Many vs. One metric

Tracking the health and performance of your business.

When most people start out building a company they do not track everything, maybe some things, maybe nothing. In the past I have used the following analogy to help guide how much tracking is helpful without being hurtful:

In the beginning, you are learning to ride a bike, knowing how to balance is great, and knowing how fast you are going is helpful. One metric or maybe two is good to track

Over time as the environment gets more diverse, you need to look further out, your systems get more complex.

You are now driving a car, you need a bit more data, such as fuel levels (money in the bank), fuel consumption (runway), how fast you can break (scaling cost), and a good map of where you are going (strategic KPI's)

Eventually, you are flying a plane, and the dashboards you use get very complex, probably too complex (and don't get me started on businesses with space shuttle-esque dashboards...)

Now it is time to think about what is really needed to make decisions and pare down your metrics.

I recently suggested to a multibillion company that they have one metric :) You should have seen the board, they thought I was nuts.

My argument was that of course, they would track a bunch of stuff, but having one metric the teams could all rally around would unite an otherwise divided company.

Eventually, they relented and are now implementing the one metric as their north star.

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