Measuring productivity using Value Points

The major challenge for managers in 21st century is that of improving productivity of knowledge workers. The management in CDC Bangalore have also started working on this as they had an open feedback session recently.

Here is my proposal to improve productivity – I call it “Productivity Management Framework” or PMF in short. I am on a roll creating official sounding terms and acronyms 🙂 . Anyway,this framework can be divided into three parts – Measurement, Target,Reward

Measurement

Clearly, we need a way to measure productivity if we need to know if productivity is improving or not. I propose a new point system called “Value points“.

Managers of an agile team( DEV,QA and Doc) decide together how much a user story is worth to a customer and then assign a value point to it. This point has no relation to the effort required to complete a US. That is a US that is marked large could have 5 value points while a user story marked small could be worth 25 value points.
The criteria for setting points would be –
1) How important is the US for the customer? Does it help customers achieve something? Most features come under this and get high number of value points
2) If it is a bug resulting from a feature previously implemented by the team, then it does not have any value points assigned to it.This helps in ensuring that the quality of the feature implemented is also considered when the above system is used.

At the end of the year, we could just add up all the points a team achieves and that would be their productivity.

Target

Currently with velocity, the team itself decides on the size of the userstory and hence any target associated with the velocity will not work. The solution is to have the above  Value point targets for each team. There should be a target setting meeting with all managers and entire agile team present where this point target is set. This would be similar to how sales team get their sales target set at the beginning of the year.

Managers would also need to have a target. I propose that managers also have a value point target, but this target should not be a blind addition of all the points their teams achieve. The value point target for the managers should be at feature level. So, feature 1 is 25 points, feature 2 is 10 points and feature 3 is 10 points. This might correspond to 300 value points to the agile team but only 45 points for the manager. This would prevent the manager from giving more points to each user story just to meet his/her own target.

Reward

This is the most important part of the framework. Any productivity improvement initiative should have a buy-in from all employees. One way of doing this would be to have substantial bonuses to people who have achieved the target. If it were up to me, I would set up the reward system as follows –

Team – Every team would have a substantial amount set as bonus. If team achieves the target points, it gets the full amount else a partial or no bonus can be given depending on the company’s financial situation. Also, the bonus amount is same irrespective of number of people in the team. This encourages people to work harder to achieve the target with less number of people rather than hiring more people.
 It also encourages team members to help each other out to meet the target.

Possible issues

•Cumbersome process to assign points to all the user stories. Tracking them would be even bigger task as there is no inbuilt field in rally( the software we use to track). Tracking it in a separate tool would mean proper integration between rally and the new tool
•Issue resolution – The team might not agree with the value points associated to a US by the managers. This would lead to a very sticky situation.
•Meetings – People might complain about having too many meetings.
•Teams might change during course of a year. Managers can change during the course of a year. Need to think of ways to handle these situations.
The weakest point in the above framework is the measurement part. The value points assigned are very subjective and we cannot compare one set of value points( assigned by one set of dev/qa/doc manager) with another set of value points assigned by a different set of managers.

I am sure there are a lot of loopholes in this framework. What do you think are the major concerns in implementing this framework?

Post a day challenge – Who deserves more credit?

Who deserves more credit? hmmm… very interesting question. I can think of two sets, one in the business world and one in my life as a software engineer.

In business world, I feel TATA motors deserves more credit that it gets. Ratan Tata has invested in  in-house R&D way before other Indian automobile companies. The result is that Tata indica was the first truly Indian car. Also, the way R&D has progressed in tata needs to be applauded more. From the initial less-than-great Indica, they have moved on to awe-inspiring Tata Nano, which despite being the cheapest car in the world is able to pass EURO N-Cap test successfully.I would like to see Maruti or Hyundai cars do that…. Unfortunately Indian media likes to focus on the negatives rather than praising good engineering efforts. Just type “lamborghini” or “ferrari” car fire in google and you will get hundreds of images of these supercars burning. Yet, these foreign cars do not get any adverse publicity.

