Metrics for Management

One of the fundamental principles underlying the success of any Agile workplace is transparency. When something in the work process is “transparent”, it can be observed and measured, which allows us to gauge how efficient that part of the process is. A simple example would be a workflow in which a bolt has to be screwed into a threaded hole; the time it takes to retrieve a bolt and screw it into the hole could be measured, making that part of the process transparent.

Picture of a magnifying glass

The measures we use in Agile to provide transparency on work processes are collectively referred to as process metrics. Process metrics are great for Agile teams, because they allow the team to inspect and adapt their processes for the purpose of improving them. Unfortunately, making processes transparent also means exposing these metrics to the business’ management, which often has a highly undesirable side-effect: if the team members feel the data might be used to punish (or reward!) them, the metrics become unreliable.

There is a solution to this particular conundrum. In the excellent book The Four Disciplines of Execution, the authors argue that there are two types of indicators that provide insight into how the business is doing. Leading indicators are measures of things that are directly under the control of those doing the work; i.e., process metrics. Lagging indicators are measures of things beyond the control of the workforce, but which are indicative of the value or quality of what the workforce is making.  Examples of lagging indicators would include things such as sales volume, warranty returns, or customer satisfaction. If management leaves the inspection of leading indicators to those doing the work, and instead attends to lagging indicators, they will eliminate the manipulation of process metrics, while satisfying their need for data indicating the state of the business.

It is sorely tempting for managers to attend to leading indicators. After all, they provide data right now (as opposed to in the future, which is the case with lagging indicators), and they’re indicative of the process efficiency of the team. If you’re a manager of Agile teams, don’t fall into the leading-indicator trap. Being successful with Agile is fundamentally an issue of trust, in which the business operates under an implied social contract: the managers trust that the teams are continuously working to improve the speed of delivery, quality, and value of the end product, and that the teams will assume responsibility for the effectiveness of their members. The teams trust that the managers will provide the support the teams need to improve their processes and clear impediments, and to not use process metrics against them. Only by sticking to the terms of this contract can a business realize the true benefits of being Agile.