The “Great Conjunction of 2020” is set to brighten the darkest day of the year on December, 21, 2020, as two giant planets (Jupiter and Saturn) draw closer together. The last time the two planets were so close was in 1623. These two gas giant planets will appear close while they are actually hundreds of millions of miles apart, according to NASA.
Just as the Great Conjunction and the actual North Star in the sky will focus stargazers attention, the North Star Metric (NSM) is a metric that a business uses as a focus for their growth.
Here are some examples from familiar companies:
- Amazon: sales
- Facebook: daily active users
- Slack: messages sent within the organization
- Spotify: time spent listening
- Netflix: subscribers watching X hours of content
The North Star Metric is a company-wide metric that matters to everyone and is an indicator of overall growth — so as it grows, so does your business.
Why should you have one?
A NSM can benefit your business in a few different ways:
- Clarity: It’s critical to have crystal clear clarity. Technology has flooded us with new data points and Frankenstein-like scorecards. The North Star Metric gives every person in the business line-of-site to how well the company is achieving growth.
- Focus on Progress: Company’s need focus at the business-level and the team level. This key metric gives the entire company the same focus and allows teams to contribute toward that metric based on their smaller group focuses.
- Accountability: What’s measured gets managed.
Clarity and focus will allow your business to grow more efficiently over the long-term.
The North Star Metric vs. One Metric That Matters
- North Star Metric is the number on which your entire company focuses to achieve long term growth.
- Who: Entire Company
- Timespan: Long term (years to lifetime)
- Focus: Supports Growth Strategy
- Relationship: The Umbrella Goal
- One Metric That Matters is the number on which one team focuses to achieve rapid growth for a short period.
- Who: Single Team or Restaurant
- Timespan: Short Term (1 or 2 quarters.
- Focus: Supports rapid improvement
- Relationship: Sub-focus to the North Star Metric
5 Factors to Identify Your North Star Metric
- The NSM should indicate that your guest experienced the core competitive advantage that your brand offers.
- The measurement should reflect the customers level of engagement and activity.
- The NSM should be the closest proximate to the “one thing” that indicates your business is growing in the right direction.
- It should be easy to understand and communicate across teams.
- The metric doesn’t have to be perfect… progress over perfection.
Within the Restaurant Industry
While the NSM remains popular with big Software as a Service (SaaS) companies, it remains applicable to high growth restaurant groups as well. Below is an illustration of a North Star tree for a small restaurant group. The tree ties together a dozen or so initiatives into a single framework.
Use Your NSM for Higher Levels of Impact
Using the North Star Metric to drive your growth strategy is a solid investment of time and effort and should lead to higher levels of impact in your business.
About Consult to Grow
Need (i) an outside facilitator, (ii) help with more complex strategic planning, or (iii) want to host a planning retreat but don’t know where to start? Reach out to us today. Consult to Grow is a business advisory firm focused on helping small-to-medium sized businesses and restaurant chains improve, scale and grow through strategy, people, systems and processes.