I just hope for the sake of innovation in India that Nano is a huge success. I wish that it becomes the best-selling car in year 2011.

On the software engineering side, i find that QA does not get the credit it deserves. Many people, including in my company, believe that testing is not skilled work. If someone leaves the company, he/she can be easily replaced with another person. However, I have been working with excellent people who have shown me what real testing is. The ability to test a piece of functionality in numerous different ways is true talent and skill that cannot be easily replaced. I also find that the more a person works on a product, the better the person tests.Most of the credit for a successful release will be hogged by the development team while QA gets only the blame if some issues crop up. The faster a company realises this, the better it is.

I realised this when we started working in agile. Scrum makes people work closely. Working closely helped me realise the skill that a good tester possesses. It helped our team realise what a big factor they are in the success of our team. So, the solution to “How to give people more credit” is work in agile mode. 

Who do you think deserves more credit? Let me know.

Gaming MBA

I was wondering how I got interested in management and business in general. The answer is quite surprising and most parents will not like it. The answer is – I played computer games.  

 Josh Kaufman had an idea of personal MBA. A set of books, when read and discussed with others would give the reader knowledge equivalent to an MBA. Is it possible to have a set of games which will aid in understanding management concepts? I do not think there is any such recommended set of games, so here is the world’s first “Gaming MBA” set –

SimCity – A City building simulation game

You can find the review of the latest version of the game here – http://www.gamespot.com/pc/strategy/simcity4/review.html

In this game you are the mayor of a huge plot of land they call a city. You have limited budget and you need to set up Residential,commercial and industrial zones so that people can come in and settle in your city. Once people start settling in you will be busy for hours together getting them electricity, water, entertainment and resolving traffic issues. You also have to set up police stations and fire stations to prevent crime and fires. All these while managing the budget of the city. Spend less on roads and you will soon see roads deteriorating. Increase taxes and people will soon start leaving.

If Bangalore’s planners had played the game they would not have had Electronic city phase-1-2-3 all in the same area. They would have learnt that creating a city in such a manner would bring massive amounts of traffic jam to the roads leading to the area. In the game no matter how many lanes I added or how many flyovers I built, I could never solve the issue. Only solution I found was File->New Game. So, Bangalore, best of luck!

What this game teaches –

• There are so many thing happening at the same time that it teaches you to multi-task effectively.
• Ability to concentrate hard for hours together without a break.
• Budgeting – If I increase taxes by 1 percent and reduce spending on new areas this year, the city could become debt free this year…
• Resource optimization – ooh… If I place the police station here, it can cover both the crime hotspots….
• Planning – Damn I should have kept a wider road to the industrial area… or I should have planned for a metro in the city… now traffic is out of control!

An alternate game which teaches the same stuff is Caesar. You can find the review here – http://www.gamespot.com/pc/strategy/caesar4/review.html

Age Of Empires 2

You can find the review of this game at – http://www.gamespot.com/pc/strategy/ageofempires2thece/review.html 

In this game you play a civilization and follow how they rose and in some cases fell in single player format. However, its true usefulness comes out when played in multi-player format. When you play against another human, you realise that there are multiple ways and multiple strategies that can be used to achieve the same goal. You can either have minimal defences and go on raids on the other players frequently or you could dig-in and build up your defences first before going out on an all-out attack. Multiple human players also bring in the possibility that you are attacking player B while defending against player C. You can also play collaboratively against other players. Truly a great games which teaches a lot.

What the game teaches –

• History class in school was never this interesting!
• There are multiple ways of achieving a goal. In corporate environment, you realise that what the other person is saying could also be right.
• Partnership and alliance building – Playing together against a common enemy. Helps you work together with other people  and other departments in the company.
• Resource allocation – Do you use your money to build defences or train a few soldiers? Do you spend money on R&D or on extra marketing during recession?
• Multitasking – You can attack someone while defending someone else. In corporate environment you would have to work on multiple projects.
• Helps you think out of the box. You could attack an enemy and get completely destroyed by his defences. Then you think…is there any weakness in his defences, is it possible to draw him out of his castle? All this helps in coming up with innovative solutions to problems faced int he corporate world.

