The Ultimate Product KPI Starter Kit

KPIs are a powerful tool to create focus within a team but with great power comes great responsibility.

Throughout my career, I have witnessed numerous instances of KPIs gone wrong.

I remember as a new leader, my manager define the KPIs I should be measuring for my team. I provided the data, as requested, but never really understood the KPI results. Consequently, they didn't add value to the business.

Another manager required we submit weekly KPIs in the stop light method. He was extremely particular about the format and timing of the submission but regardless of what I submitted, we never discussed them so we never improved.

And then there was a well meaning colleague in engineering that started measuring their team members based on KPIs. The engineers started adjusting their process to optimize their KPIs at the detriment of quality.

These experiences taught me some basic KPI rules:

1. Measure things that matter and are understood by your team.

2. Use KPIs as mechanisms for improvement.

3. Never link KPIs with individual performance measurements

The best KPIs are internal focused. They help the team understand what is important and provide a starting point to a conversation.

Defining KPIs

Always define KPIs with your team. Work together to define how they will be tracked and what the goals should be for each. Getting your team involved helps create a clear understanding of what is important for them to drive success.

When initially introducing KPIs, I recommend keeping your KPIs simple and focus on metrics that are within the team's control. KPIs like net retention and NPS are common Product Management KPIs but these can be frustrating measurements for a lot of PM teams that may not feel they have control over those numbers. For this reason, I recommend 4 starter KPIs:

• Leading: User Interactions

  • User interactions lead to valuable insights. The best way to understand the business problems your customers face is to ask them.

• Leading: User Insights

  • User interactions are great, but if you aren’t tracking the insights you’ve gathered, how can you leverage them to prioritize the most-needed solutions?

• Lagging: Features Delivered

  • Stay agile and deliver value to your customers as quickly as possible by encouraging your team to break down large solutions into small features that provide incremental value.

• Lagging: Insights to Features

  • Ensure you are turning those user insights into features delivered to your customers. If done right, this should prevent your organization from becoming a “feature factory.”

What About the Typical Product KPIs?

You may be wondering why my list doesn't include metrics like NPS, Customer Retention, Customer Growth. Don't get me wrong, these are extremely valuable organization-wide KPIs, and should be tracked and analyzed.

When defining your KPIs for your team, however, consider what activities and metrics your team is responsible for to ensure you are doing your part to support these larger, organization-wide KPIs.

Analyzing KPI Results

At the end of every month, don't simply push the send button and move on. Take time to analyze your KPIs and discuss them with your team.

If you are missing you KPIs goals, discuss with your team what is contributing to the miss and what needs to be changed.

• If you are keep falling short on your user interaction KPI, do you try a different approach?

• If you aren't hitting your insights to features goal, there could be disconnect between your market feedback and your prioritization process that needs to be addressed.

• Or maybe you were just to optimistic and need to lower your goal a bit.

If you are knocking your KPIs out of the park maybe it's time to increase goals or add new KPIs around areas the team would like to improve.

Tip: When you fall short on a KPI but can't define a change your team can take, odds are you are measuring the wrong thing.

What are some of your KPI horror stories or successes?