4 Learnings from
Working on 40 NSMs
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Dear es,
During an ongoing long-term Discovery and Metrics Coaching engagement, I had the opportunity to meet many different external and internal-facing teams. One of this company’s focus points is the establishment of more metrics-informed decision-making, and they landed on North Star Metrics (NSMs) as a critical vehicle for that.
Here are my four key takeaways from considering and working on over 40 attempts to establish an NSM.
#1 Invest in Shared Understanding
It’s crucial to avoid ambiguity when discussing a term like “North Star Metric” to ensure teams don’t develop 10+ different interpretations. Overcoming this is particularly challenging when all the shared examples are from a high-level, abstract company context.
In each of my sparring sessions, I revisited the context of what I meant when talking about a North Star Metric. This definition was aligned with the company’s product leadership, and it was not so much about the RIGHT definition as having the SAME across teams.
#2 Name the Customer First
Many of the teams I met were used to being measured by financials or other high-level metrics outside their Sphere of Influence. To deliberately pull them away from that rabbit hole, I always wanted to get a clear answer from them about who benefits from using their product. Since the idea was to have the NSM sit at the intersection of business and product metrics, we needed to establish that anchor first.
This also helped internal teams to understand who their customers were and what value they tried to create for them instead of getting lost in the end-end-end-customers' success.
#3 It’s not about Finding New Metrics
The value of a North Star Metric is not so much in finding a shiny new object but in establishing the context and making sense of the metrics that already exist. Metrics trees were the most helpful approach for getting what was in people’s heads and on their dashboards into a helpful structure.
This way, the starting point was way more within reach instead of discussing a nice-sounding but abstract metric.
#4 The most effective metric is the one that empowers you to make informed decisions today, not in the distant future.
No amount of theorizing and approval discussions will tell you if you have the “right” NSM. It’s not about finding a metric that adheres to all the artificial definitions done by others (including me) but about a metric that helps prioritize. You’ll only know if an NSM is “right” if you start using it.
That’s why I established a semi-self-serve template walking teams through the most critical questions that should get them to a “Just Enough NSM”-state quickly and then focus on putting this metric into practice before iterating further and further.
HOW TO PUT THIS THEORY INTO PRACTICE
- What should an NSM do for you? Clarify the school of thought you buy into and how an NSM should change the ways of working in teams. Then, establish the details.
- Questions over Frameworks. Use fundamental questions that characterize an NSM and have teams answer these in clear language instead of having them fill out artificially complex frameworks or canvases.
- Don't overthink. Prioritize starting to measure a draft NSM over getting it right in the lab.
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Thank you for Practicing Product,
Tim
PS.: Part 3 of my "State of Discovery"-Poll is live on LinkedIn. This time, it's about screening interview participants.
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Content I found Practical This Week |
From Data Chaos to Strategic Clarity: The Role of KPI Trees in Product Management
In my experience there are two ways to build a KPI tree. In theory you can do as I have just done, starting from the root of the tree with the North Star metric, and breaking it down progressively. But in practice, you probably already have a set of metrics that you are used to working with though. At BlaBlaCar we had been using the same set of metrics for nearly 15 years before the idea of a KPI tree emerged. In this case, the task shifts from selecting the right metrics to figuring out their integration.
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Zone of control vs Sphere of influence
When the deliverable of a story is outside the zone of control of the delivery team, there are two common situations: the expectation is completely unrealistic, or the story is not completely actionable by the delivery group. The first case is easy to deal with - just politely reject it. The second case is more interesting. Such stories might need the involvement of an external specialist, or a different part of the organisation. For example, one of our clients was a team in a large financial organisation where configuration changes to message formats had to be executed by a specialist central team. This, of course, took a lot of time and coordination. By doing the zone of control/sphere of influence triage on stories, we quickly identified those that were at risk of being delayed. The team started on them quickly, so that everything would be ready for the specialists as soon as possible.
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Selecting the right product metrics (KPIs)
This resolves the typical conflict that arises when executives ask “why isn’t the team more focused on increasing revenue in the next 60 days” while the team insists “other people don’t understand that we’re doing a lot of important work.” Work can—and should—be measured sprint-by-sprint, whereas revenue is a multi-input, lagging indicator of success. The product team is responsible for generating revenue, but it is not the only team or actor contributing to that final result, and a change in the product can take a while to show up in revenue; individual features often cannot be directly linked to revenue at all.
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As a Product Management Coach, I guide Product Teams to measure the progress of their evidence-informed decisions.
I identify and share the patterns among better practices to connect the dots of Product Strategy, Product OKRs, and Product Discovery.
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