In my journey seeking to understand how we tangibly communicate agile transformation momentum, I’ve come to the conclusion that agile practitioners should break the cycle of relying on ‘Metrics’, that are often lagging indicators of success, to communicate progress towards the target transformation state. But what do you replace it with?
Let’s discuss through this 3 part blog series. This is part 1.
Lagging indicators, because of the “after the fact” nature of reporting are better positioned to precisely describe progress towards agile transformation outcomes (eg: Faster Time to Market, Better Employee satisfaction, Larger Shareholder value, Higher Customer satisfaction etc).
Leading indicators focus on observable patterns and near term outputs. They seek to answer questions that gives the Board of Directors directional information on whether agile transformation investment choices they’ve made will, eventually, result in leading indicators (of agile transformation outcomes), when reported, to flash green. The premise is alignment around “what’s good enough” as the most time wasted is ‘time spent in pursuit of perfection’ (ref: laws of diminishing marginal utility).
- Broadly, I subscribe to the thinking that Change and Transformation of a business will never cease. This is in continuous service of adapting to the ever evolving customer expectations and needs.
- That said, it is possible to develop an aspirational picture of a target ‘transformed state‘ by a target point-in-time, that’s some ways away from the current point-in-time. The target ‘transformed state‘ is qualified by competencies that have achieved target level of maturity.
- I posit that a ‘transforming state‘ exists in the elapsed time between current point-in-time and that target point-in-time. It is acceptable to hold a belief that the assumptions on that target point-in-time may be invalidated during the ‘transforming state‘.
- The nature of Transformation Energy exerted on the system to enable transformation state change evolves over time. A trivial example to bring this to life is: the numbers of agile coaches needed during agile transformation will be different to the number of agile coaches that the system needs in the ‘transformed state‘.
- Organisation Agility and Agile adoption maturity does not, always, follow an upward trajectory and will be impacted by uncontrollable/unpredictable circumstances like attrition, changes to geo-political or company policy, macro-economic factors or a Pandemic.
Given the above: When the Board of Directors of traditional business are considering embarking on an Agile Transformation of the business to achieve a certain business outcome, they may weigh some of the following:
- How do they inform themselves if they’ve reached the tipping point to start agile transformation?
- How do they give confidence to shareholders, employees and stakeholders that sensible agile transformation initiatives are receiving investment?
- How do they recognise and report return on investment, progress of agile transformation and inform continuous investment decision making?
- What kind of decisions do the Board keep and what do they delegate? [assuming they’d want to move faster than the speed of one brain (CEO) or a few brains (BoD)]
- How do they operate as a Board of Directors in the Transforming Agile Organisation? What behaviour changes do they demonstrate that gives a clear and unambiguous signal to the system that ‘this transformation’ is ‘for real’?
- How does the Board of Directors contribute to transforming the organism or system that creates products and services that customers love to use? Do they need to change their individual responsibilities in service of collective accountabilities?
I’ve observed that within the context of uncomfortable agile change, people tend to hold on to something similar (no mal intent). This may manifest in behaviours like:
- Adding a prefix of ‘Agile’ before the title of every meeting to demonstrate that we are, now, agile.
- Changing organisation design, team descriptors, role titles; but not changing inputs and/or outputs.
- Use a sprint burn down chart or cumulative flow diagram, but report the old ‘metrics’ on progress.
- Co-opting “2 week sprints” in a traditional Gantt chart.
You get the drift. These are, not, leading indicators of agility and an effective agile transformation.
I submit that agile transforming organisations must continue to report on meaningful metrics that they currently reporting on. These may be within the reported of ‘Key Performance Indicators’ (for example). Given it takes a village to produce these metrics and that they get reported with a long lead time, I’ve experimented with the introduction of other ‘leading indicators of agile transformation’.
Here’s my expression of leading indicators of agile transformation as the following:
- KAI: Key Adoption Indicators (have the squads sustainably adopted the chosen agile method?)
- KCI: Key Competency Indicators (have the people in role achieved target maturity for their role competencies?)
- KTI: Key Transformation Indicators (have the system learned to continuously deliver value on demand?)
It is important to note that collecting, collating and communicating leading indicators of agility are only possible in the psychological safety of people being honest about the data submitted.
In parts 2 & 3 of this series, I will go into
- What KAIs and KCIs are.
- How KAIs and KCIs can be collected, collated and communicated.
- How KAI, KCI and KTI are different to ‘Metrics’ and KPIs.
- The interplay between KAI, KCI and KTI that prevent gamification.
- How they can used alongside standard business metrics.
As of January 2020, to the best of my knowledge and Google searches, I’ve not come across the above terms or anything comparable. If I’ve missed a page, please let me know. Many thanks!