Velocity and Throughput Accounting

Tom Breur

21 December 2014

Measuring “Velocity” in Scrum projects is a bit controversial. My guess is that people’s reservation against measuring it, stems largely from the way projects might get (mis-)managed. If the result of striving for higher Velocity “simply” leads to inflation in Story Points, clearly that’s a stupid way to use it. Unfortunately, this scenario isn’t uncommon…

If we can leave these silly management practices aside (staying aware of the dynamics behind it), I think there can still be genuine value in looking for a manufacturing equivalent of “number of items produced per day”, if only to help the team reflect on their performance over time. But looking at Velocity has an other interesting side effect. It makes you focus on the flow of products coming out of a system.

I vividly remember the aha moment when I finally “got it”: by switching to this flow vantage point, I realized how misleading a traditional industrial (batch oriented) mindset can be. Somehow, we are brought up thinking it will be efficient to work or produce in batches. I certainly was.

This comes back to Drucker’s distinction between efficiency and effectiveness: “Efficiency is doing the thing right. Effectiveness is doing the right thing.” There’s no point in polishing a batch, until you have proven the outcome meets required quality standards, and is of value to your customer. By employing single piece flow, you will get that feedback (a lot) quicker.

In this slide deck from a keynote on Throughput Accounting and monitoring velocity, I pointed to the counter intuitive Agile practices that become “obvious” once you see how they contribute to effectiveness. Several topics on slide 3 and 4 might require an “aha” moment to be appreciated.

A long distance open water swimmer needs to sight frequently, and it is rather straining to constantly lift your head out of the water to check your bearings. This may seem like a “wasted” effort (unless you have followed someone else in the wrong direction, like me). Frequently lifting of your head may seem inefficient, a waste, but it is paramount you put in that effort to ensure you continue to be effective!

By the same token, frequently checking the validity of your work by decreasing the batch sizes (maybe even switching to continuous flow?) will go a long way to help you rethink how “efficient” apparent waste can be. Because I am sure you truly care about your effectiveness!