Growth Hacks: The three-layer cadence of KPIs of a growth strategy

Growth Hacks: The three-layer cadence of KPIs of a growth strategy

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The three-layer cadence of KPIs of a growth strategy

Aside from the CEO and the COO, almost every other role (CMO, CTO, CPO) has a mostly well-defined scope of actions and responsibilities that changes very little from time to time.

From this perspective, the growth team is closer to the CEO/COO than the rest — they have no clear scope or responsibility for a long time (only for some time, usually 3–6 months — the period in which a growth objective (OMTM) lasts).

With no limitation, it’s very easy to get caught trying to help everyone, improve everything and test every idea. While this will likely generate positive results, it will not positively impact the perception the rest of the company has upon the growth team.

> Imagine you ran some tests for marketing and got a 1% improvement on lead-gen;
> Then you ran some tests for the sales team and got a 2% improvement on lead-conversion;
> You moved to the CS team and your tests landed a 1.5% improvement on upselling;
> Afterwards you run a test on pricing for the revenue team and got 0.5% improvement on NMRR;

While depending on the whole number (percentages doesn’t really paint the picture), you still had progress everywhere. However, this didn’t land you anywhere and, from the other area eyes, the growth team isn’t moving the needle in any direction:

From the book: Essentialism, the disciplined pursuit of less by Greg McKeown

To avoid falling into the trap of helping everyone but making no difference, after all, I will use one of the best books I’ve read over the past couple of years: Essentialism, the disciplined pursuit of less by Greg McKeown.

“The way of the Essentialist means living by design, not by default. Instead of making choices reactively, the Essentialist deliberately distinguishes the vital few from the trivial many, eliminates the nonessentials, and then removes obstacles so the essential things have clear, smooth passage. In other words, Essentialism is a disciplined, systematic approach for determining where our highest point of contribution lies, then making execution of those things almost effortless”

Bringing this to our reality, as growth teams, say yes to every request and you will never get anything done. One of the lessons of the book is to learn to do only the essential and if it isn’t the most important thing you should be doing at that moment, say no! The result of this is, instead of making small progress in multiple directions, you will generate a huge momentum towards accomplishing the truly vital thing — and the one that will indeed move the needle closer to where you want to be (or to where the company wants to be).

In practical terms, the best way to achieve that laser focus is to create a three-layer-cadence of KPIs that gives you both the focus but also the flexibility to act upon where the biggest opportunity lies. The layers are: North Star Metric > ObjectivesIdeas.

North Star Metric: the holistic metric covering your whole company, all different stages of your customer journey, the deliveries and responsibility of every area, connected with the value-delivered/perceived + companies growth.

Objectives: the major focus of the growth team for a specific time range. Depending on the execution capacity and the structure, the team could have multiple objectives at the same time (teams subdivided into squads normally have each squad focusing on a different objective.

Ideas: the initiatives you will indeed be deploying. This includes tests, experiments, a/b optimization, etc.

To give you a full picture, let me draw a fictional example for Airbnb:

North Star Metric: nights booked;

Objective 1: Increase the number of hosts;
KPI 1: # of New Hosts
KPI 1: Number of Total Hosts
Idea 1.1: create a partnership with local real-estate shops;
Idea 1.2: run a referral campaign for super hosts to suggest new hosts;
Idea 1.3: gamify the hosting process with incentives;

Objective 2: Increase the number of travelers;
KPI 2: # of New Travelers
KPI 2: Total Number of Travelers
Idea 2.1: offer discounts for first bookers;
Idea 2.2: sponsorship on airplanes;
Idea 2.3: sponsorship on airports;

As you can see, everything is connected.
Any objective that will not help the NSM will be automatically ignored;
Any idea that will not help the objective will be automatically ignored;

Check out how we help growth teams structure their strategy through Experiments — our growth management platform.

The three-layer cadence of KPIs of a growth strategy was originally published in Growth Hackers on Medium, where people are continuing the conversation by highlighting and responding to this story.

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