Measuring the success of business agility – The winning formula
Don’t fall into the measurement trap; focus on driving business outcomes, not process metrics.
Being agile – whether in your development organization or extending agile methods across your entire organization – is about customer centricity, faster cycle times, improving quality and even employee satisfaction. But how can organizations measure whether their agile practices are actually bringing better business impact? There’s not always a clear answer to this, and more often than not your measurements will evolve as your company matures its agile practices. But, our counsel to all of our customers on their agile journeys is to look at the business outcomes you’re trying to impact.
Most organizations keep a close eye on specific metrics, like improved quality, faster time to market and reduced defects. This is important – these process metrics tell us if the practices we’re employing are working. But you can’t stop there. What those metrics don’t always convey is the outcome of the work: You have fewer defects, but are your customers happier? You built something faster, but did you build the right thing in the first place? Is your faster delivery into the market actually having impact on your bottom line? Being agile is not about measuring the process, but instead about measuring the business results.
As you evolve in your agile journey, we recommend that you focus on the following imperatives to better measure your success.
A key benefit of agile is its ability to provide timely customer feedback into the development teams for greater insight. One way to measure the outcome of that process – customer satisfaction – is via NPS (Net Promoter Score), a measurement of customer experience and improved quality. With a high NPS comes the understanding that customers are happy, which in turn predicts increased business growth as customer referrals convert to new leads, and ultimately more overall revenue.
Alignment between strategy and execution
An important outcome of business agility is increased alignment and visibility between the business strategy and the work that is being done. With the pace of business moving faster than ever, visibility into all resources and initiatives becomes critical – from business strategy, to investment spending, to work execution. With a single, consolidated view of all work happening across your portfolio, better agility gives leaders greater insights to optimize investment decisions with available budget and resources, while teams can coordinate their work to affect business outcomes.
Self-organizing, cross-functional teams are the foundation of successful agile practices. These empowered teams don’t just produce better products and services: they also produce more engaged employees. According to a study by Freeform Dynamics, more than ¾ of organizations say that agile practices are helping improve satisfaction within development teams.
As the adoption of agile practices continues to expand outside of IT and across the business, companies have the opportunity become more nimble to market changes and attuned to customer’s needs, while also creating the flexibility and bandwidth to capitalize on new market opportunities. To ensure agile success, companies must keep their eye on essential business outcomes, rather than be caught up in process metrics that create a sense of false success. By doing so, organizations are not only being built to change, they are also being positioned to last.