I want to highlight common problems with periodic business reviews, and how we can use the concept of metric and driver trees to transform this into a high-impact, collaborative process between data, business, and executive teams.
First, let's discuss the common problems:
- Treating business reviews as a dump of KPIs from business functions: This only serves to increase production and coordination costs. Organizations may be shocked to measure the people-hours spent on curating metrics for an executive summary on top of existing reporting tools.
- Over-indexing on what is happening vs why: Executives scanning an array of metrics will invariably want to understand why. Two to three 3 well-analyzed "whys" beats twenty "whats".
- Not linking reviews to business interventions: After all, the role of business functions is to impact metrics. The ability to connect actions taken to output metrics and outcomes, to learn from them to identify next steps, is crucial.
Two concepts can transform and elevate this process:
- Driver trees: Metrics are associated with drivers/segments. An explicit mapping of this culturally shifts the focus to the why, not just the what.
- Metric trees: Metrics are also interconnected. Some are direct levers or inputs. Some are outputs. Some are indirect measures. Some are intermediaries. Ultimately, they collectively represent the business model at play.
Expressing your business explicitly via metric and driver trees sets a foundation on which data and business teams can organize the swamp of metrics, focus on the why, understand the impact of interventions, and shape future bets.
Our strong belief is that software that operationalizes these metric and driver trees can 10x an organization's ability to operate on their data and drive business outcomes.