Wednesday 12 November 2014

Agile Projects should have Effect Targets

Dear Junior

Measuring projects and setting targets for them is a tricky business. And, it does not get easier when agile projects enter the scene. This is not really because agile projects are strange per se, but because they are different from non-agile projects.

Setting targets and measuring projects is also an important business. I have seen several agile initiatives fail. Most of them have failed because they did not succeed in setting goals for projects, and monitor their progress. And if you cannot do that, you quickly lose the confidence and support from upper management. Agile initiative terminated, or left to dwindle away. End of story.

However, it need not to be so. Agile projects can have measurable targets, and they can be monitored - you just have to do it right.

There are some bad news and some good news.

The Well-Established Chaos Rod for Measuring Success

The bad news is that agile projects cannot be measured using the de-facto established standard rod for project success.

The standard rod for measuring projects is "on-time and on-budget, with all features and functions as initially specified", as used by e g Standish Group in their much-to-cited Chaos Reports. Let us call this the "Chaos rod". Most organisations use some version of the Chaos rod for measuring their projects.

As we have discussed earlier it is pretty obvious that "all features implemented" is not a good way to measure "project success" - not for any project. Nevertheless, this is the standard rod.

Damned if you do, damned if you don't

Of course agile projects will fail if measured using the Chaos rod. The reason is simple - agile projects does not manage to keep their hands away from fiddling with the original specification. Agile projects remove stuff, change stuff, add stuff - agile projects are in a constant state of scope-creep.

This is no coincidence - it is how agile projects are designed.

Think of it this way: If we learn something during the run of the project - shall we let that insight effect the plan of what we intended to do? Or shall we ignore that insight, sticking to the original plan even though inferior? Of course we will adapt! Anything else would be ridiculous.

An agile project anticipates that such insights will emerge, so its processes are designed to harness and leverage upon those insights: demos, retrospectives, re-prioritisation of product backlog etc. These practises are all aimed at constantly refine and redefine the scope. But then, we have derived from the original specification "all features and functions as initially specified".

Thus, any agile project longer than a sprint will fail - by definition. That is, if you use the Chaos rod for measuring success.

To put it bluntly, if you measure an agile project using the Chaos rod, it will fail. Either the agile process will fail, or the project as defined will fail.

Either, the project adapts to its measuring rod and blindly follows the "functions as specified", throwing whatever insight gained aside. Then, "project" will succeed, but "agile" will fail.

Or,  the project will work according to its agile-minded processes, and then certainly the result of the project will not be "all features and functions as initially specified". Then, "agile" will succeed, but "project" will fail. I e project will fail as measured by Chaos rod.

Damned if you do, damned if you don't.

A New (or Old) Hope

The good news is that the Chaos rod is not the only way to measure projects. As we have discussed earlier, there has always been two ways to measure projects: feature list (Chaos rod) or measuring business effect, what we can call the Effect rod.

Let us take our earlier example with an on-line book store. They had an idea that recommendations of the type others-have-bought would increase their sales, so they set of some money for that projects.

Using the Chaos rod they would have created a feature list around others-have-bought recommendations. The project would later be evaluated on how well it implemented the list. But let us look at a better idea.

Using the Effect rod they might set a target that customers will by 0.35 more books per checkout on average. The Effect rod is used to state the value of a project. These 0.35 books can probably be converted to money, that makes the project worth the effort.

The project might start out with an idea that others-have-bought recommendations would cut the cake. After the first small stories, deployed to production and put into hands of customers, the team learns that some kind of category would be helpful. To facilitate this they implement a simplified "search similar" as one of their features.

Suddenly the number of books in the checkout carts raise to a level 0.4 above the pre-project baseline. And the level sustains, it was not just random noise - the change is statistically significant.

The project has fulfilled its target according to the Effect rod, and is declared a success.

Measuring using the Chaos rod "on time, budget, and specification" - the project would have been deemed a failure, because it did not deliver the initially specified others-have-bought.

So, agile projects can be measured. You just have to use a measurement that is well suited. And, to be honest - which is better anyway.

A sad side-note is that I know of several projects which have worked in an agile manner, and delivered enormous business benefit - but in the project report the project lead has had to apologise repeatedly for not meeting the project target as defined in the project specification - a feature list.

Granted, to measure projects on business effect is not a new idea in any way at all. The idea was certainly there before the Agile Manifesto was written around the turn-of-millennia. What is new is that this way of measuring is essential to provide rigour to agile projects.

For Agile to succeed at larger scale, we certainly need lots practises around agile-minded processes. Measuring agile projects on effects is certainly one of them.

The way to measure agile projects is to set targets for business effect.



PS Interesting enough, there is a sub-category "agile projects" in the later Chaos Reports, but the rate of success is not 0%, it is around 40%. I wonder what is going on here.

PPS Within the agile community, the practice of projects is debated - at least in the sense of the common description "temporary organisation with limited time, resources, and ambition". So, it would probably be better to use some other term, e g talking about "initiatives". However, for convenience, I have kept the often-used and familiar term "project". Check out the twitter hashtag #NoProjects.