February 26, 2025

How to increase Your Team’s Velocity and Efficiency

Sahil Battoo

Introduction to Team Velocity

As we all know that velocity is calculated by dividing displacement by time taken. i.e. the amount of work done when divided by time taken to complete the work, gives us the average velocity. However, velocity is different from speed. Velocity isn’t just about how fast something moves, it also considers the direction it’s heading. It tells us not just the speed of progress but whether we’re actually moving toward the right goal.

Whereas, speed measures how quickly something is moving regardless of direction. This distinction is important because, if two teams are moving in different directions or focusing on different priorities, they may have the same speed but different velocities.

Since velocity indicates deliberate progress toward an objective, it is more significant than speed. For example, in Agile, it is not sufficient to merely finish a lot of work quickly, rather, what counts is whether the work effectively contributes to the delivery of value (velocity). Teams can enhance planning, make better predictions, and make sure that efforts are in line with the results by monitoring velocity.

Agile teams work with the mindset of delivering the highest quality of work in each sprint. They do it while responding to changing customer specifications and market requirements. Velocity helps stakeholders and management to foresee what to expect from the future sprints and reflects the team’s capability to accomplish their job in a certain sprint/iteration. It’s a great tool that helps in determining project delivery dates and other milestone dates.

A team must reach the ideal velocity in order to maintain reasonable commitments, avoid burnout, and prevent underutilization. In this blog, we’ll define velocity, look at its components and provide helpful advice for optimizing it. Regardless of how seasoned a team is or how new they are to agile ways of working, understanding velocity can revolutionize the workflows of a team by providing clear, data driven insights.

Overview of Team’s Velocity

The core of agile teams is to deliver quality products which are as per the customer’s requirement and are up to the latest technology and market trend. They are able to do so by showcasing the developed product to the customer to seek their feedback so that those points can be incorporated in the further developments. The entire product is not developed in one go, instead, it is developed in iterations which aims at delivering a functional feature which can be used by customers to share their feedback.

Team’s velocity serves as a sort of compass for teams through the plan, do, check, act process. It is the velocity that determines the pace at which the team is able to or will be able to churn the work and convert the backlog to functional products. It helps predict future outputs, and is a measure of the team’s capability to deliver their work in the given sprint/ iteration.

Velocity is not a one-size-fits-all metric. In fact, the velocity of each team varies based on domain, complexity of workflow, team size, and team experience/ maturity of the team. It’s not an apple to apple comparison. So, it is wrong to compare the velocity of one team to another. Velocity should be used as an internal measure rather than cross-team. By analysing trends over time, teams can assess their progress, identify bottlenecks and align their velocity with project goals. To leverage it fully, one must understand velocity as a measure of capacity, not a measure of performance.

What Is the Team’s Velocity?

Velocity is one of the fundamental metrics in Agile development as it indicates how much work a team can deliver in a given time frame. Indicating how much work a team is completing over time, expressed in units like story points, hours, or actual work items finished, it gives insight into a team’s churning speed and efficiency. Velocity provides insights into how much we can deliver over a period and helps the team plan better.

Velocity is more than just a figure. It’s a measure of a team’s productivity, ability to work together, and capacity. It gives information about how well the team can convert backlog items into deliverables. Teams can more effectively plan sprints, set reasonable goals, and control stakeholder expectations by monitoring and evaluating velocity. Crucially, velocity is not a gauge of performance or productivity but rather a tool for improvement and making informed estimation on delivery of work.

If applied to simple maths, the average velocity per team can be calculated by averaging the story points burnt by a team in the last 3 sprints. i.e. sum of story points burnt in last 3 sprints divided by 3.

The Building Blocks of Velocity

1. User Stories

Since user stories are discrete work units that are in line with customer needs, user stories serve as the cornerstone of team’s velocity. A clear description of the task, acceptance criteria, and value it provides are all included in a well-defined user story. These stories are used by teams to schedule sprints and calculate the amount of work needed to finish them. The accuracy of velocity tracking is proportional to the quality of user stories, which guarantee that the metric represents actual progress rather than discretionary results.

