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How to Measure Agile Team Performance

Agile teams thrive on driving results, but it’s important to know exactly how to measure Agile team performance. With a lot of Agile KPI metrics to choose from, finding the metrics that matter for your team is easier said than done. As Eric Ries, author of The Lean StartUp reminds us, it’s important not to target ‘vanity metrics.’ That is to say, performance metrics that make an Agile team look great but, in practical terms, don’t mean a whole lot.

So, how do we figure out how to measure Agile team performance? Agile experts recommend hyper-focusing on just four metrics, detailed below:

  1. Predictability (measured by the Planned-to-Done ratio)
  2. Productivity (measured by cycle length)
  3. Quality (measured by the Escaped Defect Rate)
  4. Stability (measured by happiness metric)

How to measure team performance in Agile: Predictability

By using predictability as a metric, your Agile teams will be able to calculate what the likelihood of delivery will be. For example, if they commit to 100 backlog items over a quarter and deliver 90, their planned-to-done rate would be 90%. 

It’s worth budgeting resources for any likely additional deliverables that may need to be taken on during the given period or ensuring those that weren’t previously planned are counted to get more accurate results. This metric can be used to create more accurate OKRs, improve planning, and better balance resources for your Agile teams.

How to measure Agile team performance: Productivity

Arguably one of the most important metrics, productivity is measured by cycle time — that is, how many items your Agile teams can deliver in a given period of time. This should ideally be measured with an Agile project dashboard

On a very simple level, you can measure productivity by using dashboards to track the amount of work completed in a sprint or cycle from when the work started to when it finished. The shorter the cycle time, the more things are getting done.

How to measure team performance in Agile: Quality

Quality, on the other hand, is measured by Escaped Defect Rate, which tracks the overall quality of the deliverables your team is working on. It connects customer satisfaction to the team working on the customer product or software. The lower the defect rate, the more likely the customer will be satisfied with the product. 

Therefore, we measure Escaped Defect Rate by tracking the number of problems (these can be bugs or defects) found in a product once it has been released. These defects are only those that are recorded post-release.

How to measure Agile team performance: Stability

This metric measures how stable your team is (and consequently what their output is). This is known as the ‘human factor’ and essentially reminds us that if the three other metrics are absolutely perfect, the team is likely burnt out or about to be. This can be assessed in the form of a survey with a ranking of the team’s choosing. The happiness metric can be used to reassess timings, resource allocation, and processes. It can also be used to improve team collaboration. Getting this metric right is critical for hardworking Agile teams.

Further reading