What's the Right Metric for Innovation?

This post was originally published on TABBForum on March 24th, 2021.

“If management sets quantitative targets and makes people’s job depend on meeting them, they will likely meet the targets – even if they have to destroy the enterprise to do it.” - W. Edwards Deming

Deming was best known for being the architect of Japan’s post-World War 2 industrial transformation which changed the country into a global manufacturing powerhouse. Now that we are in the age of software, the research is clear: companies that are good at delivering software with both speed and quality have a distinct advantage over their competition. In fact, the 2019 State of DevOps Report goes as far as to say “our highest performers were twice as likely to meet or exceed their organization’s performance goals.” The report and its companion book Accelerate go on to identify four key metrics as key indicators of that ability: deployment frequency, lead time for changes, change failure rate, and time to recover.

So all we need to do is instruct our teams to measure and optimize for those metrics and we will be twice as effective as the competition right? That would be nice, but not so fast. Michael Ciccotti explains “This question is exactly why the book recommends not adopting metrics until you have the culture to support it. In all cases your behavior should be outcome based, not metric based, but in a command-and-control culture, metrics will drive behavior.”

We know from the DevOps movement that organizations that have a Westrum Generative culture where people are empowered will outperform rigid command and control hierarchies. The US Navy attack sub Santa Fe is well known for its transformation from being a poor performer to achieving the highest ratings ever after switching from such a hierarchy. In an organization where people that are closest to the work are empowered, innovation can come from anywhere.

When those people are in a culture that enables both the four key metrics above as well as allowing them the freedom to run experiments, be those with process, product, or money saving techniques, it creates a culture of innovation. A culture where innovation is both celebrated, rewarded, and encouraged. At that point, the metrics enable them to experiment quickly and safely, key tenets of the international DevOps movement.

By putting these systems in place that facilitate innovation we need to worry less about hiring “rock stars”, “rainmakers”, or “gurus”. Instead we facilitate an environment where every employee can do the best work of their lives. It is this repeated ongoing ability to get small improvements that becomes an overwhelming tsunami as they stack. For anyone who has seen the movie Moneyball, it’s base hits and not home runs. If your organization has some “rock stars” who hit home runs every once in a while, while mine has dozens, hundreds, or thousands of people who continually and consistently get on base, we will win the game every single time. Who are the most innovative organizations? The Amazons, the Googles, the Netflixes, of the world who have created environments where their teams hit consistently and repeatedly.

Being able to move quickly and with agility as an organization is where innovation arises. Instead of obsessing over metrics, it’s important to embrace _kaizen _principles and get better over time. The metrics are not the target, the business objectives are. What’s the point of spitting out the most lines of code, or having the most code commits, if we spend eight months building the wrong thing? If our competition course corrects after three weeks, we’re going to be at a distinct disadvantage. Deming cautions “I achieved my goal but not my aim. That happens a lot, we honestly translate aims to goals. And then we do stupid things in the name of the goal that get in the way of the aim. We forget the aim sometimes and put the goal in its place.”

The aim is to win in the marketplace, not to have the best engineering metrics. Get good at delivering software. Get overwhelming base hits. Innovate.