Making Measurement Meaningful with Evidence-Based Management
More than ever, organizations must focus on their investments and efforts. The ability for organizations to be agile is what will help them pivot and sustain. However, defining success of an organization’s agility by output metrics like “number of agile coaches”, “number of people trained in Agile”, or “velocity” often results in what agilists refer to as Zombie Scrum (superficial agile transformation) because there is no real invitation for improvement, or even a notion of what improvement would really look like. Traditional metrics like “on time” and “within budget” are also especially not useful when markets and customers are constantly changing because that type of focus potentially results in delivering solutions to problems that no longer exist. They also don’t measure whether what was delivered was truly valuable or useful to the customer.
Ultimately, organizations increase their business agility by being relevant to customer needs, reducing waste and non-value added work, and empowering teams to improve their delivery capabilities. Evidence-Based Management (EBM) helps organizations improve in these areas by helping them to:
- Achieve business agility by focusing on value. EBM started as an idea that Ken Schwaber, the co-creator of Scrum, began to pursue almost a decade ago to help teams and organizations focus on valuable outcomes. Organizations wanted to be Agile, yet had little understanding of why or what value meant to them. He suggested that organizations revitalize their agile efforts by examining their current value in the marketplace in conjunction with their ability to sustain or increase that value. EBM is defined in the Evidence-Based Management Guide. Scrum.org has developed a course for those who wish to learn more about EBM and how to apply its concepts in order to increase business agility.
- Gather evidence to transparently show contributions to goals. Setting up goals is scary, because it can feel like you are setting up conditions for potential failure. But to me, agile initiatives or well-intentioned businesses making decisions based on gut is scarier. Those scenarios often remind me of this 20 second scene from the 100-yard dash for people with no sense of direction by the British comedy troupe Monty Python. Ultimately, goal setting is an opportunity for us to collaborate, align, (re)focus and learn from the market and the organization. How specific and the scope of goals depends on their timescale, as noted in this blog.
- Measure customer outcomes to gain perspective on business value. The EBM Guide considers 3 categories of measures when framing goals: Activities, Outputs, and Outcomes. Understanding what we measure and why can help us improve our capabilities and move toward customer outcomes and better business results especially in uncertain conditions. This is especially important when using the popular OKR technique. OKRs benefit from EBM because EBM provides conceptual tools to help organizations improve toward their goals. You can find a discussion of how this works in the context of OKRs as well as ideas on how to use OKRs with EBM in this blog.
- Align effort by guiding people with customer outcome-based goals. People can do amazing things when guided by customer outcome-based goals. In one organization using EBM, an Agile Coach noticed a significant jump in team morale as they focused on their progress toward outcomes. The outcomes provided the team with a clearer picture of success and removed the pressure of performance toward output. In turn, management also shifted their focus to removing impediments for the teams. That’s why In the PAL-EBM Course, we ask students to consider the relationship between goals, measures and behaviors. This relationship is important to understanding empowerment, self-management as well as a reflection of what an organization values.
EBM provides organizations with an opportunity to use empiricism to improve customer outcomes by delivering greater value. It helps to improve collaboration by elevating conversations from opinion-based discussions to evidence-based discussions and decisions. EBM may feel awkward at first, but it will be rewarding. The seeds of learning and changing are there.