First Principles of Engineering Metrics

All departments from Sales, Marketing to Product reports metrics to the CEO, except for Engineering Department!

I have worked with +1000 engineering teams helping them create a mature software engineering department.

In this blog, I’ll go over the first principle of metrics and which metrics you should be using.

How other departments select their metrics?

The answer is very simple.

What is the purpose of this department existing?

the answer to this question becomes clear by inverting the problem.

What work does a department needs to stop doing for them to get fired?

Let’s answer this for other departments

Sales Department

What work does sales department needs to stop doing for them to get fired?

Answer: If a sales team stops selling, they’ll get fired

There is absolutely no sales team that will not get fired if they stop selling. We got our answer.

Now we need to invert it back to get the metric we should be tracking.

What should I track for a sales team?

Answer: Amount they sold (Revenue)

So far so good. Let’s do another example with Marketing department

Marketing Department

What work does marketing department needs to stop doing for them to get fired?

Answer: Stop bring leads

This is a correct answer, but it’s missing. What if marketing department is bringing very bad leads? They’ll still get fired. So we need to add one more layer. They need to bring leads, but also ensure these leads can be turned into customers. If we add this to our answer we get

Improved Answer: Stop bringing qualified leads

Now let’s invert it again

What should I track for a marketing team?

Answer: Marketing qualified leads (MQL)

Each department track dozens of metrics from Win Rate to Response Time. These metrics are called Leading Metrics

• Leading metrics tell a small part of the whole story.

• Leading metrics are helpful to understand how we can optimize our operations further

• Every department should track leading metrics, with the purpose of improving the main metrics.

What should engineering departments track?

Let’s ask the same questions in order.

What work does engineering department needs to stop doing for them to get fired?

Answer 1: Stop delivering code

Answer 2: Deliver code that doesn’t work

Answer 3: (optional) Deliver code too late

So if we reverse these we’ll answer the purpose of the engineering department.

Deliver working code on-time

Breaking this down further

Speed: Deliver

Quality: working code

Predictability: on-time

Engineering team have 3 responsibilities. If any of them are lacking, that team is not doing their job.

If an engineering team is doing all 3 of these responsibilities at a level the organizations expects from them - they are doing their job.

An engineering team succeeds if they deliver working code on time.

Now we know what an engineering team should track

• Speed

• Quality

• Predictability

To learn tactical advices on which metrics should an engineering department track message me at [e-mail]

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Notes:

• Some engineering teams do not have a requirement for on-time.

• Tracking predictability is more useful for organizations with deadlines. (ex: sales led organizations where not delivering equates to lost deals)

• For all other types of organizations, predictability is a leading metric rather than the main metric.