2. Effort Estimation

Since effort estimation measures the amount of work needed to finish user stories, it is essential for figuring out velocity. Teams can avoid overcommitting and set realistic sprint goals with accurate estimation. There are two popular techniques for calculating effort viz time base and effort based.

a. Time-Based (uses hours)

Hours or days are used in time-based estimation to measure effort. Although this method is effective only for simple tasks, and is incapable of handling complexity and uncertainty. It works best for repetitive tasks that have set durations with no uncertainties. Teams should aim at automating such tasks.b. Effort-Based (uses fibonacci)Effort-based estimation factors risk, effort, and complexity instead of only time and is represented in story points. The teams use fibonacci series to give the weightage or estimate the effort. This technique is more advisable and gives greater accuracy since it factors for different degrees of uncertainty and complexity involved in completion of task and offers a more adaptable foundation for planning.Benefits of Team VelocityThere are various benefits of identifying a team’s velocity and using it for planning. These are discussed below:1. Improved Planning and CommitmentVelocity helps teams in making realistic commitments by giving them a clear picture of their capabilities. By understanding how much work a team can typically complete in a sprint, they can set realistic goals and efficiently plan their backlog. This increases predictability and ensures dependable delivery which in turn prevents team members from being overworked.2. Enhanced Transparency and ConfidenceMonitoring the team’s velocity gives its stakeholders insight into the team’s ability to complete the tasks and also enables them to forecast the team’s progress, and a ballpark project completion date. This is only possible if the team is relatively mature in agile ways of working and its composition has not changed.This also boosts better decision-making and building trust on the team, hence increasing transparency and building more confidence in the team, management and stakeholders.3. Basis for Continuous ImprovementPatterns found through velocity analysis over the time can help a team and guide them in process enhancements. To increase productivity, teams can find bottlenecks and even modify workflows. Teams can achieve sustainable growth in velocity and value delivery by iteratively improving their methodology.Increasing Team’s VelocityOnce the team has matured and its velocity has been stabilized, there are some ways the velocity of the team can still be increased. Here is how –

1. Defining Clear and Realistic Sprint GoalsSetting uncertain and unachievable sprint goals can hinder development and progress of the team on the other hand, setting clear and achievable goals guarantees that everyone on the team is aware of their objectives, which keeps the entire team focused and coordinated. It is always recommended to break more ambitious goals into smaller and manageable tasks that can be completed in a single sprint without spillovers to make the progress more measurable.2. Establish a Stable and Consistent Sprint CadenceThe secret of obtaining a dependable and reliable velocity is consistency. By creating a consistent sprint cadence, teams can develop rhythm and consistency in their work. Sprint length and structure should not be altered in between the project as this can affect team morale and velocity calculations.3. Focus on Impediment RemovalProgress can be halted by obstacles such as ambiguous requirements, dependencies, or technical problems. Maintaining velocity requires taking proactive measures to remove these obstacles. Give team members the authority to recognise and report obstacles, and make sure the leadership group or Scrum Master has the tools necessary to address them quickly.4. Reduce the Size of Work ItemsLarge tasks can potentially cause delays and can make things more complicated. Breaking up storylines into smaller, more manageable tasks improves story flow and makes tracking progress easier. With smaller tasks, teams are able to identify obstacles earlier and achieve more steady velocity. Completing these small tasks also gives them a sense of accomplishment, which in turn boost morale of the team members.5. Avoid Context SwitchingTeam members should aim at working on a single story at a time and committing to one task. Only once completed, a team member should pick another task unless the developer is blocked and is unable to move ahead with the task/ story. If one frequently switches between tasks, efficiency reduces and instead, cognitive load increases. Teams should always prioritize work and minimize any kind of distraction to maintain focus. By reducing context switching, team members can finish tasks more quickly and with greater quality, which eventually increases team’s velocity.6. Foster a Culture of Feedback and ImprovementCreate a culture where team members feel encouraged to share ideas and identify areas that require improvement by holding regular retrospective meetings. These meetings should be used by the teams to discuss velocity trends, recognize achievements, identify loopholes in the process, develop solutions for the team’s problems, etc.. It is observed when all the team members are open to take and give feedback freely in the right spirit, the team evolves towards maturity, enhancing collaboration and trust, increases accountability while improving performance which in turn results in sustained long term growth of the organization.7. Encourage Collaboration and CommunicationThe foundation of a team’s velocity is effective communication. Encouraging an atmosphere where team members can freely exchange ideas, work together to solve problems, and collaborate aids in increasing team’s velocity. Maintaining digital boards, having daily stand-ups and having an environment where people are able to collaborate and communicate freely, can improve communication and keep everyone on the same page.Common Misconceptions About Team VelocityMany organizations and even teams have a misunderstanding about team’s velocity which results in irrational expectations. We have listed some of the common misconceptions based on our experience in agile transformation services –

Thinking that higher velocity always translates into better performance is a common misconception. Velocity should not be used as a competitive metric because it actually reflects capacity of a team.

Another misconception is that velocity can be compared between teams, which is untrue because different teams have different workflows, estimation techniques, and maturity.

