We mapped our process and we’ve found waste everywhere, maybe we even have some ideas about what to do about it. Now we need to decide how we will know if we're improving and that lies in measuring the right things.
Organizations are often drowning in data but starving for insight. They measure everything—and understand nothing: metrics, metrics, everywhere, but not a drop to drink.
The problem isn't with measurement itself—it's measuring things that don't connect to customer value or business results. Worse, tracking the wrong metrics drives the wrong behaviors.
Consider the (probably) apocryphal story of the Soviet nail factory, measures become targets, and when the number of nails is measured, the factory output millions of tiny, but useless nails. When the measure was switched to the weight of nails, the workers made one giant, but useless nail. The metric drove the behavior—but neither met the customer need.
We need to understand the four categories of measurement. Each category can tell you something different about your process: