Metrics in Agile and XP Project Management

There are many data driven companies, and even more data driven teams in those companies. Today we measure everything: we measure how many users visit our website, how many calories are in the meal we just ate and how many points are in the current sprint. For every process there are metrics and performance benchmarks.

Today I heard Ofir Shalom's opinion on the subject of agile project management. Ofir leads the engineering team at and in the past worked for Checkpoint and Mercury (HP).

According to Ofir the gist is: "Don't focus on productivity, quality and predictability. Focus on agility".

Productivity, quality and predictability are easy to measure, e.g. predictability - estimated 20hr task or a 6 points dash, actual effort was 30hr task, which means a result with 50% predictability error. Although these metrics are easy to measure they don't provide enough value to business driven company, because they are lagging. They come after the action. The idea is to find and use leading indicators. The business objective sets the type of resources needed, in case a resource is defined as an agile development team, we need to measure the success of the dev team based on its agility. Following this logic reasoning, Ofir's vision is innovative.

Quants and other financial-tech personal are familiar with trading indicators. To make things simple, there are two main groups of indicators, the first group signals a future change and the second group indicates after the change that it is still valid. The same concept applies in project management. We measure the past and say "it was valid or not". Find a future indicator for your software development team's next sprint.

Business driven company is a company that the technology is there to enable and leverage the business. The counter-example is Microsoft, which is a technology driven company. The difference is huge when it drips down to the employees. Ask yourself and your team: "What challenges you? The business request or the technology execution?" Is it "I need the feature ready for a big expo next month" or "We should find a way to optimize contextual mapping..."

Ofir's idea for a leading indicator is passion. And for agility leading indicator is the answer to the question "are you happy to change?"
Simple, but right.