3 Simple Productivity Metrics for Agile or Waterfall

admin   April 16, 2016   Comments Off on 3 Simple Productivity Metrics for Agile or Waterfall

challenged my former Head of IT, some years ago. Certainly, it’s a reasonable request to ask how productive a team (or a whole system) is.

But first let’s look at the why behind the question. Why do we measure productivity?  Because we should? Because we can? For transparency? Accountability? To drive behaviors and influence culture? Should we measure it at all?

There are three simple, impactful metrics (for agile or waterfall workplaces) that I informally collect (through conversations is a good start) to quickly gauge productivity and how healthy and high-performing an organization is.

Lead Time

Lead time is the queen of metrics. Lead time tells me how long it takes work to travel through the whole system, from concept to cash.

What do long lead times look like in the real world?

This week I’m working with the largest company of its type in this state. It regularly takes up to six months to get a business case approved, and another 12 months to deliver a project. That’s an 18-month lead time to deliver value to customers. Given that requirements change at an average rate of around 2 percent per month (based on Capers Jones’ empirical research in the 20th century, and it’s probably higher in 2016,) this means a project that goes live today is delivering requirements that were signed off on 12 months ago and have changed (degraded?) by over 24 percent.

This company’s volume of work is expected to increase at least 30 percent in the near future (with no headcount increase.) What happens when we add 30 percent greater volume to an already chockablock freeway? It reduces our speed by an order of magnitude.

This company is adding risk to its portfolio by having such long lead times. Are the teams productive? Not nearly as productive they could be. What actions should they take to reduce lead times? Just reducing the batch size of work (e.g. from 12-month projects into small, discrete features) and setting work in progress (WiP) limits will often double throughput (i.e. halve lead time) as described by Lean management guru Don Reinertsen. These are things you can start doing sooner rather than later.

But, by itself, lead time doesn’t tell me how productive a team is.