Metrics

Illustration Of The Value Of KPI/Metric Trees Using An AI-Driven Legal Tech Startup

Do you truly understand the metrics that drive your business? In my work with innovative companies I’ve found that building a comprehensive KPI tree can be a game-changer. It’s not just about tracking numbers; it’s about understanding the levers that drive your business and aligning your entire organization around them.

Written by Matt Roberts | Co-Founder of ZOKRI

Let’s dive into how you can build a powerful KPI tree using an AI-driven legal tech startup, using Acme Inc. as our example.

Starting with the Root

At the heart of your KPI tree is your root KPI – the metric that your company ultimately strives to impact. For most SaaS companies, including legal tech startups, this is often Monthly Recurring Revenue (MRR).

Here’s how we might break down MRR for Acme Inc.:

MRR = Number of Customers * Average Monthly Revenue per Customer

You can then connect other KPIs to this in the tree e.g.:

Trial to Sign-up Rate %
Average Revenue Per Customer
Churn

Movable Metrics that Matter

Now, let’s identify and connect “movable metrics that matter” – metrics that can be impacted by your activities/experiments/bets and have a meaningful impact on your root KPI. For Acme Inc., moveable metrics that matter that influence the ‘Trial to Sign-up Rate %’ might include:

Documents processed in first 7 days
Accuracy Rate of AI Document Review
New users added in first 7 days

Activities/Experiments/Bets to Move the Metrics

Finally, let’s look at some activities/experiments/bets that Acme Inc. might make to move these metrics:

User Experience Overhaul: Redesign the interface for increased intuitiveness
Client Success Program: Implement a proactive outreach program to drive adoption
Feature Development: Add collaboration tools to increase stickiness

Bringing It All Together with a Data Model and OKRs

To align your organization around these metrics and bets, consider combining a data model that uses tools like KPIs trees and Objectives and Key Results (OKRs). OKRs can help you translate your KPI tree into meaningful and measurable goals. All of this can be managed and visualized in ZOKRI’s Strategy, KPI and OKR software.

For example, an OKR for Acme Inc. might look like:

Objective: Become the go-to AI assistant for in-house legal teams

Key Results:

Increase average time saved per lawyer from 25 to 35 hours per week
Improve user adoption rate from 60% to 80%

Measuring Progress and Adapting

Remember, building your KPI/Metric tree is just the beginning. The real value comes from regularly reviewing your metrics, understanding their relationships, and adapting your plans and OKRs accordingly.

Consider implementing regular OKR check-ins to keep everyone aligned and focused on moving the metrics that matter most.

If you could only focus on improving one metric in your business over the next quarter, which would it have the biggest impact? What’s stopping you from going all-in on that metric today?

Building a comprehensive KPI tree and aligning your organization around it can be challenging, but the payoff in terms of focus, alignment, and growth can be enormous. If you’re ready to take your metrics game to the next level, consider bringing in OKR consultants who can help you design and implement a system tailored to your unique business.

What’s been your experience with metrics? Have you found effective ways to align your organization around key drivers of growth? Share your thoughts in the comments below. And if you’re ready to unlock the full potential of your metrics, let’s talk. Your next level of growth might be closer than you think.

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