The One Metric That Rules Them All.
There is only one metric that really matters so why is it the one that gets ignored?
Adopting Agile can be a highly bewildering experience. It challenges beliefs and mindsets we may have held for decades. It introduces a multitude of new concepts all of which need to be learned and mastered. But Agile promises to deliver so much, so we put our heads down and get on with it and wait to reap the rewards.
Because Agile is all about working in a different way. Human nature means that we strive for a means of measuring how far on the journey we are. Or how effective we are at each of the new practices. Welcome to the World of Agile metrics. Here is a non-exhaustive list of commonly employed Agile metrics;
- Burn down and Burn up charts: Shows progress during a sprint against commitment.
- Velocity/Capacity: how much work has been completed or can be expected to be done.
- Cycle Time: How long it takes to complete a piece of work.
- Lead Time: How long an item is on the backlog before work starts on it.
- Forecast Completion: How long to deliver an entire function or project.
- Error Rate: the number of bugs or other issues that need fixing.
- Test Coverage: The percentage of the code that is covered by automated tests.
- Size of backlog: How many sprints worth of work do we have ready.
- Points per person: how many story points each developer has delivered per sprint.
- % complete: How to close to 100% done is each item/function/project.
Therefore, the question usually becomes which of this myriad of metrics should I use to give the answers I need?
Or is it?
The problem with all the above metrics is that they miss the core of what Agile Transformation is trying to achieve. By concentrating on these metrics you move the focus back towards traditional ways of working. Where you manage the process.
The Core of Agile Transformation.
At its heart Agile is about shifting the focus from what you do, to why you do it. This means that you need to focus on the outcomes and impacts. Outcomes and Impacts are what happens in the real world once you have released your product. This is embodied by my favorite Principle from the Agile Manifesto (I know that they are like children and you should not have a favorite)
Maximize the amount of work that you DO NOT DO.
To be truly Agile you should work in a way that ensures you expend the minimal effort to generate the largest outcomes and impacts. All the commonly employed metrics relate to the work process. Although these have value within the team to help them improve, they offer no real value to the organization. If you concentrate on this type of metric, you are effectively managing the process as we did with traditional teams. Agile teams and organizations should concentrate on metrics relating to outcomes and impacts.
The Metric that Matters.
The metric that relates to Outcomes and Impacts is delivered value. Defining and measuring value is exceedingly difficult in practice. At first glance Value seems such a simple concept. Value is the amount of money that you make from your customers, simple. So then does the work you do related to performance, usability or bug fixes have no value? This type of work is often more valuable as it stops you losing existing customers and improves the perception of your organization for all your customers. Comparing value from revenue generating and non-revenue generating items is the challenge. And this challenge often proves difficult to solve. Consequently, it tends to get ignored in favor or more easily defined and measured metrics, such as those relating to process.
What is the point of delivering to time and budget if nobody wants what you have made?
Value is at the heart of Agile. Nearly every Agile framework includes prioritization of work based on value. In practice as this is so difficult, value gets used in name in only. Often organizations use perceived or arbitrary numbers to allow for prioritization by ‘Value’.
Value in the Agile world has two aspects. Each are equally important and when combined are even more powerful. One of these aspects has already been discussed. The value associated with the outcomes and impacts delivered to the end customer. The other aspect is concerned with how much value you consume to generate and operate those outcomes and impacts. The core of any business whether working with Agile or not is the same. Am I making more money than I am spending?
The Metric to Rule Them All.
Value out > Value In
In reality the value out should be multiples of the value in. This simple metric gets to the core of what Agile is about. Ensuring that you are always working on the items that generate the most value. By embracing this metric you will also stop working on items that will never recoup their needed investment.
By not tackling the value challenge you are NOT being Agile. The Deming cycle (Plan, Do, Check, Act) forms the basis of Agile working.
- Define the expected value at the start setting your expectations.
- Build the solution only if it costs less than the expected value to be returned.
- Release to the customers and measure the actual value returned.
- Assess the reality against the expectations and adjust your course of action as needed.
The quicker you can get round this cycle the better. The result is a long-term viable business. This is what True Agility delivers.
By ignoring this metric in favor of those focused on the process. You are still following the Deeming cycle but only internally. Including the Customer in this loop is the key to True Agility and should not be ignored. You may get significant improvements in throughput, quality and develop a better working environment.
Developing the most efficient delivery team ever within a non-viable business should never be considered as success.
Teams are only effective if they deliver what the customer wants and this delivers value to the organization.
By building a delivery organization that does not have Value at its heart will never deliver on the expectations of Agile. Value is hard, but then adopting Agile is also hard. You need to put the work in to resolve the hard issues. If need to be transparent if you chose not to tackle this or any of the other hard things in Agile. Be honest with yourself and the organization you are working in by understanding and communicating the outcomes and impacts of your decisions.
You only achieve True Agility when you understand the why behind the frameworks and the implications of your actions or omissions.