Create meaningful enterprise performance metrics by having development teams create and validate correlation to business purpose.
KPIs, enterprise performance metrics and scorecards - while well-intentioned - are typically created by senior leadership (and expensive consultants), cascaded down to the lower layers of the organization and viewed as an accurate way to assess progress towards strategic objectives.
The problem with this approach is that not only does this invite "gaming" and other destructive behavior from employees trying to appear favorable in relation to the metrics, there is also little ownership around the measures which negates the idea of a unified 'one purpose - one company' approach. Ultimately, the metrics do not measure what they are intended to, producing waste in the best case scenario and driving poor strategic decision-making at worst.
One way to solve this problem is to have senior leadership focus on the purpose and leave their involvement to that level of strategic definition. Development teams are then invited to collaborate in this activity by coming up with objective metrics that will provide tangible evidence of whether or not the organization is making progress towards the given purpose.
Once these initial metrics are defined, additional development teams are invited to hack the metrics and demonstrate how they can be "gamed". At that point, the teams (originators and hackers) come together and collaborate to create new, refined metrics that not only prevent gaming, but show proven progress towards the purpose defined by senior leadership.
These refined, battle-tested metrics will not only be more relevant and meaningful in measuring progress towards a purpose, they will also be less prone to gaming and will include a sense of ownership among the developmemt team members.
The practical implication of this approach is that senior leadership will invite a few development teams to be included in discussions around strategic direction and purpose. This does not have to take weeks - a few days' worth of workshops should be plenty if senior leadership already has worked out a crisp strategy. Yes, some development teams will be removed from creating product work for a few days, but the implication is that they will now help create metrics and measures that will benefit the entire organization.
Start with a simple purpose and invite developers to come up with meaningful metrics.
Say the purpose relates to 'increasing productivity", what would be a good metric to help measure this important goal? One development team may come up with easily measurable things such as 'lines of code'. Another team will hack this metric, stating that having lots of lines of code is a faulty measure of productivity and could in fact be directly harmful to innovation and agility. So they come up with an alternative metric - "number of production-ready releases in a month". This metric is then hacked to ensure that releases have a real business value (a paying customer) and is simply not releases of code for the purpose of releasing code. You see where I'm going - after a few iterations of this, the organization will come up with a few truly meaningful metrics that senior leadership and development teams can feel strong ownership of as a collective.
This idea is spawned from thinking outlined in core lean and agile principles.
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