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Daniel Schmidt on aligning autonomy, actioning North Star Metrics, and mapping business drivers
Product State Q&A
Daniel Schmidt is Co-Founder and CEO at DoubleLoop. He was formerly the VP of Product Management at MD Save, Head of Product Management at GoodGuide, Sr. PM at CBS Interactive, and PM at CNET.
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EC: How can product leaders enable aligned autonomy?
DS: I love the concept of ‘aligned autonomy’ because it dissolves a false dichotomy. On the surface, it seems like alignment and autonomy are in opposition with each other. Strong alignment often involves a top-down strategy that limits the freedom of individual contributors by putting them inside a predefined box or solution.
But product leaders can create alignment and autonomy at the same time.
In my view, aligned autonomy represents the ideal for how companies operate. You get the best results when
Teams are focused on the right problems while
Contributors have freedom to apply their talents and domain knowledge to invent solutions that exceed the imagination of the leadership team
Product leaders create aligned autonomy by focusing teams on the important business problems, without being prescriptive about the solutions.
My favorite technique for doing this is mapping business drivers. Business driver maps make long-term business goals clear and show the inputs into achieving those goals — the lead measures that can be directly actioned.
When teams understand business drivers, they can be creative in how they influence the leverage points. It’s higher leverage to spend more of your strategic planning time aligning on business drivers, and less time aligning on goals or projects — which will inevitably change as teams learn.
EC: What’s a good way to set a north star metric and putting the framework into action?
DS: For some companies, aligning on a singular North Star metric is an extraordinary way to focus teams on creating customer value. From my experience, the framework is particularly valuable for teams who are trying to solve the puzzle of retention.
While there are a number of ways to go about choosing a North Star, I usually start by asking the question ‘What are the things that your most loyal customers do?’ From there, I explore how to measure how many of your users are doing those things.
But for many companies, the North Star framework is not the best fit.
If your company is based on a network effect (e.g. marketplaces, social networks) — it can be detrimental to reduce things down to a single metric. Instead, you want your teams to understand the relationships between metrics (e.g. with a growth loop).
The North Star Framework is just one framework for mapping business drivers. There’s often simpler ways to start, like making a KPI tree that breaks down the components of how your company makes money.
Sadly, many teams spend a lot of time mapping their North Star and then don’t put it into action. The keys to operationalizing the North Star framework are to
Validate that your North Star is predictive of business performance,
Map the input metrics that influence your North Star, and
Focus your roadmap and goals on those input metrics
Helping companies map their North Star and put it into action is exactly why we’re building DoubleLoop.
EC: How do you connect product vision and strategy with OKRs and NSMs?
DS: An effective product strategy provides a clear framework for saying ‘No’ to projects that are outside of your focus. When considering a potential project, you can ask yourself, ‘Will this project influence an input into our North Star metric?’ If the answer is no, it provides a clear reason to not do the project.
Business driver maps such as the North Star Framework provide excellent foundations for OKRs. When you map your North Star, you align on the metrics that matter. You can then target OKRs on influencing those metrics.
If you skip the step of mapping your business drivers, then you risk focusing your OKRs on the wrong metrics. I’ve seen companies focus their OKRs on growing metrics that were actually hurting their business.
“Product leaders create aligned autonomy by focusing teams on the important business problems, without being prescriptive about the solutions.”
- Daniel Schmidt, DoubleLoop
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