Why it’s a really bad idea to use velocity as a metric for team performance

If you are in software development and work within an agile framework it is very likely that you have crossed path with the term velocity.

Being a business leader or project leader, it is indeed tempting and easy to use velocity as a metric of team performance.

However, there are several reasons to why you shouldn’t, really.

Connecting velocity & performance

So, what’s the point of measuring velocity in the first place?

The point of velocity is to have a measurement that can inform a forecast for upcoming sprints and releases. Nothing more, nothing less.

Even so, it has become commonplace to use velocity as an indicator to whether the team did a bad, decent, great or awesome job.

Many business leaders or project leaders might ask

What was the velocity? How did the team perform?

The conclusion many then draw is to connect high velocity with great team performance and then low velocity with poor team performance.

It’s very tempting to draw that conclusion, considering the term velocity in so many other aspects in life relates to performance.

With one life example being that the speed, the absolute velocity, of a car is very related to how well the engine performs, right?

So, what’s wrong with that conclusion? Why not use velocity as a metric for team performance?

Meaning of velocity

To understand why, we need to understand the meaning of velocity and which different variables that influences it.

Velocity definition, close-up:
The sum of the originally estimated work efforts of all completed work packages during an interval, like a sprint or a release.

You have the team performance and then also the team estimates.

So, what does a high velocity really mean?

It means that either you had a great team performance or that estimates were oversized. Often, it’s a mix of both.

However..

You can also get a high velocity even when the team isn’t performing well, as long as the estimates are large enough.

And you can also get a low velocity when the team is performing really well, if the estimates are too small.

That’s why velocity cannot, really, be used to draw conclusions on whether the team did a poor or a great job.

Drawbacks

And the drawbacks if you use and communicate velocity as a metric for team performance is that you are likely to lose productivity in the following ways  

Morale suffering

Teams can find themselves unfairly assessed.

They might have done the best job of their lifetime, maybe even spent overtime hours and then hear from a manager or business leader that their team performance was poor on basis of low team velocity.

When this happen, and the low velocity originated from lack of quality estimates, it erodes trust. With a growing trust gap between the team and the leadership, the team morale suffers. This eventually leads to a decreased team performance.

Blowing up estimates

When teams recognize that their performance evaluation is reduced to be a velocity assessment, they are likely to connect the dots and can in frustration compensate by blowing up the estimates.

This leads to larger estimates and indeed higher velocities.

However, in combination with Parkinson’s law (“Work expands so as to fill the time available for its completion.”) the larger estimates will eventually lead to decreased team performance.

To avoid decreased team performance

To not get a decreased team performance, as your intent is actually the opposite, you should ensure to avoid using velocity as a metric for team performance.

If you are

.. a business leader, make the choice to measure team and individual performance through other means than velocity. It will earn you trust from your teams and their project managers.

.. a project manager, embrace the mission to explain to other managers, peers and colleagues of why it’s a really bad idea to use velocity as a metric for team performance – when you encounter it. Show how velocity is better used to inform future forecasts, by increasing predictability of plans.

.. a team member, invite to a conversation with your team leader. Share your concerns of how connecting velocity with team performance can decrease your productivity.

Let’s connect

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Yours sincerely,
Magnus Isaksson ( magnus@metrictale.com )