Lateness As an Universal Feedback Signal
Customers love dependable suppliers. The source of dependability is stable processes, because only stable processes can fulfill customer needs all the time. Dependability means, to keep your promises. And keeping promises means, never be late.
If your supplier or your manufacturing is late it becomes difficult to keep your promises for your customers. If your invoicing is late, it is difficult to keep your shareholders’ promises. If your month-end closing is late, your decision making is not easy. If your orders come in late it is difficult to make your budget.
This is why we use lateness as the universal feedback signal in all processes.
What Gets Measured Gets Done
Additional principles come from behavioral sciences: “Never change a running system” and “what gets measured gets done”. Let your organization work as long as it fulfills the promises. Only if it fails, the responsible team manager should be alarmed immediately providing him or her a list of problems. With this information, problem solving can start immediately.
Strategic vs. Operational Feedback Loops
On strategic level, many companies implemented such a feedback loop with a monthly cycle, where budgets are compared with actuals and necessary actions are taken. Operations, on the other hand, needs much faster, usually daily, feedback loops to run stable processes.
Summarized, the two level feedback loops are just like the cruise control in a car stabilizing the speed and the driver selecting the route and avoiding accidents.