Measuring throughput? You’re doing it wrong.

Posted on June 14, 2016.


One of my favorite questions to ask when starting with a new client is, “How do you measure success?” The responses invariably start with, “Good question” and are then quickly followed, in almost all cases, with one of these words: throughput, velocity, shipping, or features. Getting features out the door and into customers’ hands serves as the hallmark of productivity and success. It’s the basis of the teams’ plans and the foundation of the company’s incentive structure.

It’s also fundamentally flawed.

Don’t get me wrong. I firmly believe that ideas without execution are nothing more than wishful thinking. However incentivizing your teams to get an increasing amount of features produced only ensures that your products will have more features. Nothing more.

The reason for this phenomenon lies largely in management incentives. Measuring features is easy. It’s binary. You shipped it or you didn’t. Because it’s easy to measure, it’s easy to manage. Alternatively, giving teams problems to solve without dictating a specific solution means they determine the best way to achieve that with success determined by a desired outcome. An outcome is a measurable change in customer behavior. This is a variable range and therefore more difficult to measure. Subsequently, managing to outcomes becomes more difficult because the clarity of a binary choice is lost. Because of this many companies resist this approach. And yet, time and again, teams that get to choose what solutions they work on build more successful products, work more efficiently and are generally happier at work.

Does your company manage to velocity or outcomes? I’d love to hear how you do it.

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