What are the key metrics to measure the success of your lean finance initiatives?

1 Customer satisfaction

One of the main goals of lean finance is to create value for your customers, whether they are internal or external. Customer satisfaction is a measure of how well you meet or exceed your customers' expectations and needs. You can use surveys, feedback, ratings, or reviews to assess your customer satisfaction levels. Customer satisfaction can help you identify areas of improvement, enhance your reputation, and increase your retention and loyalty.

2 Cycle time

Cycle time is the time it takes to complete a process or a task, from start to finish. Cycle time is a measure of your operational efficiency and productivity. You can use tools like value stream mapping, process mapping, or flowcharts to analyze your cycle time and identify bottlenecks, delays, or waste. Cycle time can help you reduce your costs, improve your quality, and deliver faster and more reliable results.

3 Value-added ratio

Value-added ratio is the percentage of time spent on activities that add value to your customers or stakeholders, compared to the total time spent on all activities. Value-added activities are those that transform or improve your inputs, outputs, or outcomes. Non-value-added activities are those that consume resources but do not add value, such as rework, errors, waiting, or overproduction. Value-added ratio is a measure of your value creation and waste elimination. You can use tools like activity-based costing, lean accounting, or kaizen to calculate and improve your value-added ratio. Value-added ratio can help you increase your margins, optimize your resources, and align your activities with your value proposition.

4 Employee engagement

Employee engagement is the degree of commitment, involvement, and satisfaction that your employees have with their work and your organization. Employee engagement is a measure of your organizational culture and performance. You can use surveys, interviews, observations, or performance reviews to assess your employee engagement levels. Employee engagement can help you retain and motivate your talent, foster innovation and collaboration, and enhance your customer service and quality.

5 Financial performance

Financial performance is the result of your financial activities and decisions, expressed in financial terms. Financial performance is a measure of your profitability, liquidity, solvency, and growth. You can use financial statements, ratios, indicators, or benchmarks to evaluate your financial performance and compare it with your goals or industry standards. Financial performance can help you monitor and improve your cash flow, revenue, expenses, assets, liabilities, and equity.

6 Continuous improvement

Continuous improvement is the ongoing process of identifying and implementing changes that enhance your value, efficiency, quality, and customer satisfaction. Continuous improvement is a measure of your learning and adaptation capabilities. You can use tools like PDCA (Plan-Do-Check-Act), DMAIC (Define-Measure-Analyze-Improve-Control), or A3 (a problem-solving method) to facilitate and document your continuous improvement efforts. Continuous improvement can help you stay competitive, agile, and responsive to changing needs and opportunities.