Willy, the CEO, was at his desk feeling very satisfied and confident as he read the monthly IT report. Everything was looking good, the report told him the development teams were really performing well and velocity was up yet again. Unfortunately, an email from Jackie, the CFO, disturbed his calm.
“I can see the IT teams are busy,” read the email, “but busy doing what? Can we get our changes delivered? They will save us hours of work every month. Why haven’t they been delivered? – Jackie.”
To see if he could resolve Jackie’s issues, Willy hosted a meeting between her and RJ, the CTO.
“Right, what’s the issue, Jackie?” asked RJ, keen to get the meeting started.
“RJ, every month I get reports telling me how many more points your teams have delivered.” Said Jackie, visibly frustrated. “In the latest one, you’re bragging about some of the teams delivering sixty points a sprint for the last three sprints. They may have delivered 180 points but I’ve seen none of my changes. Where’s my stuff?”
After some discussion between them, Willy decides the only way to resolve the situation is to get help from Colin, the Value Driven Software consultant.
Looking at the Sprint Reports, Colin sees that everything is measured in points and notes the third-party suppliers have increased their delivery quota by twenty percent.
“We pay our outsourcing partners on points delivered.” Explained RJ, “If they exceed their quotas, we reward them and if they don’t, we fine them. Using velocity to measure their performance is a good way of motivating them to deliver and we have systems in place to guarantee the quality of their work. You can see it’s working, as the velocity is improving.”
“What’s actually happening here is called point inflation,” said Colin, looking at them seriously. “Story points are not a measure of performance; they are simply used to predict how much work we can do in future. For example, if I did five crossword puzzles a day, I would have a velocity of five points per day and you might expect me to solve five every day. However, some crosswords are more difficult than others are and might be worth two points, others easier and only worth half a point. As long as there a relative weighting, you would still expect me to solve around five point’s worth of puzzles per day.”
Colin looked up to see if they were still paying attention, “Now it turns out, the only person who knows how difficult the puzzles are is me but you don’t care about that because you only care about them being solved. I can use my knowledge to tell you how difficult each one is and because you know how many there are, you can use that to predict when they will all be finished, just like a project. Do you follow?”
“Yes,” said RJ, “but isn’t that exactly what we’ve been doing?
“Not quite,” said Colin. “This all depends on my definition of ‘difficult’ staying the same and as long as nothing influences it, it probably will. However, if you were to offer me £1 for every point I complete and then ask me how many points each puzzle is worth, that probably will influence my rating. It may well cause me to say that what was previously one point was now two points and you would never know because I’m the only one who really knows how difficult they are.”
“Isn’t that a bit dishonest?” asked RJ.
“We call it gaming but it’s purely business,” said Colin, laughing. “What would you do if someone offered you a contract offering a pound per point and allowing you to define a point? Are you blaming them for your own folly?”
“Now you put it like that, it does sound like I’ve been a bit daft,” said RJ, ruefully. “Fortunately, we only sign-off three months at a time, so I can change the contract soon. I am so glad we had the sense not to sign up for more than that. I might have lost my job over this”
Colin smiled at him, “Consider yourself lucky you can get out of it, you won’t believe some of the contracts I’ve seen organisations tied into, three years is not unusual.”
Joining in the conversation, Janet said, “At least we’ve learned that velocity shouldn’t be used to measure performance and definitely should not be used to reward. I’m sure we’ll be much more careful about our contracts in future, too.”
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