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Key Performance Indicators

What will it take to move the needle? Are you on the critical path to success? How do you know?

The key word is indicator, regularly scrutinize and reassess your metrics to ensure they genuinely reflect your core objectives, rather than blindly managing to outdated proxies that may have lost their relevance over time.

Purpose​

For a piece of information to be valuable, it has to satisfy the following criteria:

  1. it has to be important
  2. it has to be accurate
  3. it has to be actionable
Value System

No what you value and why you value it.

Principles​

Compare outcomes with expectations to make data aligned decisions

  • The map is not the territory
  • The model is not the reality
  • The data is not the decision.

Value System​

Connect triggers with levers to navigate the ship.

  1. Are we compromising our value system?
  2. Are we investing our time wisely?
  3. Are we leveraging tools to maximum potential?
  4. Are we helping people take better decisions?
  5. Are we missing anything?

Subjects​

Benchmarks

  1. Time and Energy
  2. Primary
  3. Retail
  4. Financial
  5. Human Resources

Metrics by Industry:

Review​

KPI review process:

  1. Define core objectives clearly
  2. Choose metrics that directly reflect these objectives
  3. Understand why each metric was originally selected
  4. Regularly question if metrics still accurately represent core goals
  5. Be willing to discard or update metrics that have lost relevance
  6. Avoid managing to metrics without understanding their purpose
  7. Stay vigilant against metric inertia as the business evolves
  8. Focus on the underlying truth (e.g., customer happiness) rather than the proxy
  9. Ensure metrics drive actions that genuinely improve core objectives
  10. Maintain skepticism towards long-standing metrics

Remember, the key is to constantly scrutinize your metrics, understanding their connection to your true goals, and being ready to adapt as your business and the world around it change.

Dashboards​

Build dashboards that tell stories and trigger accurate decisions that exploit opportunities and remedy failures.

  • Worst first
  • Set decision triggers
  • Link triggers to processes
  • Link processes to people

North Star​

Your North Star focuses intention and attention.

Time and cost/effort to valuable UserActivation.

  • Cash Flow is King
  • Revenue (e.g. ARR, GMV)
  • Customer growth (e.g. paid users, marketshare)
  • Consumption growth (e.g. messages sent, nights booked)
  • Engagement growth (e.g. MAU, DAU)
  • Growth efficiency (e.g. LTV/CAC, margins)
  • User experience (e.g. NPS)

Failures​

Bad news needs to travel fast without impediment. Why did failure occur? What can be done to prevent it happening again? How can we react faster and better?

  • Better training?
  • Wrong tactics?
  • Wrong strategy?
  • Cancel the experiment?
  • Cancel contract?
  • Cancel role?

Success​

Review when judging the success of business strategy decisions.

  • How much more to reinvest?
  • Adjacent expansion?
  • Take on more complex/riskier bet?
  • Scale recruitment?

Attachments​

What is the most important question you could ask yourself to make progress?