In today’s data-driven world, CEOs are drowning in metrics. Sales figures, customer acquisition costs, NPS scores, employee engagement rates – the list goes on. But here’s the million-dollar question: Are you measuring what truly matters?
Written by Matt Roberts | Co-Founder of ZOKRI
I’ve worked with countless CEOs who find themselves paralyzed by data overload. They’re tracking dozens of KPIs, but still struggling to make confident, strategic decisions. The problem isn’t a lack of data – it’s a lack of focus on the metrics that truly drive business growth.
One of the guiding principles I always emphasize to my clients is the importance of being explicit about strategic metrics and levers. It’s not about tracking everything – it’s about identifying the few key metrics that have the power to move the needle for your business.
Think of it this way: If you could only track five metrics to run your entire business, what would they be? This exercise often leads to some fascinating insights and heated debates among leadership teams. But it’s crucial because it forces you to cut through the noise and focus on what truly matters.
Creating a powerful metrics model isn’t just about choosing a few KPIs. It’s about understanding the relationships between different metrics and how they impact your overall business performance. Here’s a simple process I often use with clients:
- Identify your North Star metric: This is the one metric that best captures the value you deliver to customers and aligns with your long-term business success.
- Map out your key driver metrics: These are the metrics that directly influence your North Star. They’re often leading indicators that can predict future performance.
- Define your lever metrics: These are the metrics you can directly influence through your actions and initiatives.
- Visualize the relationships: Create a simple diagram showing how your lever metrics influence your driver metrics, which in turn impact your North Star metric.
This process helps create clarity and alignment across the organization. It becomes much easier to set meaningful OKRs (Objectives and Key Results) when everyone understands how different metrics relate to overall business success.
Another key concept I teach in my OKR training sessions is the distinction between different types of metrics:
- KPIs (Key Performance Indicators): These are the critical few metrics that indicate overall business health and progress towards strategic goals.
- Metrics: These are calculated values that combine various measurements, often including a time element.
- Measures: These are the raw data points from which metrics are calculated.
Understanding this hierarchy helps you create a more structured approach to measurement, ensuring you’re not confusing day-to-day measures with strategic KPIs.
Let me share a quick success story. I worked with a SaaS company that was struggling with churn. They were tracking dozens of metrics but couldn’t seem to move the needle on customer retention.
We went through the process of creating a strategic metrics model. Their North Star metric became “Annual Recurring Revenue” (ARR). The key driver metrics were “Customer Lifetime Value” (CLV) and “Customer Acquisition Cost” (CAC). As we dug deeper, we identified “Feature Adoption Rate” as a critical lever metric that strongly predicted CLV.
With this clarity, they were able to set focused OKRs around increasing feature adoption. They used OKR software to track progress and align teams around this goal. The result? Within two quarters, they had increased feature adoption by 40%, which led to a 25% reduction in churn and a significant boost to their ARR.
Ready to cut through the noise and focus on the metrics that truly matter? Here are three steps you can take right now:
- Identify your North Star metric. What single number best captures the value you deliver and your long-term success?
- Map out the key drivers and levers for this metric. Create a simple visual model showing these relationships.
- Review your current KPIs and OKRs. Are they aligned with your strategic metrics model? If not, it might be time for a reset.
Remember, the goal isn’t to track everything. It’s to measure what matters and use those insights to drive real, sustainable growth.
What’s been your experience with metrics and KPIs? Have you found yourself drowning in data, or have you cracked the code on measuring what truly matters? Share your thoughts in the comments below. And if you’re ready to take your metrics game to the next level, let’s talk. Your path to data-driven growth might be clearer than you think.
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