Definition: What are Lead Time and Cycle Time?
The Lead Time measures the time from the moment the customer makes a request to the time they receive something. The Cycle Time measures the time it takes the development team to work on the request and deliver it. This means the Lead Time includes the Cycle Time (see visual below).
Objective: Why should you measure Lead Time and Cycle Time?
Both are good indicators of a team’s ability to deliver value to their customers. A one-time measurement has limited use because it does not necessarily tell you a lot. It is the same with most metrics e.g. a one-time NPS measurement does not tell you a lot either. Over time and through continuous measurements, one can see whether a team is improving in its ability to deliver value to customers.
The ultimate goal is to reduce the lead time as that is something valued by customers. A reduction in cycle time can be of help e.g. through focusing the team on finishing things before starting new things by introducing Work-in-Progress Limits. In many cases though there are some pretty big levers you can pull before a team starts working on the request e.g. prioritizing properly, engaging in collaborative discussions with customers to enable faster refinement of requests, etc.
Responsibility: Who introduces Lead Time and Cycle Time?
Initially, the Scrum Master / Team Coach / Agile Coach can introduce the concept of Lead and Cycle Time and also do the measurements. Several tools do these measurements automatically, though we believe it is helpful to put the numbers on the physical Kanban Board / Sprint Backlog, too. Later, the Development Team should take ownership of the metrics they use for assessing whether they are improving or not.