Agile and KPI's, Friends or Enemies?

March 29, 2016 Focus area: Scaling Agile

Organizations adopt an Agile way of working because they believe this contributes to improving their performance. Reducing time-to-market, improving flexibility and increasing customer satisfaction are often cited as the main reasons. The expected benefits of an Agile way of working are often not measured sufficiently, let alone in a quantative way. Therefore, it is difficult to have a good understanding of the (improved) performance when adopting Agile. Not only potential areas of further improvements may be neglected, also a justification of continuing with the proposed organizational change becomes less legitimate. Using KPI’s can be helpful with this. However, can Agile and KPI’s be friends or are they doomed to be enemies?

When using the right set of KPI’s one can gain insight in the way Agile working is contributing to the performance of the team and the organization as a whole. When people are still questioning the positive effects of establishing an Agile organization, it is valuable to have quantitative arguments following from these KPI’s. Moreover, potential areas of improvements can be assigned, based on the right measurements. Agile principles promote teams reflecting on their own way of working and finding ways to improve performance on a regular basis. Where the team itself might have difficulties to see the potential improvement, KPI’s can help gaining this insight. In addition, it can also point out the strengths of certain teams which can encourage them to share their best practices with other teams.

So yes, there are definitely some good reasons to measure the Agile performance with KPI’s. However, doesn’t this go against one of the ground ideas of Agile that delivering working software is the only measure of progress? Some people therefore argue that in Agile all overhead and all activities that are not directly related to software development, should be diminished. Setting up a KPI measurement tool, can be conflicting with this. Moreover, Agile is about giving teams responsibility, confidence and autonomy. Strictly measuring someone’s performance does not seem in line with this principle.

Measuring a team’s performance by means of KPI’s sounds conflicting to some of the principles of Agile as mentioned above. However, one must be careful that Agile is not misused in order to have an excuse not to reflect and report on the performance, and not to focus on other important outcomes like client satisfaction and effectivity. Agile is all about reflecting on the performance of the team and the organization, in order to continuously improve . Agile KPI’s can be a great help in this.

In order to prevent Agile and KPI’s to become enemies, it is crucial to define the right set of KPI’s looking at both the topics to be measured as well as to the amount of the KPI’s used for this. Moreover, the KPI’s must be used to gain more insight, to show what is going well and to define areas of improvement. It must definitely not be used as a control and punish mechanism. Besides, being transparent about it and make it a team effort will be essential for its success. When taking these points into account, a long term friendship can be assured.

BlinkLane’s Agile KPI model                                                    

BlinkLane developed an Agile KPI model, which makes it possible to easily gain insight in the most important business indicators in a time efficient manner. Interested? You are welcomed to contact us for more information.