proactive, predictive and preventive maintenance targets and/or schedules. In machinery lubrication, we monitor parameters like oil consumption ratio and percent of machines in caution and/or critical condition as measured with oil analysis or sonic/ultrasonic lubrication quality monitoring. I personally have conceived and advanced the overall lubrication effectiveness (OLE), which considers percent conformance to lube PM schedule, percent conformance to lube health and percent conformance to contamination targets.
Metrics, or KPIs, are wonderful management tools. When used properly, they help managers ensure that the organization’s performance is properly aligned with its mission and goals. Regrettably, when used improperly, managers become enslaved by the metrics. I have observed instances where managers “cook the books” to make the maintenance, condition monitoring or lubrication metrics look good. So what does it mean to cook the books? Most maintenance metrics are ratios, or the product of more than one ratio, that accumulate (or roll-up) performance of a machine, group of machines, people performance skills, financial return, etc. The metric can be “cooked” by selectively eliminating individual machines, or groups of machines, people or activities that would adversely affect performance on the metric (cooking the roll-up), misrepresenting the organization’s actual performance on the parameter (cooking the numerator) or setting low expectations that fail to represent the organization’s true goals (cooking the denominator). All scenarios result in misrepresentation of fact. When facts are misrepresented intentionally or knowingly, the employer’s trust and confidence in the employee is broken. Sometimes the employee’s actions are criminal. In most cases, they are simply unethical.
In most organizations, upper management holds lower-level managers, supervisors, engineers, technicians and craftspeople accountable for hitting their targets on KPIs and other metrics. In the right environment, this can help drive change. In the wrong environment, it can drive otherwise ethical employees to the point that they “cook the metrics.”
So who is to blame? If the folks in the plant simply don’t agree with the metrics or their managers’ priorities, and they cook the metrics in response, they are responsible and should be appropriately reprimanded. However, if management creates a pressure-cooker environment and requires absolute conformance to targets regardless of the situation or circumstance, they are in breech of Deming’s 11th Principle. By requiring strict conformance to performance metrics - no matter the circumstance - a manager is using measurement as a substitute for leadership. In these instances, the manager, and in many cases the entire organization, becomes enslaved by the metric. Sometimes managers intensify this situation by requiring conformance to performance on metrics without providing appropriate resources with which to achieve performance. This almost certainly results in disaster.
When used properly, measurement and metrics can be a powerful asset to managers who are determined to drive change and improvement and keep things on the right track. Let’s take a tip from Dr. Deming and avoid the situation where blind conformance to metrics and numbers enslaves us, and instead, replace it with good judgment and leadership. That is my Viewpoint. As always, I am interested in yours.