The document discusses the dark side of process measurement that can occur when measurements are not implemented properly. It provides an example of a grocery warehouse that focused only on productivity measures, which led to deteriorating service levels and falling behind competitors. A process improvement team was formed and discovered issues like fatigue causing inventory to become out of stock at higher rates than competitors. The document argues management needs to focus on root cause analysis and mission-level goals, rather than just functional metrics, to avoid unintended consequences of process measurement.

1. The Dark Side of Process
Measurement

2. Process Measurement
Measurements are based on facts in order to
replace decisions.

3. Dark Side of Metric
Reckless Cause & Effect Measurements can
be harmful.
Employee behavior changes must be with new
process measures.
Changes are essential for organzational
progress & improvement.

4. Chronic Inventory Adjustments
Logistics VP: focus on Productivity of grocery
warehouse. Apply new computer system to
obtain productivity measures.
2 yrs tenure, cases FTE improved
However, service levels(% of time shoppers
find an item in assigned slot) deteriorated.
Outcome: lagged the chain’s competitors.

5. Process Improvement Team
Goal: Look at process to improve service levels.
Members: Low ranking, auditors, office
managers, clerical workers, analysts.
Mapping: Alternate selecting process & restock
waves.

6. Measures
Picking list (quota of work to be done in fixed
time) count stock, enter data.
“M” for missing, deducted from invoice.
Restock waves: move overhead storage into
picking slots.
Cycle counts: ensure accurate due to
computerized inventory records never actuate
enough.

7. Outcome
Adjustments are evidence of chaos
It didn’t indicate the cause such as recording
theft or inventory shrinkage.
Diagram: Thursday & 8-9am have highest
missing rate.

8. Thanksgiving Jell-O
Attempt to keep up higher picking rate but fell
behind as fatigue set in.
Symbol of exhausting supply.
VP: speed up work standards
Store Manager: rush to shop in nearby
competitors.

9. Self-defeating Responses
Behavior in reaction to process measures
damage performance.
Omitted items push store managers to take
unconventional ways to satisfy customers but
violating financial control.
Higher Out-of-stock levels than competitors.

10. Cocoon of Silence
Avoid embarrassment/defensive reactions.
Actual improvement to correct poor measures.
Induce systematic improvement activities to
eliminate bad result.
Counterproductive Behaviors:
dark side of process measurement
Self-serving, narrow, non-systemic metrics:
self-defense eg. Logistic VP

11. Root causes of Dark Side
Management & Education fail to create
understanding process behavior analysis
(process tempering become rampant).
Insufficient understand the roles of Cause &
Effect analysis in process improvement.
Lack of a broad, mission oriented management
framework.

12. Root causes of Dark Side
Management performance assessments
overweigh functional & process level metrics
due to its objectiveness.
Underweigh mission level accomplishment.
Culture of blaming instead of find & process
improvement.

13. Avoid the Dark Side
1. Avoid/minimize process measures
2. Set up measures & let ppl try their best
3. Set up measures & learn process
improvement.
4. Set up planning, improving, & measuring as
a system to accomplish the organization’s
mission.

14. Avoid the Dark Side of PM
1. Keep discussions about process factual &
testable.
2. Turn deployment of new process measures
into opportunities.
3. Audit & edit measurement subsystem
regularly.
4. Stress mission level organizationwide in exe lv.
5. Avoid metric pitting function against function.