We are surprised at how often we go into a client and find that management does not have any metrics for their teams. The managers respond that they don’t want to negatively affect the team’s autonomy or that they trust the team to do the right things. While trusting your teams is a good thing, how do you know what they are doing is right for the company? How can you compare one team to another? How do you know where to focus on improvements?
Recently, we wrote an article about team autonomy, discussing how an empowered team is autonomous within a set of constraints. The article creates an analogy to driving a car, with the driver required to reach a specific destination, but empowered to determine WHAT path to take and WHY she takes it. She has gauges, such as a speedometer to give feedback on whether she is going too fast or too slow. Imagine driving a car without a speedometer. You will never know if you are sticking to the standard (the speed limit) or when you will get to where you need to go (velocity).
As a manager, it is your responsibility to set the appropriate metrics to help your teams navigate through the path to building your product. How can you hold your teams to certain goals or standards if you can’t tell them where they are in relation to the goal or standard today? How do you know if the actions you are taking are creating or improving shareholder value?
What metrics do you set for your teams? It is an important question. Years ago, while working at a Big 6 consulting firm, I had the pleasure of working with a very astute senior manager. We were redesigning manufacturing floors into what became Lean Manufacturing. He would walk into a client and ask them what the key metrics were. He would then proceed to tell them what their key issues were. He was always right. With metrics, you get what you measure. If you align the correct metrics with key company goals, then all is great. If you misalign them, you end up with poor performance and questionable behaviors.
So, what are the right metrics for a technology team? In 2017, we published an article on what we believe are the engineering metrics by which you should measure your teams. Some of the common metrics we focused on were velocity, efficiency, and cost. At initial glance, you might think that these seem “big brother-ish.” But, in reality, these metrics will provide your engineering teams with critical feedback to how they are doing. Velocity helps a team identify structural defects within the team (and should not be used to compare against other teams or push them to get more done). Efficiency helps the teams identify where they are losing precious development time to less valuable activities, such as meetings, interviews and HR training. It helps them and their managers quantify the impact of non-development and reduce such activities.
Cost helps the team identify how much they are spending on technology. We have seen this metric particularly used effectively in companies deploying to the cloud. Many companies allow cloud spending to significantly and uncontrollably increase as they grow. Looking at costs exposes things like the need for autoscaling to reduce the number of instances required during off peak times, or to purge unused instances that should be shut down.
The key to avoiding metrics from being perceived as overbearing is to keep them transparent. The teams must understand the purpose of the metric and how it is calculated. Don’t use them punitively. Use them to help the teams understand how they are doing in relation to the larger goals. How do you align the higher-level company goals to the work you teams are performing? We like to use Objectives and Key Results, or OKRs. This concept was created by Andy Grove at Intel and brought to Google by John Doerr. The framework aims to align higher level “objectives” to measurable “key results.” An objective at one level has several key results. These key results become the objectives for the next level down and defines another set of key results at that level. This continues all the way down to the lowest levels of the company resulting in alignment of key results and objectives across the entire company.
Choosing the Right MetricMetrics-driven institutions demonstrably outperform those that rely on intuition or “gut feel.” This stated, poorly chosen metrics or simply too many metrics may hinder performance.
- A handful of carefully chosen metrics. Choose a small number of key metrics over a large volume. Ideally, each Agile team should be evaluated/tasked with improving 2-3 metrics (no more than 5). (Of note, in numerous psychological studies, the quality of decision-making has actual been shown to decrease when too much information is presented).
- Easy to collect and or calculate. A metric such as “Number of Customer Service Tickets per Week” although crude, is better than “Engineer Hours spent fixing service” as it requires costly time/effort to collect.
- Directly Controllable by the Team. Assigning a metric such as “Speed and Accuracy of Search” to a Search Service is preferred to “Overall Revenue” which is less directly controllable.
- Reflect the Quality of Service. The number of abandoned shopping carts reflects the quality of a Shopping Cart service, whereas number of shopping cart views is not necessarily reflective of service quality.
- Difficult to Game. The innate human tendency to game any system should be held in check by selecting the right metrics. Simple velocity measures are easily gamed while the number of Sev 1 incidents cannot be easily gamed.
- Near Real Time Feedback. Metrics that can be collected and presented over short-time intervals are most desirable. Information is most valuable when fresh — Availability week over week is better than a yearly availability measure.
Managers are responsible for the performance of their teams in relation to the company’s objectives and how they create shareholder value. Measuring how your teams are performing against or their contribution to those goals is only speculation if you don’t have the correct measurements and metrics in place. The bottom line is, “If you are not measuring, you are not managing.”
Are you having difficult defining the right metrics for your teams? Are you interested in defining OKRs but don’t know where or how to get started? AKF has helped many companies identify and implement key metrics, as well as implementing OKRs. We have over 200 years of combined experience helping companies ensure their organizations, processes, and architecture are aligned to the outcomes they desire. Contact us, we can help.