Flow Efficiency – The Most Important Metric When Developing Software?

Developers use many different metrics to measure code health, team productivity and delivery progress. Code coverage, Velocity, Cycle Time and Change Failure Rate are all good examples. However, in my opinion and experience, Flow Efficiency of software development processes is an infrequently used metric which offers the most significant insights of all. That is, how efficient (or inefficient) are you, your team and your organisation at building products and delivering value to your customers.  

If an organisation experiences success, growth usually follows. Additional people and dependencies create new inefficiencies in your delivery system while previous inefficiencies grow exponentially. As you scale, your ability to identify waste and friction so that you can optimise workflows is critical. It is key to significant gains in productivity and effectiveness. This is why I rate Flow Efficiency so highly. In this article, we’ll delve into what it is, how to calculate flow efficiency, and the myriad of benefits it offers.

Understanding Flow Efficiency

Flow efficiency of software delivery is a measure of how smoothly and swiftly work moves through a system or process, without unnecessary delays, bottlenecks, or interruptions. It focuses on maximizing the value-added time within a workflow while minimizing non-value-added activities such as waiting or unnecessary handoffs.

At its core, flow efficiency seeks to streamline the entire value stream, from initial input to final output, by optimising every step of the process. It emphasises continuous improvement and the elimination of waste to create a seamless flow of work from start to finish.

How to Calculate Flow Efficiency

The lean management principle of flow efficiency, emphasises the elimination of waste and the pursuit of continuous improvement. Key components of calculating flow efficiency include:

1. Visualising the Workflow: The first step in improving flow efficiency is to map out the entire workflow, identifying each step in the process. Visualising the workflow helps identify areas of inefficiency and opportunities for improvement.
2. Work & Wait Time: Many organisations have a tendency to only map work stages in the workflow. Examples of work stages are In Development or In QA. The work item is progressing in a work stage. With Flow Efficiency, it is also critical to map the non-working stages. For example, work rarely goes from development straight into QA. Usually, it goes into a Ready for QA state. This is a waiting stage. No progress is being made on the work item.
3. Take timings: Follow a work item and identify how long items spend in each step of the value stream. Flow efficiency is the percentage of overall time that was spent in work states. So, if 10 items spent 200 days in the value stream, and 80 days were spent in working states, the Flow Efficiency for these 10 items would be 40%.
4. Identifying Bottlenecks and Constraints: A result like 40% is screaming one big question. Where did the other 60% go? Here is the good news – The answer is in the measurements we took in step 3. This data will help to identify bottlenecks or constraints that hinder the smooth flow of work.
5. Measure the System: Measuring a single work item can be interesting but rarely reveals much about the health of our delivery process. Ideally, we measure many, if not all, work items and review the averages. This will reveal the details of how our delivery process is performing at a system level.
6. Iterative Improvement: None of this is a one-time fix but rather an ongoing process of continuous improvement. Teams are encouraged to experiment with different approaches, measure their impact, and make adjustments accordingly to optimize flow over time.

Benefits of Flow Efficiency

Focusing on the flow efficiency of software delivery processes offers numerous benefits to organisations and individuals alike:

1. Increased Productivity: By minimizing delays and optimizing workflow processes, flow efficiency enables teams to accomplish more in less time, leading to increased productivity and output.
2. Faster Time-to-Market: Streamlining the flow of work reduces cycle times and enables faster delivery of products or services to market, giving organizations a competitive edge.
3. Remove Developer Burnout: Terms like increased productivity and faster time-to-market usually make developers flinch as they assume it to mean “work harder, work longer”. However, core to Flow Efficiency is the concept of “measure the work, not the worker”. It’s about tweaking the delivery system, not people.
4. Improved Quality: By focusing on value-added activities and reducing defects and rework, flow efficiency helps improve the overall quality of outputs, leading to greater customer satisfaction.
5. Better Employee Engagement: Empowering teams to participate in continuous improvement initiatives fosters a culture of collaboration, innovation, and ownership, leading to higher levels of employee engagement and morale.
6. Cost Savings: By eliminating waste and optimizing resources, flow efficiency can lead to significant cost savings for organizations, including lower operating expenses, and improved resource utilization.

Conclusion

Did you think that 40% Flow Efficiency in the example above was very low? I have measured this in several growing organisations. 47% is the best score I have seen for a first reading. Some were significantly lower than this. It is very likely that your organisation will have a similar score. As you read this, you may have the urge and desire to prove me wrong. The thing is, a low score is interesting and exciting from a certain perspective. It means that you have a significant improvement opportunity right in front of you and the data is giving you significant clues as to where you should start.   

Flow efficiency is a powerful concept that can transform the way organizations operate and individuals work. By optimizing workflows, minimizing waste, and fostering a culture of continuous improvement, flow efficiency enables organizations to achieve higher levels of productivity, quality, and innovation, ultimately driving greater success and competitiveness in today’s dynamic business landscape.