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April 6, 2018

Metrics Matter - An Introduction to a series on Measurements in an Agile world.

This will be a series of posts on metrics, KPI's and measurements as they relate to agile concepts, teams, organisations, etc.
I started on these posts some time ago after numerous discussions with several of my clients on the topic. My initial post started to become really long and after I discussed some of the concepts with peers at the Lean Startup Summit Amsterdam 2018 I decided to have several posts on the topic of metrics, starting with measuring agile teams.

Before I dive into the topic of metrics and agile teams I want to highlight a couple of observations related to this.

First of all is the notion of agile transformations. In the last decade there have been a number of large organisations that made the transition from a traditional hierarchic organisations embracing a risk averse policy when it came to business development towards a more innovative and iterative stance where experimentation and feedback cycles were employed to limit risk. Companies like ING Bank, G.E., Intuit and several more are well known and well documented. One of the most heard reasons for doing this transformation relates to an ever faster changing environment in which these organisations operate. In many occasion I have heard that the democratization of IT infrastructure like the cloud has been a key player in setting the urgency to transform for these organisations. Where as in the past competitors faced the same problems as these organisations sharing the same risks, new players in an ever more crowded market (any market) have adopted a new model of operation in which these challenges and risks are no longer a factor.

New and foremost nimble organisations commonly referred to as startups have surfaced and without the lack of legacy both in investments as well as organisation and culture are more capable of addressing the market's needs than their large(r) counterparts. Often the Chinese proverb 'death by a thousand cuts' is used when referring to large corporations loosing market share to small companies.
The realisation that the new kids on the block are formidable and sometimes fierce competitors, plays a key role in these 'agile transformations'. This all happens in a market that is more and more addressed by regulators. Not so much to control and protect national investments, but to open up internationally allowing foreign players into domestic markets and to support competition.
What I see happening all around me with clients of every size is the realisation that without innovation, business fear for their sustainability. An important but often missing realisation is that the lack of innovation in an organisation is the result of a rigorous focus on costs instead of value. The larger the company, the more focus on efficiency in the past. I have written about this before, read the post [Perish or Survive, or being Efficient vs being Effective] for example.

What I see happening a lot is that organisations are trying to redefine their focus but maintaining their means of measurement, i.e. the metrics used to validate the organisation's progress are left unchanged while transforming the organisation from one that's efficient into one that's effective. Or in different terminology: The Agile Transformation.

Caveat emptor: Unless your objective is to become more effective and are willing to move your drive for efficiency to the background, an agile transformation is a lost cause and a waste of resources.

Assuming you're doing an agile transformation for all the right reasons, you will get to a point where you'll realise that you will need to change your KPI's and more importantly, you will need a set of metrics that allows you to validate the effectiveness of your transformation.
Just a little terminology definition is warranted here. I know the theory behind metrics, KPI's, measurements, lagging and leading, etc. But I am maintaining a rather simplified view on things:
  • KPI's, Key Performance Indicators, are typically found in reports. 'Past perfect tense' is their use and they indicate whether or not you've reached your goal.
  • Metrics are typically found on dashboards. 'Future time' is their use and they indicate whether or not you're on the right track or are in need of a change.
Forget about all the other theory around KPI's and metrics and all. To understand these posts, this is all you need to know. In all fairness, I think KPI's are something of the past when we are talking about agile transformations. Well at least when it were up to me. And this is not because KPI is an acronym but because I think the better measurement would be the KVI, the Key Value Indicator. The difference is that instead of performance we measure value. We're not measuring how efficient we are, but how effective we are instead. Cost vs. Value.
So I'll also talk about KVI's instead of KPI's in this and the following posts. It is also more in line with autonomy, self-steering teams and the more recently hipster term OKR's (Objective and Key Result) which will be addressed in one of the posts in this series as well. And in particular why you should be very careful with applying them in your organisation.

In this series of posts I will cover the following high-level topics:

  • Measuring Agile Team performance. In this post I will also address the challenge of maintaining the integrity of the Team-accountability while looking at individuals as well as teams when measuring performance.
  • Agile Maturity. This post will cover the aspects of maturity scans, their value and why you shouldn't care.
  • Agility Metrics. A post that will address how to implement metrics that measure your agility. Especially valuable when in the midst of an agile transformation.
  • Business value and Metric Harmonisation. An important aspect of keeping stock of your KPI's (and KVI's) is making sure that between teams they are not conflicting.
  • Visualisation and Dashboarding. I'll explain why there is no single one dashboard. Why visualisation is extremely important when using metrics and how dashboard, metrics and proper visualisation ensure a lack of surprises in your KPI's. Which will highlight the necessity of using KVI's instead.
So that's at least 5 more posts on the topic for you. Depending on the time I have to spare in the coming period, you'll be able to find the posts sooner or later. Please keep in mind that I will most likely post some articles on other topics as well. I'm dying to shed some light on the challenge of BizDevOps in large organisations. The real challenge I mean.


Thanks once again for reading my blog. Please don't be reluctant to Tweet about it, put a link on Facebook or recommend this blog to your network on LinkedIn. Heck, send the link of my blog to all your Whatsapp friends and everybody in your contact-list. But if you really want to show your appreciation, drop a comment with your opinion on the topic, your experiences or anything else that is relevant.

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The text very explicitly communicates my own personal views, experiences and practices. Any similarities with the views, experiences and practices of any of my previous or current clients, customers or employers are strictly coincidental. This post is therefore my own, and I am the sole author of it and am the sole copyright holder of it.

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