Agile Performance Indicators

Team empowerment is a key for agile team success. But misconception of empowerment and overconfidence sometimes lead teams to miss performance measurement and tracking. An empowered, accountable team must assess its performance and self-heal problems regardless its perfection and experience level.

At this point, referencing Hawthorne Effect may be useful to understand importance of performance assessment. According to Wikipedia:

"The term was coined in 1958 by Henry A. Landsberger when analyzing earlier experiments from 1924–32 at the Hawthorne Works (a Western Electric factory outside Chicago). The Hawthorne Works had commissioned a study to see if their workers would become more productive in higher or lower levels of light. The workers' productivity seemed to improve when changes were made, and slumped when the study ended. It was suggested that the productivity gain occurred as a result of the motivational effect on the workers of the interest being shown in them."

Hawthorne Effect thesis states, observation or consciousness of being observed changes behavior of individuals.

To sustain positive performance effect of assessment (observation), building correct and sustainable assessment procedures is an essential.

Retrospective meetings are very important agile activities for continuous team improvement and team health check. As the best practice, you are expected to set these meetings at the end of each iteration (minimum per 2 weeks). The main goal of these meetings is to get answers for these two simple questions:

• What did we do well?
• What should we have done better?

Supporting answers of these questions with some performance indicators makes arguments tangible and well grounded. Besides, checking these performance indicators regularly along with retrospectives would be a good practice to track your teams on the route. But here is a question:

"What indicators?"

The answer strongly depends on three factors: your company targets, maturity of your teams, your methodologies & practices. So, there is not any definite set of indicators. But general approach should be:

• Common company targets: "Your performance indicators should correspond with company targets"

Performance priorities supposed to be different for a new, small, super-fast growing start-up and for a 100-year-old super-fast car manufacturer.

• Team maturity: "Your performance indicators should be more quantitatively detailed for naiver teams"

As long as your team gains more experience, you will need less quantitive indicators. For example, answer of "How was our quality performance during the last iteration" question can be:

o  Qualitative-relative (We produced much better quality release.)

o  Quantitive-metric (We decreased our bug rate to 2%.)

Both of the answers are reasonable. But the first one is subjective and open ended. Ability to have a common opinion on this sentence requires established, deep-rooted values as a team. But "2% decreased bug rate" is straightforward for all stakeholders.

On the other hand, some indicators are qualitative by nature, such as "team spirit", "effective communication" and "proactive temper". Therefore, qualitative assessment will always be a part of your assessment process. Soft skills like empathy, fairness and self-awareness make difference at this point. A famous quote by Peter Drucker says,

You can't manage what you can't measure

But in reality, you need to change and extend the sentence like:

You would better measure to manage. But you have to manage what you can't measure as well.

• Supportive: "Your performance indicators shouldn't be inhibitors against your SDLC"

Do not be a control freak. Over complicated methods, pointless indicators (e.g. number of code lines or bug count) and too much detail may cause waste of time and confusion on the team.

Indicators should direct teams to the right direction corresponding with the methodology.

If you are running SCRUM, you would like to measure your time box strictness and planned/estimated effort rate. But for Kanban, average created value per day might be more useful as a quantitive indicator.

Continuously observation and assessment of team performance is a must for continuous improvement. Supporting assessment ideas by indicators is the best practice. But accurate balancing and choosing right qualitative and quantitive indicators according to varying conditions is critical. Assessment process and indicators should evolve coherently with company and team evolvement.

Next: Suggested Performance Indicators and Their Measurement for SCRUM & Kanban.