After recovering from bankruptcy in the 1990s, Continental Airlines needed to cut costs. Fuel costs were higher than ever for airlines so the management team decided they needed to incentivize pilots to reduce consumption. They established a metric to track fuel usage and rewarded the pilots who cut back.
Pilots complied and fuel consumption dropped. They reduced air conditioning usage and flew more slowly. In theory, the initiative worked. Management got what they wanted, but there were unintended consequences including:
- Drastic drops in customer satisfaction
- Reduction in on-time performance
- Long-time frequent flyers leaving for competitors
On the surface, this metric seemed like a solid way to get spend under control but in the end, it cost Continental millions in lost profits.
It’s a classic issue of focusing on the runners and not the batons. It’s common to hear management emphasize the need for teams to feel confident in meeting their Program Increment (PI) objectives and delivering stated business value during big room planning. To make that happen, we have to focus on the right metrics.
In our environment, the baton is the value we deliver to our customers and business at a steady pace. The runners are the teams that deliver that value. How can we ensure that we don't have batons laying on the delivery track and teams around running empty-handed?
1. Stop Focusing on Output
Velocity is a measure of output. It tells us if a team can meet their outcomes and is used for forecasting. But invariably, at some point, velocity is used to measure a team’s performance. When management pressures teams to increase their velocity as a silver bullet to shoot through organizational challenges, problems arise. You might hear someone say, “We need to make sure our teams are at 100% utilization.”
While on the surface, that sounds like a fair goal, stop to think about it more carefully. Picture the interstate at rush hour. Sure, it’s typically at 100% utilization, but how efficient is it?
Instead of having teams focus on utilization, have them set their sights on removing impediments (e.g., multiple dependencies, lack of automated testing, or incomplete user stories). Doing so naturally increases velocity.
2. Start Focusing on Outcomes
How do you align teams with PI objectives? Sprint planning. Each team should craft sprint goals (outcomes) that align with the PI objective. The Scrum Master and Product Owner should make sure that every story in the sprint backlog maps back directly to those objectives.
What if it’s not clear whether the story maps back to your PI objectives? Then you probably shouldn’t be working on it, and the Scrum Master should set it aside. Your team will see a "burn-up" of value achieved in every sprint if they stay focused on the important outcomes and challenge anything that is not clearly aligned with the PI objectives.
3. Make Everything Visible
Making something “visible” isn’t as simple as slapping it up on a wall and calling it a day. Visibility means talking about an issue as soon as it comes up and not keeping it to yourself. Don’t wait until the daily standup to bring up issues that are blocking your progress toward a PI objective. Instead, put it in front of the Scrum Master and the Product Owner as soon as it arises so they can take immediate action.
Delivering on time and on budget are no longer the primary standards of project success. Solving problems for the customer and delivering consistent value to the business are the best metrics in an agile environment. If we meet our objectives and provide value that a customer can embrace, then we create joy, and we change the world one story at a time. That is the best measurement of success.
