Becoming Agile: Evidence Based Management

Moreover, there's no denying that senior managers are generally right about the need for increased agility. If their organizations fail to improve, then they could well be disrupted out of business. That much is becoming increasingly clear. Yet it's also the sticking point. You see, agile transformation isn't about "accelerating a production calendar", as is often assumed. It's really about becoming a learning organization...one that's innovative enough to survive.People, I suppose, can be right about certain things for the wrong reasons. That's what management support for "going agile" often boils down to. I remember the gasp of incredulity when I first explained to a senior executive that the agile transformation he talked about wasn't geared towards completing projects "faster and cheaper", as he claimed. "In truth," I said, "agile transformation is about learning to build the right thing at the right time". The mouth gaping back at me was momentarily staggered into silence. The face that framed it was a picture. It is still in the gallery of my mind's eye: "Study of a suit in shock". An unforeseen vista had rent the air and stretched out before him. He now saw a different perspective: value might not be what it appeared to be. These are the new bombshell moments which add pep to an agile coach's day.

It's important to give folk an anchor in a major paradigm shift, such as the adoption of agile practice. They need something they can hold on to as a point of reference, a true north. Here's something to grab: agile transformation is not done for its own sake. Value, however it is measured, ought to be improved as a result of change. If value is measured well, then by means of frequent release, inspection, and adaptation, it can be maximized. If it is measured poorly, then an organization may just become better at doing the wrong thing. Eventually, more switched-on disruptors will move in for the kill.

Some companies misalign their success criteria. For example, they may gauge success in terms of a certain capability delivered by a certain date for a certain cost. Their project controls and measurements are geared towards an objective where evidence of success, or failure, will arrive late. These companies would be far better served by an ability to respond to change in an uncertain world.

Generally speaking, the most common dysfunction is to try and measure value in terms of outputs, rather than outcomes. A classic example, which is often encountered in agile transformation, is known as "point productivity". If a technical team estimates each piece of work before doing it, and gives it a notional size in points, then team members will roughly know how much they're taking on when planning to meet a goal. They are within their rights to use this approach. However, the numbers are not then too hard for managers to get hold of, and it is tempting for the higher-ups to conflate the estimated size of the work with its value. On the basis of this extraordinarily circumstantial evidence, the more "points" a team supposedly "delivers", the more productive it is held to be. Why fake this equivalence? Because the genuine value of product increments to stakeholders, if any are indeed delivered at all, can be a much harder thing to discern. In fact there could be little appreciation of a product in the first place. There might simply be a project with a mandate, a bolus of requirements, and a fixed amount of money in the pot.

The irony of the situation is palpable. We often read about how merciless companies can be in the quest for profit, and of how keen they are to maximize shareholder value. Yet when it actually gets down to counting the beans in a timely way, and figuring out what sort of investment to make in the next Sprint, based on hard empirical evidence, they can't set themselves to the task. They can't do it. They fiddle the books with wooden dollars instead, and declare that the balance of story points being "delivered" perhaps ought to rise. Non-profit organizations, such as charities, are not necessarily any cleaner. The performance indicators used to gauge impact on the social good, for example, can be tenuous and trailing. Rather than dealing with this challenge head-on, and identifying the outcomes which they can empirically measure, non-profits might also resort to assessing outputs instead. They too can fall prey to the siren call of measuring "points delivered", for example. They too might obscure true stakeholder value with circumstantial data that, when taken out of context, becomes fake. The comparative ease with which data like this can be obtained, and used to proxy for value, is often imagined to be a solution and its misappropriation a virtue.

It's critically important to understand that measurement is strategic in nature. Senior executives are accountable for the value an organization provides and for corporate reputation. If the measurement of value is poor, then the outlook is grim. However, if the understanding of value is challenged and curated in an empirical way, with a timely focus on quality outcomes rather than circumstantial outputs, then it becomes possible to survive and thrive. Continuous improvement is enabled. Management, in other words, has to be evidence-based. This is of essential concern where an agile organization with an innovation capability is to be cultivated.