I promised I'd talk about metrics and objectives in this post.  It's going to mostly be about metrics.

It's imperative that you pick a set of metrics at the beginning of your agile initiative that will be used to measure the progress of the initiative.  By metrics, I mean measures or yardsticks.  You're going to put these metrics in the form of graphs that you're going to regularly review and that you're going to communicate to all employees.  You're going to choose the metrics so that, when they're going the way they're supposed to...you are confident the initiative is working.  If the metrics are going the wrong way....you are confident that the initiative is not working.  In other words, you're going to choose metrics that are as directly related to the progress of the initiative as you can make them.  There will be no discussions like, "Well, this metric is going the wrong way but we like what we're doing and we like the metric so we're going to stay on track and keep watching this metric."  You might have a discussion like, "We're still very early in the initiative so there hasn't been time for our activities to have the impact we want to see."  or  "Maybe we picked the wrong metric if we're certain that our activities are having the impact we wanted as shown by other evidence."  But you're not going to pick metrics that you ignore because, in the end, you don't really think they will correlate to the agile initiative.

I have metrics I like, metrics I don't like, and metrics that I'm indifferent about.  I usually let clients choose their own set of metrics with a good bit of input from the consultant.  This means the final set of metrics is usually a combination of measures that I like, don't like, and am indifferent about.  In the end, though, the measures are the client's measures so they have to select a set they are comfortable with. 

It's important to note, too, that the initial set of metrics isn't written in stone.  Metrics can be dropped that don't work well while new ones can be added. 

Metrics that I like
Set up and changeover times. 
Equipment availability, equipment up time
Tooling availability
Inventory turns
Cycle times all sorts, turnaround times of all sorts
Scrap
Customer Service (on time delivery, shipment accuracy, fill rates)
Vendor Service (same as above)
Safety performance

Metrics that I don't like
Costs of scrap
Costs of inventory
Individual Efficiency rates
Any measure that's difficult to explain or understand

Metrics that I'm indifferent about
Budget performance
Performance against efficiency standards
Any measure that's in the form of  a ratio or percentage of Actual Performance to Standard Performance (Actually, I don't like them at all but they're very common and I've learned to live with them.)
Measures of activity (how many times we perform some activity or how often)
Production or shipment quantities (how many parts we make or ship in a day, etc.)

As you read the list above, remember that I'm talking about metrics that will be used to assess the progress of the agile initiative not, in particular, metrics to assess the financial or market strength of the company.

More in  my next post.