Types of Metrics: Outcome, Production, Health

To assess the effectiveness of an agile team and the impact of coaching, it is crucial to use metrics, but not all metrics are the same or serve the same purpose.

It is critical to distinguish between different types of metrics to get a complete picture and avoid erroneous conclusions.

One useful classification divides metrics into three main categories: Outcome, which measures business impact; Output, which measures team efficiency; and Health, which measures team well-being and sustainability.

Understanding this distinction helps to focus improvement efforts correctly and communicate progress in a more meaningful way.

Outcome: Business Impact (Profit, OKRs, NPS)

Outcome metrics are the most important from a business perspective, as they measure the real impact of the team's work on organizational objectives.

They answer the question, "Are we achieving what we set out to achieve?". Key examples include:

• Profit/Revenue: the fundamental financial metric for most companies.
• Objectives and Key Results (OKRs): Framework for defining and tracking strategic objectives and how they are measured.
• Net Promoter Score (NPS): Measures customer satisfaction and loyalty, indicating the likelihood of recommendation.
• Conversion Rate, User Acquisition Cost (UAC), Customer Lifetime Value (LTV): Product-specific metrics that are directly linked to business success.

These metrics indicate whether the team is building the right thing.

Production (Output): Team Efficiency (Velocity, Throughput, Cycle Time).

Output metrics measure the efficiency and cadence with which the team delivers work.

They answer the question, "How fast and efficiently are we working?". They do not measure the value delivered directly, but rather the capability of the team. Common examples are:

• Velocity: Amount of work (in Story Points) completed per Sprint (in Scrum).
• Throughput: Number of work items completed in a period of time (common in Kanban).
• Cycle Time: Time it takes for an item to pass from the time work is started until it is completed.
• Predictability: How well the team meets its delivery commitments.

These metrics help to understand how the team works, but should not be the ultimate goal.

Health: Team Well-Being and Sustainability.

Health metrics assess the well-being, morale, and long-term sustainability of the team.

They answer the question, "Is the team in a position to continue to perform well?". A "burned out" or unmotivated team will not be able to sustain good performance. Examples include:

• Team Health Monitor Results: Periodic evaluations on aspects such as collaboration, fun, learning, etc..
• Retrospective Feedback: Recurring themes or patterns that indicate health problems.
• Team Morale/Satisfaction: Measured through surveys or one-on-one conversations.
• Pace Sustainability: Is the team consistently working overtime?

Ignoring team health can lead to a future decrease in both production and output.

Goodhart's Law and the Danger of Metrics as a Target.

It is crucial to remember Goodhart's Law: