Streetlight Effect

Streetlight Effect (Looking under the Lamppost)
Image: Jono Hey, Sketchplanations

The Streetlight Effect is a cognitive bias where individuals or organizations focus on what is easiest to see or measure rather than what is actually important. The name comes from the old anecdote of a drunk man searching for his lost keys under a streetlight; not because that's where he lost them, but because that's where the light is best. 1

In Agile organizations, this effect manifests when teams prioritize easily available data, superficial metrics, or comfortable processes while ignoring deeper, more meaningful insights. This can lead to poor decision-making, misalignment with real business goals, and an illusion of progress.

Impact on Agile Organizations

  1. Misaligned Metrics:
    • Teams may focus on velocity, number of user stories completed, or Sprint commitment accuracy, instead of business outcomes like customer satisfaction and product value
  2. Illusion of Control:
    • Leaders may believe they have a clear picture of progress because of frequent reporting, but they may be missing underlying issues.
  3. Poor Problem-Solving:
    • Teams may focus on easily visible bottlenecks (like backlog size) while ignoring systemic issues (like unclear strategy or lack of collaboration).
  4. Resistance to Change:
    • Organizations may stick to outdated Agile practices that seem effective rather than experimenting with newer, more impactful ones.

Scenario

A Scrum team is struggling with long lead times for delivering features. Instead of investigating root causes (dependencies, unclear requirements, or technical debt), leadership focuses on increasing velocity. They push teams to complete more story points, but the actual business outcome, delivering valuable, high-quality software, does not improve.

Consequence:
  • Teams feel pressured to game the system, inflating estimates to show higher velocity.
  • The real blockers (e.g., unclear priorities, technical debt) remain unaddressed.
  • The organization continues to struggle with predictability and customer satisfaction.
Ways to Mitigate the Streetlight Effect in Agile:
  1. Shift from Output to Outcomes:
    • Focus on customer value, quality, and impact rather than just measuring velocity or backlog burndown.
  2. Use Leading Indicators:
    • Measure cycle time, customer feedback, and value delivered instead of just tracking completed work items.
  3. Encourage a Systems Thinking Approach:
    • Look beyond team-level metrics to understand how the entire system works. Address organizational bottlenecks rather than just team performance.
  4. Embrace Empirical Process Control:
    • Use experiments, retrospectives, and feedback loops to explore deeper insights beyond easily available data.
  5. Foster Psychological Safety:
    • Encourage teams to speak up about real challenges rather than just reporting what management wants to hear.
  6. Regularly Re-evaluate Agile Practices:
    • Just because something worked in the past doesn't mean it is still effective. Conduct periodic Agile health checks to assess relevance.
Conclusion:

The Streetlight Effect can significantly impact Agile organizations by creating false confidence in shallow metrics while ignoring real problems. Agile is about responding to change, inspecting and adapting, and prioritizing customer value, which requires looking beyond the “lighted areas” of easily available data. By shifting focus from outputs to outcomes, fostering a culture of inquiry, and encouraging systems thinking, organizations can mitigate this bias and truly embrace Agile principles.

Key Takeaways

  • The Streetlight Effect causes organizations to focus on what's easy to measure rather than what's truly important.
  • Agile teams can fall into this trap by over-prioritizing velocity and task completion instead of customer outcomes.
  • Real agility comes from measuring value, customer satisfaction, and adaptability, not just operational efficiency.
  • Organizations can mitigate this bias by using systems thinking, leading indicators, and continuous learning.
  • Regular reflection and adaptation ensure Agile remains effective rather than just a process compliance exercise.

Summary

The Streetlight Effect in Agile leads teams to focus on superficial or easily available data instead of meaningful insights. This results in misaligned goals, ineffective problem-solving, and resistance to change. To avoid this, organizations should shift from output-driven to outcome-driven measurements, use systems thinking, and foster a culture of inquiry and experimentation. By addressing the root causes rather than just visible symptoms, Agile organizations can drive real business value and continuous improvement.