Finally, attempting to artificially “boost” velocity may lead to overestimation, burnout, or decreased quality.

To properly use velocity, it is essential to comprehend these myths and understand that velocity is a tool to understand the capacity of a team to plan the work.ConclusionTeam velocity is a powerful metric in Agile which helps them monitor their capacity and plan for the upcoming work. This metric helps them define realistic sprint goals which ensures the teams deliver what they commit. This in turn helps in increased predictability of the team.It is very important for management to consider velocity as the measure of capacity of the team rather than its performance. Always remember that velocity is unique to each team and should never be used for cross-team comparisons or as a sole measure of productivity. Misusing or misunderstanding velocity can lead to unwanted outcomes like having wrong expectations from the teams, burnout of team members, and sometimes compromises to quality as well.With this our blog on “Get the right velocity for your team” comes to an end and we sincerely hope it helps with necessary content for our readers. Please write to consult@nextagile.ai for any suggestions or feedback. Please reach out to NextAgile agile software consulting if you need any support in your agile transformation journey.Frequently Asked Questions About Get the Right Velocity for Your Team1. How can a team determine its optimal velocity?Teams can determine their ideal velocity and maintain high performance by tracking patterns over a number of sprints. If the team remains constant, I believe, the best way is to look at the average of the last 3 sprints velocity. Appoint to be noted – rather than maximizing productivity, the goal of velocity identification should be to support realistic commitments, high-quality deliverables, and continuous improvement of the team.

2. What are the signs that a team has the right velocity?The right velocity of a team shows how well the team balances speed, quality, and sustainability while producing tangible value, in addition to how much work they can accomplish.To determine whether the team is operating at the right velocity, there are a few characteristics the team should possess as per our experience in agile software consulting. These include –

Minimum fluctuation in the teams velocity and the team meets sprint commitments consistently without any scope creep, consistently.

There are no spill overs to the next sprint.

Team members are able to meet sprint goals without getting burnt out.

The team delivers high quality work where the delivered work meets Definition of Done (DOD) consistently.

The team focuses on delivering value at the end of each sprint, rather than focusing on output.

The team is improving in every sprint as they get more clarity on the project/ product being delivered.

The team’s morale stays high and they remain enthusiastic about the completed and upcoming work.

Stakeholders express confidence in the team in their ability to deliver the committed work.

3. How can teams adjust their velocity if it’s too high or too low?In both cases, the teams are not able to plan efficiently. If the velocity of a team is too high, it indicates that the team is over committing the work i.e. taking a lot of work to complete in a sprint. To fix this, the team should reduce the scope of work and review how they are estimating the work and pick up work for a sprint considering the team’s capacity. On the other hand if the velocity is too low, it indicates that the team is completing a relatively small amount of work in a sprint.To fix this, the team should look at breaking the big work into small chunks of work so that more work can be completed in a sprint and the work does not spillover to the next sprint. Also, they should pick the task after the external dependencies are cleared. Alongside, the teams can also experiment with the work in progress (WIP) limits.In both the cases, the teams should focus on conducting retrospective meetings at the end of each sprint to identify the drawbacks and ensure to improve them all.4. What impact does team velocity have on project planning?Velocity is an essential project planning input that helps teams predict timelines, manage stakeholder expectations and resource allocation. By estimating the number of sprints needed to complete a backlog and knowing their capacity, teams can guarantee realistic delivery schedules.Furthermore, velocity trends highlight potential risks such as capacity fluctuations or inefficiencies, allowing one to concentrate on implementing preventative measures if necessary. If the team maintains a consistent velocity, stakeholders feel more confident about the team which in turn increases the decision-making capacity of the team. Based on velocity, teams can modify priorities to guarantee that the most important tasks are finished first. This makes it easier for the teams to focus on providing high value even if the priority of work changes.5. How often should a team review its velocity?Teams should look at velocity during the final ceremony of a sprint, known as a retrospective. The story points burned over the previous three sprints can be averaged to determine the team’s velocity. Analyzing completed work helps identify what was successful and what needs improvement. Regular evaluation of velocity ensures the team is able to meet the sprint goals, monitor the trends, and identify the bottlenecks. Teams should evaluate its velocity in multiple iterations in addition to sprint-level reviews to spot long-term trends and make strategic adjustments to their workflows.

Sahil Battoo

Sahil is an Agile consultant at NextAgile. Sahil has overall 11+ years of experience as an Agile practitioner with 5+ years of experience in agile coaching. He has been part of two organization-wide Agile transformations and coached 35+ teams across geographies. His expertise lies in fostering “One Team” mindset, collaboration and flexibility to enable a high-performing team culture led by Agile ways of working.

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