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Performance Goals For Agile Teams

Inspired by Jon Katzenbach and Douglas Smith's book The Wisdom of Teams, Mishkin Berteig looks at the importance of performance goals for driving a team towards self-organization and accountability:
The Performance Goal is a specific, measurable, challenging goal that is given to and/or adopted by the team. It is a statement or description of a goal that answers "why?" and "what?" questions, but specifically avoids answering "how?". It is not a description of activities, it is a statement of desired results. The team is left with the full authority to answer "how?" and implement it.
Beyond this, Mishkin goes on to state that a team's performance goals must lead towards results which are meaningful to the team:
In an Agile Work environment, the starting point for a performance goal is simply the delivery of valuable work at the end of their very first iteration... However, simply delivering value at the end of each iteration is probably not going to sustain the development of a high performance team for very long. Rather, the overall objective or goal of the project has to be important and compelling.

The importance of performance goals as an organizing principle for teams resonates across fields, from jet engine assembly to professional basketball. The problem, says Mishkin, is when a team is given goals without the autonomy to decide how they will achieve those goals:

In this circumstance, someone external to the team has stepped over the boundary of "why" and "what" and also included some "how" in the team's goals. The team is not even allowed to consider the possibility that something might work just as well and be much less expensive. Not only that, but the stakeholders haven't even really stated "why" the system is being built and so the team can't evaluate technology choices. There is no standard around which to self-organize.

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