Simplicity and Alignment: The Keys to Effective Visual Management

Creating dashboards is one of the common starting points of a lean system and, when done well, will help make problems visible, communicate problem-solving opportunities and activities, improve meeting discussions, and provide a framework for coaching. In order to achieve these objectives, it is important to keep the dashboards simple and focused, but as is often the case, making something simple is not easy.

Through many years of practicing lean, I have come across numerous instances of teams that created very nice-looking dashboards that unfortunately amounted to little more than eye candy. Although there are many reasons for this, I have listed some of the more common issues below that interfere with making dashboards effective, along with some suggestions to overcome each. The definitions and a typical layout for a dashboard is presented at the end of this post.

1. Too Much Information: Dashboards should be focused on the most important targets the area needs to achieve to contribute to the higher-level organization objectives. Often this is in terms of safety, quality, delivery, cost, and people development (SQDCP), but it can be tailored to the area and operation’s specific needs. Doing this well often requires serious reflection and discussion to ensure the targets in each category truly support the achievement of the higher-level organization targets. The team should work to agree on a single target for each element – SQDC and P – as multiple targets creates confusion.

1. Lack of Alignment: Supporting the organization’s higher-level targets requires a clear connection between the area’s targets and the organization’s targets. A general rule for this is a sub-kpi for one area feeds the main kpi for the next level down (see diagram below for further explanation of main and sub-kpis). As an example, if a factory is missing its production target and the sub-kpi shows that the injection molding area is the main contributor of the gap. One should be able to go to the injection molding area and see from its main kpi that it is having trouble meeting its production commitments and, in its sub-kpi, where team is looking to understand and resolve the issue.
2. Not Actively Used: The dashboard should logically show the connection between a gap from the target, what is leading to the gap, and the activities that are addressing the problems leading to the gap. It should be very easy to see – e.g., within a few seconds – where the team is focusing its efforts and why. If not, it is likely that the charts are disconnected and the dashboard is not being used for identifying and solving problems. Another sign that the dashboard is not actively used is a set of metrics that are not within the direct control of the team. An example is an offshore oil platform that shows gross production as the main delivery kpi. Since the offshore team has no direct control over things like choke settings, and downhole and subsurface problems, there is likely little the team can do to address what could be the main issues, leading to frustration or charts that are not being used.
3. Charts that are Difficult to Maintain: The charts on a dashboard do not need to be colorful or fancy; they just need to tell the story about what is happening in the area. The more difficult a chart is to maintain, the less likely it will be maintained as needed. When thinking about the objectives of dashboards, it becomes clear that they need to be very simple and basic – even hand-drawn charts are okay if they make problems visible in a clear and simple way.
4. Delegating the Printing & Posting of Charts: It is unfortunately very common for those responsible for an area to delegate the printing and posting of charts. This practice often leads to distancing the leader from the information and compromises the ability of the dashboard to develop people to solve problems. A clear sign of this practice occurs during a daily or weekly standup meeting when the leader must read the charts to communicate activities.

A Word on Leading vs Lagging Metrics

I often read blog posts on dashboards that incorrectly caution against using lagging metrics because they measure what has already happened. Actually, a dashboard must include lagging metrics because what the area is trying to accomplish (e.g., production, quality levels, cost targets, etc.) can only be expressed in lagging metrics.

On a dashboard, a lagging metric is a measure of a result that has already occurred; while a leading metric is a measure of a plan or activities to address a problem in the lagging metric. There is no way to know if there is a problem or where it is occurring without a lagging metric. Also, measuring the success of improvement activities requires a lagging metric. For these reasons, an effective dashboard must include both lagging and leading metrics.

A Common Dashboard Layout

There is a standard layout for a dashboard that drives problem-solving activities and supports effective coaching. Much like structured problem-solving, a dashboard must include:

• Main KPI: Identifies a problem (gap between actual performance and the target);
• Sub-KPI: Breaks down the problem to provide direction regarding where the problem is occurring (often using a Pareto diagram);
• Countermeasures: The main causes of the biggest contributor and countermeasures to reduce or eliminate them;
• Countermeasure Status: How implementation of the countermeasures are going and whether they are effective or not in closing the gap.

Following the definitions above, the Main and Sub KPIs are lagging metrics and the Countermeasure Status is a leading metric.

Following a standard layout and continually coaching people to improve and use dashboards can help significantly improve performance while developing problem-solving skills and improving meeting effectiveness. Like any element of lean thinking, though, it requires continual improvement to become and remain effective.