Metric goals != Strategy

“The levers of our business are [traffic] x [sign up %] x [conversion %] x [$ per customer]. Our strategy is to improve these metrics.” Wrong.

KPIs are not strategy. KPIs are measurements of progress. Strategy is your hypothesis for how to achieve that progress.

Now, your strategy could be “let teams do whatever they want, as long as the KPIs go up.”¹ Some companies do that.²

If your leadership team is doing this and you want to help, here’s my approach:

1. Work backwards from their 3-year goal (or, some success milestone that is no further away than 3 years, like “raising our next round” or “break even”). What KPI targets do we need to hit to achieve that goal? Are we on track if we keep doing exactly what we’re doing? If not, where are we not on track?

2. Now, work with leadership to figure out the big picture strategy: to achieve those 3-year KPI targets, what do we need to be known for? What do we need to be good at? Narrow it down to 3-5 hypotheses. Common examples: we save you time; we help you increase performance; we use PLG to keep CAC really low, etc. These are outcomes that customers want and would hire us to achieve, and by doing so, makes our KPIs go up.

3. Then, have a conversation about where we are now in each of those strategies vs where we need to be in 3 months, 12 months, 36 month. If you want, assign a rating 0 - 10, where 0 is “we don’t do this at all” and 10 is “this perfectly achieves our 3 year goal”. Assign KPI targets for each strategy at each of the 3 month, 12 month, and 36 month markers — how would we know if it’s working and we’re on track?

4. Now, back to strategy: what should our resource allocation be, given this information? The worst answer is “spread the team equally across everything”, because 1) we likely didn’t give the same rating to everything, and 2) ROI isn’t a straight line, it’s a curve with diminishing returns, so we always want to find the steepest part of the curve (less effort for more reward).³

5. Lastly, we can do roadmap. This is probably the right moment to take the baton from the leadership team. You now know: 3 / 12 / 36 month goals and KPI targets, 3-5 company strategy hypotheses for how to get there and how large our gaps are. The resource allocation exercise also tells you relative prioritization and how much you have to work with. So now it’s your job to, within the guardrails of everything we just discussed, go do Discovery, find the most important problems to solve, and deliver solutions that improve those KPIs.

Strategy isn’t easy. It’s likely that we’re wrong about things. But if we’re not intentional about how we think we can get from A to B, then we’re just hoping we get there by accident. And, as we all know, hope is not a strategy

The Workshop

This is a newsletter-only section where I share a half-baked idea in hopes that y’all who are smarter than me can work it out with me.

We’re running long today so I’ll keep this brief.

Last night, my NY Times app updated with a new “You” tab. It’s terrible.

I’ve been a subscriber for over 20 years. My login is literally my college email address. Gmail and Facebook didn’t exist yet.

And yet, despite decades of data on what articles I read and share, NYT is forcing me through this awful 2000s era onboarding where I manually pick categories.

And once I do this (which is definitely not nearly granular enough, so I’m both going to get content I don’t actually like and miss out on stuff I do like), I get this feed that is just a worse version of the home page.

It’s worse in that the content density is low (boxes within boxes with padding is bad design!) and has this ridiculous “rearrange” feature that I can only imagine was insisted upon by some stakeholder who has no business making product design suggestions.

For this to launch in an era of LLMs is shocking. Yes, Amazon-style recommendations are hard for news because news is by definition fresh (and therefore lacking a ton of usage data). But LLMs are perfect for combing through my entire user history and extracting the topic keywords that reflect my interests and then showing me the next new article on that topic.

What were they thinking?

1  In that world, the roadmap reflects user problems discovered by Product and customer-facing teams (Sales, CX, etc). Features are prioritized based on ROI. Resources are spread equally across every surface area. Everything gets a little bit better every quarter. The upside is your teams get tons of autonomy and leadership can hold teams accountable. The downside is everyone is working within their silos, optimizing their corner of the world. Larger user problems and unlocking larger value creation opportunities go ignored because of a lack of collective action.

2  We did that at The Knot when I joined in 2017. Every squad had a KPI they were tasked with improving, and they could do anything they wanted as long as it made the number go up. It’s a huge improvement over the old feature team delivery model but still not as valuable as having a strategy.

3  The Knot’s current CPO, Zohar, would make this point that I agree with: software is different than building a house. With a house, every step taking gets us a little bit closer to completion. With software, our efforts have zero value until we launch the feature and the feature has measurable impact. So making 10% progress across 10 different initiatives, where none of them ship any impact, is actually zero value times 10 teams. It’d be better to swarm one initiative (up to the point of diminishing returns, a la “Mythical Man Month”) to get it to 100% completion and impact faster.