Shifting from Output- to Outcome-Based Metrics for Agile Teams

For agile teams wanting to shift from rituals to results, simple AI tools can help create 3 key types of outcome-based metric to track and accelerate progress

Business agility is a hugely important attribute for any company, and a key goal in rising above creeping bureaucratisation and cultivating accountable, self-managing teams.

But capital-A “Agile” has become too focused on rituals and methods over the years, and has sometimes drifted away from a focus on simple, practical ways of working and towards obsessing about the process rather than the results of work.

Number of sprints, sprint velocity, task completion, etc. are all fingers pointing at the moon, not the moon itself, so to speak. What matters is results.

As a result, we are seeing a shift from tracking only output-based metrics towards outcome-based metrics to guide the growth and progress of agile teams.

This transformation can be accelerated by the integration of narrow AI tools — such as predictive analytics, natural language processing (NLP), and generative AI — which can help teams refine how they prioritise, measure, and achieve results. AI doesn’t replace human decision-making; rather, it augments it, creating what my colleague Lee Bryant describes as Centaur Service Teams: hybrid models that blend human insight with AI-driven precision.

In this edition, I will explore how teams can transform their ways of working, with a focus on delivering tangible outcomes that align with broader business objectives. I will look at how to use three related management techniques to achieve this, and consider how simple AI tools can be used to implement them:

• Smart OKRs

• North Star Metrics

• Impact Mapping

Key Principles of Outcome-Based Metrics

Shifting to outcome-based metrics requires Agile teams to focus on the impact of their work on business objectives, rather than just output. By following these core principles, teams can ensure their efforts are better aligned with organisational goals and deliver meaningful value:

• Strategic Alignment and Customer-Centricity: Outcome-based metrics should be directly tied to broader business objectives and customer impact. Metrics that measure success in terms of customer satisfaction, retention, or market growth ensure that Agile teams contribute to both organisational success and customer value.

• Value Over Volume: The focus should be on the value delivered rather than the quantity of work completed. Teams should measure success based on how well their outputs drive tangible benefits, such as increased user engagement or revenue growth.

• Timely, Actionable Feedback: Metrics must provide actionable insights through rapid feedback loops, allowing teams to adjust their course based on real-world results.

• Transparency and Accountability: Metrics should be transparent and shared across teams to foster collective accountability. When teams have a clear view of their goals and progress, they can collaborate more effectively and maintain focus on delivering key outcomes.

• Simplicity and Continuous Improvement: Focus on a few key, simple metrics that are most indicative of success, avoiding over-complication. Regularly review and refine metrics to ensure they stay aligned with business objectives and evolving market conditions.

When agile teams (especially non-technical agile teams) focus on principles over explicit rules, they can foster greater ownership and accountability, as they are free to tailor their approaches to deliver value while staying true to overarching principles.

A Common Starting Place: Objectives & Key Results

The shift towards outcome-based metrics is as much about mindset and understanding as it is about methodology. Shifting Agile metrics like velocity, burn-down charts, and cycle time to reflect business outcomes, such as increased customer retention, market share, or revenue growth is good start.

Many teams start with OKRs (Objectives & Key Results) because it provides clarity and focus, helping them define clear objectives and measurable results that align with broader organisational goals.

How can a team improve OKRs with AI?

As teams look to refine their Objectives & Key Results (OKRs), AI presents powerful opportunities to improve the way goals are set, tracked, and achieved. AI can help teams analyse data more effectively, identify patterns, and predict which objectives are most likely to drive meaningful outcomes.

Let’s look at two specific narrow AI interventions that a team could leverage:

• Generative AI can help automate the process of generating OKR summaries and tracking progress. Based on data collected from team activities, AI could provide predictive insights on whether key results are likely to be achieved by the end of a quarter.

  • Sample Prompts: "Based on the data from our task management and analytics tools, provide a progress report for each key result. Include metrics like task completion percentage, current performance against benchmarks, and whether we're on track to meet our objectives.”

  • "Simulate a scenario where our team’s velocity decreases by 10% for the next [time period]. How would this impact our progress towards achieving each key result? Suggest adjustments we should make to our OKRs based on this potential change.”

  • "Based on the data from our task management and analytics tools, provide a progress report for each key result. Include metrics like task completion percentage, current performance against benchmarks, and whether we're on track to meet our objectives.”

• Predictive Analytics can analyse historical data to forecast how achievable a set of OKRs might be, helping teams adjust their objectives mid-cycle if necessary to align better with actual performance.

Once a team has addressed shifting from traditional lagging measures towards a more forward looking metrics framework, they can create further alignment by moving upstream to set a more strategic North Star metric, and then downstream again to ensure that there is a clear link between a product, service or feature and it’s intended business impact, using Impact Mapping.

Let’s dive into how these two techniques help create a more aligned working environment for a team.