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Aligning KPIs/Business Objectives to Product Strategy

Product strategy is the heart of product design. It tells the story of what the team will be building, who will be using the product and why. It identifies which new ideas to support, illustrates when features should go live, and identifies new areas of segmentation or revenue streams. For every product strategy story, there are other stories being told to stakeholders, investors, consumers, and the market. With multiple stories and a product’s strategy within a single company, how do you ensure that everyone is heading toward the same destination? This is where aligning key performance indicators (KPIs) based on business objectives to the product strategy ensures alignment with everyone’s stories and ultimately ensures that the entire company, not just the product makes it to the destination. 

Business objectives define the company’s goals; they are specific and measurable results. These objectives are the reason why a company exists or operates. They are the items that a company wants to achieve over a specified amount of time. Business Objectives are items such as “Increase Revenue” or “Focus on Innovation”. They act as the compass telling the company if they are going in the right direction. 

Knowing the business objectives allows the Product team to create their North Star metric. “A North Star is meant to serve as an anchor for a product strategy. It defines the why of the product and helps drive conversations about how business strategy and customer value intertwines” (Wang, 2020). A North Star builds upon the business’ objectives; whilst also considering the business goals, vision, and mission. A North Star metric is a simple statement that enables KPI’s to be built upon. These KPI metrics are defined between the Product team and stakeholders. Since KPIs are specific and measurable outcomes, by ensuring all parties involved, there is a collective agreement on what is considered success in the product initiatives.

Business needs are not the only needs you need to consider. Without considering user needs and pain-points as well, your business/product will not be successful. Learn more about how to build empathy to identify user needs/pain-points here. Based on the user pain-points previously identified, move the ones that apply to the North Star Metric to build out the product initiative. At least one of the identified  KPIs should be reflected in the user statement for each feature.

Below is an excellent example of Netflix’s Product Strategy Process including objectives, North Star, KPIs, and user pain point.




Another point to consider is that a successful product strategy will always be user centric whilst still hitting the business objectives, north star metric, and KPI’s. It’s a delicate balance of meeting business needs whilst also meeting the customer’s needs. Electronic Arts is a great example of a company that was so focused on meeting certain KPIs that they lost their focus on the user. “The company was under immense pressure from shareholders to grow financial returns, but the more focused EA became on growing profits, the more sales continued to dwindle” (Wright, 2022). According to the insiders - the core of their strategic plan was to increase life-time values, explore additional revenue streams such as mobile gaming (Wright, 2022). This change in business objectives was perceived by their consumers and left a negative taste in their mouth. Had EA built their objectives, north star, and KPI more focused on user needs such as customer service, challenging/fun games, new methods of gameplay then increased revenue would have been a byproduct of a successful product strategy.

KPI’s are an integral part of the product management life cycle. The focus on KPIs should always be included when building out a product strategy. When Initiatives and Features are being placed into roadmaps, they should reflect at least one identified KPI. After the feature has been released, analyzing the data finding against the identified KPIs determine success or failure. Based on the outcomes of this data, the KPI’s should be re-evaluated or improved upon for the next cycle of product strategy. As Peter Drucker, known as the father of modern management once said “You can’t manage what you can’t measure”.

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