Chris Sawyer’s Locomotion

 In this game you own a transportation company and you can provide either bus, tram train , ship or airplane transport services within the city or across cities.You must constantly look at the different cities and identify connection points and build roads or rail lines. An example: A coal mine and a steel factory can be connected with a rail line. A steel factory needs to be connected to a city to sell its goods. Two different cities can be connected by trains or planes. You must also constantly look at the profitability of these lines and vehicles as age and economy changes demand can either increase or decrease.

What the game teaches –

• Competition can be ruthless – You find a lucrative line, competitors will immediately have similar lines forcing you to reduce prices. Often competition can drive you to bankruptcy.
• Multi-tasking  – I think this is a common trait that is taught in all computer games
• Look out of technology change – If you are having a profitable business connecting two cities with your rail line and a competitor builds two airports, you will lose all your customers. This is very similar to what happens to most companies. Competitor comes up with a better technology and your once money spinner becomes a loss making venture.

Capitalism

You can find the review of this game at – http://www.gamespot.com/pc/strategy/capitalism2/review.html?om_act=convert&om_clk=gssummary&tag=summary%3Bread-review

In this game you own a retail outlet in one of the cities and you need to decide what to sell at these stores. You can buy these from nearby port or from manufacturing units in the city. However, soon you will need to get into manufacturing  or farming yourself to boost your profits and expand your kingdom. You can build a farm and sell milk or eggs in your store. However, you will soon learn that it is better sell manufactured goods. So, you can build a factory that buys eggs from the farm and sugar and manufactures cakes. Similarly you can get to the second level of manufacturing where the inputs are also manufactured goods. Ex: Silicon -> glass. Glass + flowers -> Perfume.

What the game teaches-

• Economics – Value addition is the most important source of money. Buy something, add value and sell it for profit. You will understand how Japan manages to be second biggest economy( now third?) while importing every single item.
• Supply Chain Management – If you have two factories producing perfume and only one factory producing glass, your perfume factories are going to starve.
• You will understand why Shopper’s Stop have their own brand of clothes. It provides them with more margin than selling some other brand.

Gazillionaire

This is the best kept secret of the gaming world. This game is the reason I am writing this post. In this game you own a shipping company. Your aim is to buy commodities from one planet and sell it at another planet for a profit.  You need to pay taxes, pay your crew members and look to constantly upgrade your ship to carry more cargo or passengers. Sometimes random events occur like the price of the cargo you are carrying suddenly plummets putting you in to loss. Also, there are  calamities that can occur while travelling between planets. There are also opportunities to break the law and make tremendous amounts of profits, but there is a chance that you will get caught and pay huge fines.

What the game teaches –

• How business works – There is a way to earn money by trading commodities. Better players make more money by playing the margins better. You also need to pay crew members and taxes to the government
• Insurance – Sometimes calamities like meteor hit or space pirates can attack your ship and you can lose all your precious cargo. You can choose to take the risk or you could pay insurance and not worry about calamities!
• Stock market – You can buy/sell shares at various planets. You can make huge amounts of money, but you can lose huge amounts of money if you don’t know what you are doing.
• Always help the needy – In the game, if you help the needy, there is a chance that the needy might turn out to be the emperor’s son in disguise and reward you.
• Never break the law – This game teaches you to do business ethically. There are ample opportunities to break the law and make money. But , just like in real life, you can get caught and face huge amounts of fine and shame.
• It teaches how to lead your life – Seriously. If you have to play one business simulation game, it is this. This game is being used in some universities and schools to teach business. You can get more details about the game here – http://www.lavamind.com/gaz.html

 

What do you think about my selection of top business strategy games? Have you played any of the games above? Do you agree with the learnings?Have you played any other games that you think should get added to the list?  Do comment.