Agile is not new – it’s been around since before the turn of this century! But how do you ensure the success of your Agile transformation? There are lots of metrics around that seek to measure agility itself. But, what about the impact of agility on the organisation? How do we measure the success of Agile HR? If we want to ensure Agile success – we need to understand the concept of “pacing” and we need different metrics.
Understand Pacing for Measuring
As I was thinking about this, the concept of the long-distance or marathon runner came to mind. Measuring “success” at the end is too late. You either made your planned time for the race or you didn’t. And you didn’t learn anything along the way to help you improve. It’s the same with Agile HR and Agile People Transformation. Waiting until the end is too late – it’s a “lag” metric.
Lag and Lead Metrics
A lag metric is one where you have to achieve first, and then judge whether or not you have achieved. Any metric that you measure after the event, or you measure the “output”, is a lag metric. So, HR metrics such as Time to Hire, Employee Turnover, Revenue per FTE, etc. are “lag” metrics. They are easy to measure, but impossible to influence, because they are only measured after they happen.
Lead metrics, on the other hand are “input” oriented. They measure the things we need to do to achieve the output. But, because we are measuring input, they are easier to influence at the time in order to ensure achieving the output. Managers should all be focussed on Lead metrics – those metrics that can be influenced, and behaviours changed, in order to ensure the achievement of the goal metric.
Strategies and Pacing
So, back to the marathon runner. There are a few “strategies” employed by long distance runners. Some run the first part of the race at faster than goal time, then settle to goal time for the middle section, then speed up for the last section. Others start slower than goal time, speed up to goal time for the middle section, then go to faster than goal time for the last section.
Which strategies work best for the runner is not important for us. The important thing is they have learned “pacing”. Whatever the strategy, they are able (through technology these days), to know their pacing at any time during the race, and make adjustments when necessary, to ensure that they stay on track to achieve their goal. Their pacing is likely to be a combination of speed, heartrate, energy burned, etc.
Back to Performance Measurement
And, it’s no different when measuring performance, in our case the performance of our Agile HR Transformation project. If we want to ensure success, we need to:
- Know and measure what success is, and
- Set our “pacing” that ensures success.
Know and Measure what Success is
From all the research available to us, Agile organisations should:
- Increase speed of execution
- Better respond and adapt to customer needs
- Increase productivity
- Engage and empower employees.
If these are what we are going to use to measure success, firstly, we need to have a goal for each. We need to set the “lag” metric. So:
- Increase speed of execution – increased revenue is one lag metric that can be used – the more we produce, the more we sell, the more revenue is generated
- Better respond and adapt to customer needs – a simple customer satisfaction survey is one lag metric that can be used
- Increase productivity – again increased revenue is a simple lag metric that can be used, or increased profit.
- Engage and empower employees – an engagement survey and employee satisfaction survey are lag metrics that can be used.
But, what of lead metrics?
When it comes to Lead metrics, it is much more difficult to determine what the metric should be.
Increase speed of execution
We can increase speed of execution by throwing more resources at it. But then our costs will increase. So, presumably we want to increase speed of execution while maintaining the current cost structure. One lead metric is, therefore, cost. If cost increases, we need to take action now. The other metric is output – or in the Agile world, velocity. If velocity drops, we can take action immediately. And if we simply monitor and adjust these metrics for the duration of sprints and projects, we should achieve our goal.
Better respond and adapt to customer needs
The ultimate metric here is NPS – the Net Promotor Score. It measures customer experience and can be used as a “lead” indicator to predict business growth.
A lead indicator for this is how involved the customer is in the design of the product or service. If the customer was not involved in the Backlog definition as well as the Sprint Planning and Review meetings, that is a good indicator that the end result may not be what the customer really wants. There needs to be a balance between too much and too little customer involvement, so the Customer Effort Score (CES) can be used as a good lead indicator for this.
In the agile world, productivity is not measured in numbers produced, but rather in producing only what the customer wants. If additional features are added that were not requested by the customer and are not on the sprint or product plan, that is considered waste. So, lead metrics could include features planned vs features delivered, as well as quality of the feature delivered. These are statistics that should be included in the reporting
Engage and empower employees
Employee engagement has nothing to do with how happy the employees are. Its is a complex metric that combines a number of factors and has everything to do with how well their leader is engaging them. Employee Engagement is largely a “lag” metric. Key measures of engagement include:
- People have good relationships with others in the organisation
- Their work is meaningful
- They have a sense of autonomy
- They believe that they are growing – both personally and professionally
- They enjoy their time at work
- Their opinions are valued
Lead indicators of reduced engagement are:
- Decreased productivity – missing deadlines, submitting subpar assignments,doing the bare minimum, lack of innovative or creative thinking
- Social withdrawal – avoiding company or departmental social functions, spending a great deal of time alone, not contributing during meetings
- Attendance problems – frequently missing work, coming in late, leaving early, taking extended breaks during the day
- Negativity – constantly complaining about their jobs or the organization, shifting blame to others, exhibiting a defeatist attitude
- Lack of initiative to improve. – forego training and development opportunities, avoid taking on new challenges
It should not be expected that managers alone will report on these indicators of disengagement. But, team reports and sprint reviews should include questions that will quickly identify some of these indicators so that they can be addressed on an ongoing basis, with both the leader and the staff member.
Another “lag” metric that is used to measure the engagement of employees is the Employee Net Promotor Score (ENPS). This is the same question but instead of addressing to customers, it is addressed to employees. It can be used very effectively in combination with the Employee Engagement metric.
These “lag” and “lead” metrics should not be considered definitive, but rather indicative. Each organisation, or even each team, is likely to have elements that are important to them and which need to be measured. The important thing is to be able to identify which metrics are “lag”, and which are “lead”, and to use the “lead” metrics constantly and consistently so as to ensure that the “lag” metric is met. The best metrics to use for ongoing measurement of the success of your Agile Transformation journey are:
- Employee Engagement
- Customer Net Promotor Score
- Employee Net Promotor Score
They are short and quick (or should be), so noone should feed that they have been “over-analysed”. And, if you measure at critical times, you have the time to make any necessary adjustments to your transformation process in order to achieve overall success by the end of the journey.
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TalentAlign helps organisations create a workplace where the organisation and its people can grow and thrive and achieve their highest selves.
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