Measure Transformation, Not Conformation
The core of agile isn’t conforming to some framework but the ability to adapt, respond, and deliver value efficiently. Hence, when measuring agile transformation, focus on the newly developed capabilities of your organization. What can it achieve now that it couldn’t before?
When the Means Obscures the End
Agile transformation within organizations often goes with many metrics, that aim to track progress and predictability. The hypothesis is that agile working gives better business outcomes. To test that you can measure the business objectives and how ‘good your teams are doing agile’. However, a focus on ‘how good your teams are doing agile’ metrics might lead you away from the real goals and result in Spread-Sheet-Agile-Adoption which should be avoided (see my previous post). Agile is a means to an end, not the end itself.
The Simplicity Of Measuring Success
A conversation with a banking CEO highlighted that existing product metrics should suffice to measure transformation results. The underlying hypothesis is that if agile methods are effective, they should reflect positively on business outcomes. But, your organization already has measures for business outcomes. So, there is really no need to introduce additional measures to determine the success of your agile adoption.
How To Measure Capabilities?
Agile working varies across companies, but it generally develops certain organizational capabilities. Discovering which capabilities you need to keep and which ones you need to develop is a key step in Agile Organization Design (see my previous posts).
Anyways, let’s assume that you want to develop the following capabilities in your agile transformation:
Flexible Resource Allocation Capability
The ability to redistribute resources and change the direction of teams swiftly in response to changing priorities.
Responsive Decision-Making Capability
The ability to make quick informed decisions, thereby reducing the lead time from ideation to execution.
Customer-Centric Product Development Capability
An approach that prioritizes customer feedback and needs, allowing for rapid product iteration.
To track progress, you can work with the involved managers and teams to create metrics that reflect these capabilities. For example:
Flexible Resource Allocation Capability
- Alignment Score: A self-assessed measure where teams rate how aligned they feel their work is with product strategic objectives.
- Priority Completion Rate: Measures the percentage of high-priority PBIs that are completed successfully.
Responsive Decision-Making Capability
- Time to Decision: Track the average time taken from when a decision point is identified to when the decision is made. This metric is a direct reflection of the decision-making speed.
- Decision Quality: Survey stakeholders to assess their satisfaction with the decisions made. Are the decisions leading to positive outcomes?
Customer-Centric Product Development
- Time to Market: Measures the speed at which new products or features are developed and launched to customers.
- Rate of Customer Feedback Incorporation: The percentage of product features or improvements that originated from customer feedback.
A word of caution: refrain from overburdening your teams with the collection of transformation metrics.