How to Define Metrics
|
​Dear Reader,​
Most metrics examples focus on popular and external-facing products. Let's discuss how to define metrics for internal products.
I'm a fan of going back to the basics: Any metrics framework should help you measure value delivered to or changes created for whoever your audience is. And guess what? Even internal product teams have an audience: The fellow product, marketing, or sales teams their products serve.
Once that fundamental truth has sunk in, internal teams can also much easier understand that concepts like North Star Metrics or Lagging and Leading Indicators are contextual, not definitive. The Input Metric for one product's NSM could also be the (smaller-scale) NSM for another team. What's a leading indicator for one team can also be a lagging indicator for another team.
Let's assemble the pieces:
I once worked with a Product Manager who built a solution to enable internal product teams to ship their software. Zooming out, customer-related business metrics and user outcomes were tied to the shipped software, but these were multiple layers removed from this team's sphere of influence.
In our coaching Session, we sketched out a few potential metrics components for her work:
As a North Star Metric, you could set something like “The no. of bi-weekly well-packaged releases.” To quantify the NSM, one could use criteria like:
This NSM wouldn't directly contribute to external-facing business goals like ARR or Daily Active Users. However, enabling the efficient and reliable shipping of software has another business implication: It ensures that product teams have more capacity for impactful work. This means it can drive a product team's "Outcome ROI" and contribute to their velocity, which is very business-relevant since a product team is a company investment.
Working down from the NSM, the input metrics can be broken down further. The input metric “Share of Automated Test Coverage” changes due to metrics like:
To use just this one example, driving “% Automated Test Coverage among Cloud Teams” could become a periodic strategic focus for this team. This would allow them to draw inspiration from that part of the metrics tree to set their OKRs.
Alternatively, the prioritization and Discovery of this team should be guided by questions like
Exploring and answering these questions will provide them with more outcome-ish metrics they can connect to the overarching value they want to deliver.
​
Did you enjoy this one or have feedback? Do reply. It's motivating. I'm not a robot; I read and respond to every subscriber email I get (just ask around). If these emails aren't for you anymore, you can unsubscribe here.
Thank you for Practicing Product,
​Tim​
PS: My valued peer and good friend Tamer opened enrollment for the Spring Cohort of this Product Management Essentials Course. It is designed for Junior/Mid-level Product Managers to master the most essential yet hardest skills in modern product management.
Learn the strategies and tactics you need to use OKRs in a way that helps product teams prioritize work based on user problems and business goals—instead of replicating existing feature backlogs.
My Outcome OKRs for Product Teams Course enables product teams to use OKRs as a tool for decision-making in the context of Product Strategy, Product Discovery, and Scrum. Without the fluff, but with a focus on practicality in everyday work.
Learn more about my OKRs Course |
What did you think of this week's newsletter?
As a Product Management Coach, I guide Product Teams to measure the progress of their evidence-informed decisions.
I identify and share the patterns among better practices to connect the dots of Product Strategy, Product OKRs, and Product Discovery.
1 tip & 3 resources per week to improve your Strategy, OKRs, and Discovery practices in less than 5 minutes.
Product Practice #362 The Progress Wheel: My favorite Structure to Connect the Dots READ ON HERBIG.CO PUBLISHED May 9, 2025 READING TIME 4 min & 48 sec Dear Reader, Real Progress happens when you choose methods because they create value for you in your context, and you can use each domain to improve the others. To make Real Progress, teams need to understand and practice two core ideas: Putting the value of a practice before the selection of a method or framework is crucial to avoid getting...
Product Practice #361 Connecting North Star Metricsto Business Models READ ON HERBIG.CO PUBLISHED May 2, 2025 READING TIME 4 min & 45 sec Dear Reader, In many organizations, there's still a disconnect between product and business metrics. Product teams focus on customer-centric outcomes while business teams chase financial targets, with neither side fully trusting how one drives the other. When done right, a North Star Metric (NSM) can establish a middle ground that brings together both...
Product Practice #360 Why your Product DiscoveryFeels too Theoretical READ ON HERBIG.CO PUBLISHED Apr 25, 2025 READING TIME 4 min & 17 sec Dear Reader, Over the past two weeks, I've explored treating Product Strategy and OKRs like products to avoid Alibi Progress. Today, let's tackle the practice that often gets dismissed as "good in theory, impossible in practice" — Product Discovery. When teams tell me "we don't have time for proper Discovery," they're usually stuck in Alibi Progress —...