Metric drives behavior

To do: Add quotes on behavior and control from Don't just do something. Stand there.

Everything that can be counted does not necessarily count; everything that counts cannot necessarily be counted.

—Albert Einstein.

What gets measured is what gets done.

You can game any metric.

In other words, metrics drive behavior, also known as the Hawthorne Effect.

Therefore:

• Pick and design your metrics with great care as they drive human behavior, and therefore that of the organization.
• Use metrics to guide improvements that accelerate the organization or ecosystem as a whole, not to measure activities of people.
• Limit metrics to numbers that quantify a certain outcome or the quality of certain input that is key for the quality of an outcome.
• Select two to three universal metrics that apply to the whole unit, division or all teams.
• Use ockham's razor to measure only the necessary things.
• Aim the metric to maximize value creation.
• Capture the metric in planguage to quantify quality.
• Keep your metric elegant, terse, to the point.

• Metrics without goals are naked—Metrics should always give you a clue on where you are regarding your goals. So, find out where you are, how you measure that, and where you want to be. Set up a metric that tracks your progress.
• Balanced Metrics—Many metrics only focus on operational excellence. This creates a biased view on reality and distorts and deforms the organization as a whole. Therefore, balance metrics across the following dimensions:
  1. Operational Excellence
     • Velocity
     • Burn rate
     • Predictability
     • Sustainability
     • Meeting deadlines
     • Stay within budget
     • Meet quality requirements
     • Cohesive set user stories in a sprint
  2. User Orientation
     • Availability
     • Performance
     • User satisfaction (net promoter score (NPS)
  3. Business Value
     • Business value per € development
     • Business value realization
  4. Future Orientation
     • Enthusiasm and motivation
     • happiness index
     • Educational opportunities
     • Vision on future development
     • Innovative governance
  • Have participants brainstorm on metrics and put each of them in the most appropriate category. Next, pick one or two from each catagory to create balance.
  • Consider using planguage to capture metrics in a solid, comprehensive and consistent way.

Useful Metrics

Donald Reinertsen, author of Managing the Design Factory states that a good, useful metric is:

• Simple—The ideal metrics are self-generating in the sense that they are created without extra effort in the normal course of business.
• Relevant—One test of relevance is whether the metrics focus on things that are actually controllable by the people being measured. Psychologists have found that when people think that they can control something they are more motivated to control it. Measuring people on things they can not control simply causes stress, dissatisfaction, and alienation. Also, metrics must be relevant towards the end goal.
• Leading—Managers like leading indicators, and prefer an imperfect forecast of the future to a perfect report on the past. It is better to measure the size of a test queue than it is to measure the processing times of individual tests because test queue size is a leading indicator of future delays in test processing. Accountants like lagging indicators that can be measured very accurately, but these point to things that have past.
• Self-generating—Metrics are created without extra effort in the normal course of business, as in spin-off of daily activities.

Sources

• Jeff Sutherland » Scrum Metrics for Hyperproductive Teams
• Jeff Sutherland » Happiness Metric - The Wave of the Future
• David Anderson » Lean Risk Management—Options, Liquidity & Hedging Risk using Kanban Systems, about Liquiditeit, WIP, Lead Time, Cycle Time, Process Efficiency.
• How To Not Destroy your Agile Team with Metrics
• Gaming the Metrics | Pyzdek Institute