McKinsey’s report “Yes, you can measure developer productivity” has caused a strong reaction in the engineering community. As an experienced engineering manager I have made it my job to read McKinsey’s report and the response to it.

The report’s conclusions are tempting and it comes across reasonable. It talks about the collaborative nature of software development, leverages industry recognised metrics such as DORA and SPACE and even warns about the perils of misuse. Yet there is something about its approach which feels regressive. So what is the problem?

“Eliminate exhortations for the workforce asking for new levels of productivity” - Deming’s 10th principle of management.

McKinsey’s report falls instantly into this trap. It misleads the C-Suite into believing that developer productivity can be controlled by prescribing of a set of specific metrics on the engineering function. And it completely misses the truth, that metrics are only a tool. And that true engineering excellence comes from having the right engineering leadership who are empowered to cultivate the right culture.

Why is Developer Productivity suddenly so important?

The last decade has witnessed a technology gold rush, driven by the proliferation of ‘digital native’ companies and accelerated by the challenges posed by the COVID-19 pandemic. As organizations emerge from this era of digital transformation, they find themselves in a new landscape where their IT functions, once relegated to backend support, have evolved into integral engineering departments embedded throughout their business models. What’s more, despite the recent tech layoffs, the size of these engineering departments is growing at an unprecedented pace.

It’s no surprise that McKinsey has responded by offering a set of tools to ‘manage’ these increasingly complex engineering departments through the lens of crude metrics. The C-Suite, now discovering they are blind now engineering has replaced business operations as their strategic execution engine, seeks to measure developer productivity, desperately searching for answers to an urgent problem—how to navigate this transformation and ensure business success.

McKinsey’s Metrics-Driven Approach

McKinsey’s report is great news for engineers as it is a testament to the growing recognition within the C-Suite of the business-critical nature of high-performing engineering departments.

However, the model proposed by McKinsey may inadvertently take organizations back to an era of poor management. McKinsey’s report fails to take heed on its own warnings. Engineers, drawing from their experience, argue that this approach is a step in the wrong direction.

Learning from past mistakes

To understand why McKinsey’s approach might falter, we need to look back to the 1980s when US and European businesses faced an existential crisis from Japanese manufacturers. Western companies, having deemed manufacturing a ‘solved problem,’ proliferated methods from the pre-war era pioneered by General Motors. In contrast, the Japanese, having rebuilt their country from scratch, rewrote the rule book on manufacturing and disrupted established brands by producing faster, cheaper, and higher-quality products.

A wave of ‘Lean Transformation’ swept through America, as companies implemented the Japanese methods now rebranded as Lean. However, the Japanese continued to crush the competition because too many companies missed the vital element—the culture. This is the very mistake McKinsey is repeating. Metrics and methods are essential, but as the saying goes, “It’s the culture, stupid.” Without cultivating the right culture, we cannot expect meaningful impact on the business.

The role of leadership

Deming’s wisdom echoes through time: “Quality is made in the boardroom.” While McKinsey provides a solution to the measurement problem, engineering excellence is not a problem of having the right metrics; it is a problem of leadership. We must avoid the pitfalls of the past and empower the boardroom and the C-Suite to foster exceptional engineering leadership, creating a competitive advantage.

Just as in manufacturing, the temptation to skip changing culture and leadership is because creating cultures of engineering excellence is hard. Really hard. It requires a combination of engineering instinct, organisational systems, people management and strong role models. It’s not just about improving the productivity of engineers who work on the coal face. It’s about hiring the best engineering leaders who can enable that.

To create cultures of excellence engineering leaders must know how to instill passion for their craft and know how to “remove barriers that rob people in management and in engineering of their right to pride of workmanship” (Deming’s 12th principle of management). The engineers they lead must have faith that their leaders are advocates for them, liberating them to deliver better, more impactful solutions.

Experts Leading Experts

The highest performing companies in every industry, like Apple, adhere to the principle of Experts leading Experts, recognizing that it’s easier to train an expert to manage effectively than to train a manager to be an expert. Research supports this approach across various industries, from business to healthcare and education. Deep expertise leads to better decision-making, effective communication, and career growth.

Amanda Goodall’s research explains why “if your boss understands the nature of the work, then they can actually help you. They can assess you well, and they can encourage you in the right direction to advance in your career, and that is a very important element for job satisfaction.”.

Metrics can’t replace expertise

Metrics are important. They create feedback loops to help you set direction and identify progress, they provide diagnostic information to understand side effects, they provide signals to spot unintended consequences or exciting new opportunities.

Leaders and engineers alike need metrics. They create transparency and enable a shared understanding. Gergerly Orosz and Kent Beck’s response to McKinsey’s report has great examples of how engineers can use metrics effectively.

The problem with McKinsey’s report is not with the need for metrics. It’s not even whether they are using the right or wrong metrics. The problem is it misses the need for capable engineering leads and engineers who have developed the deep instinct to understand how to use a metric appropriately, when to take it seriously and when to ignore it. And most importantly, how to develop that intuition throughout the engineering organization. Data is fantastic but you need humans who can use data to make good quality decisions.

Think about all the things your car measures. Speed, fuel, revs, oil, temperature etc. These are all indicators that your car is working correctly. And you want to keep them within reasonable boundaries and act on them when they move outside.

The problem is when metrics are used as targets not indicators. Targets destroy culture. As a driver you need those indicators, but reporting them up to management so they can set targets on them removes autonomy and judgment. When you are trying to get somewhere, you don’t make having a fuel tank of petrol your target. It’s nonsensical, it would result in people doing stupid things. As the driver you have enough knowledge and experience to know when to fill up your car. And you don’t just use the fuel gauge to make that decision. You are using a lot of other information too (price of fuel, optimum point to refill, whether a detour is required).

So a big part of management, and measurement, is knowing what measures are indicators (or signals) and what they indicate. And trusting others to know how to act when they look wrong.

And that requires expertise, experience, intuition and instinct. And you cannot replace those things with measures.

A call for change

Engineering has caught the attention of the C-Suite and as the engineering community we must equip organisations with the tools and thought leadership to:

Cultivate sustainable cultures of engineering excellence
Foster the growth of future engineering leaders

To achieve this, we must elevate Engineering Leadership to a critical role within the C-Suite, empowered to drive business impact and serve as role models for aspiring engineers.

Breaking down barriers and dispelling stereotypes is crucial. Negative perceptions about engineers and a culture of contempt for management hinder potential engineering leaders. Having navigated this journey myself, I understand the fulfillment and impact of empowered engineering leadership roles. I’m here to encourage and support others on this journey.

Leadership over metrics

While there is value in the items on the right, we value the items on the left more.

Engineering excellence is deeply rooted in culture and leadership. McKinsey’s metrics-based approach, while well-intentioned, risks repeating historical mistakes. We must focus on nurturing cultures of excellence, where experts lead experts, and metrics complement expertise.

The engineering community has a unique opportunity to shape the narrative and empower organizations to thrive in this post-digital world. It starts with leadership, culture, and a shared commitment to investigate and understand what truly drives engineering excellence.