Did you know that a study by McKinsey & Company revealed that 93% of companies that fully utilized the agile model before the start of the COVID-19 pandemic had better results than companies that didn’t? Reprioritizing is a normal thing for companies that use Agile methodology, and during the pandemic, this was what many companies lacked. So, stick with us and find out how to measure the performance of agile delivery teams.
Picking the right tool for the right job
Nowadays, there are over a dozen Agile KPIs you should follow, but we’ve found four that you should primarily focus on. Here they are:
To put it in simple terms, stability is like the health meter of your team. It also measures the stable output of your team. So you need to watch for it, or your team might burn out pretty quickly.
One metric that is usually used for measuring stability is the happiness metric. This is typically a questionnaire consisting of five (or more) questions. For example, “Are you satisfied with your company” or “How would you like your happiness to be increased?” Aside from the questions, some companies use a happiness rating to check how happy the team members are at any given moment.
New data suggests that this is the wrong approach. So what should you use to measure if happiness alone isn’t the key? The simple answer is “Team morale.”
Morale as a metric is more team-oriented, goal-driven, and less biased than happiness. Morale metrics rely on questionnaires too. However, questionnaires that measure the team’s morale are much more encouraging. Their mission is to improve self-confidence and overall team spirit. Too many “happy-oriented questions” and “toxic positivity” may sound a bit frustrating and overwhelming. It’s impossible to stay positive all the time and be happy about everything!
Instead, happiness and fellowship are about being proud of your team and helping out your teammates, right? In other words, you should measure happiness through morality using tools like questionnaires and rankings from 1 to 10 to have more nuances to get to those metrics.
Cycle time is the best metric for productivity. Cycle time is how many things or tasks your team can deliver or complete within any given time frame. For example, dashboards and data-tracking platforms are great for keeping track of your productivity. The point is to have as many short cycles as possible. To create more new products, you must have more cycles.
For example, if your average cycle is 80hrs and you manage to shorten it by 25%, your team will have 20 extra hours. They can use that extra time to focus on new products or help other development teams. Using this metric, you can see the bottleneck within the production process.
Regarding quality, you’ll use a metric called Escaped Defect Rate (EDR). This way, you’ll track the general quality of deliveries that your team is currently working on. EDR establishes a link between customer happiness and the team developing the client’s software or product. If the product has too many bugs or is too glitchy, customers won’t be quite happy about that.
Thus, we use the Escaped Defect Rate by measuring the number of issues (bugs, defects, glitches, etc.) found during and after production. There are different EDRs for the QA phase, staging phase, and production phase. Using EDR in all of those can better assess the quality of the team’s work. Having different EDRs can give us a better picture of what’s going on within our team in different steps of development.
The most important EDR you can have is as they measure the bugs that no one could spot before launch. For example, if you have a separate EDR for, say, the QA stage, you might find that your developers are committing a lot of errors that don’t reach the customer but still require a lot of work from the QA team. That might point towards a problem with how your team is coding, so the team leader could use that EDR to revise the type of practices their team uses during development.
If you want to measure predictability, the best metric you can use is the Planned-to-Done Ratio. Suppose your company accumulated 100 tasks over six months and successfully delivered 70. What would the planned-to-done rate be? If you answered 70 %, then you’re correct. So this is a win-win situation for both you and your customer. This is a standard practice in the industry that compares the amount of work the team commits to performing at the beginning of the sprint to the amount they have finished by the conclusion of the sprint.
A sprint is like a deadline for a project. It’s a predetermined time frame during which a production team works to finish particular tasks, objectives, or outputs. A sprint effectively divides the project plan into manageable chunks of time where smaller objectives may be achieved.
A triangle with four sides
We’ve put the “human factor” or stability first since it’s the most difficult one to calculate – it isn’t as easily quantifiable as other metrics are. If you want the whole “quantitative” process to function properly, you should focus on your team’s morale. For the other metrics, Cycle Time and Escaped Defect Rate are the two most commonly used in Agile and are easy to calculate. It means that both metrics have to be as low as possible (close to zero).
Planned-to-Done is the opposite, and the rate must be as close to 100% as possible. Combined with the Cycle Time and Escaped Defect Rate metrics, Planned-to-Done forms a metric triangle. So if one metric is down, the whole triangle collapses. Finally, you should constantly overlay these three metrics with stability (team morale) and be creative with the questions.
Taking everything into consideration, these are the four best ways to measure the performance of agile delivery teams in the sea of different Agile Methodologies.