Are Your KPIs Helping or Hurting Your Product Strategy?

In the chaotic world of product strategy, Key Performance Indicators (KPIs) are like the compass guiding your team through uncharted waters. But here's something I’ve learned from experience: not all KPIs are created equal. Some are like headlights, showing you the road ahead, while others are more like rearview mirrors, reflecting on the journey you've already taken. These two types—leading and lagging KPIs—need to work in harmony to keep your product strategy moving in the right direction.

Let me paint a picture for you. Imagine you're captaining a ship through unpredictable seas. The weather is constantly changing, and you need to make decisions fast. Leading KPIs are your early warning system. They give you hints about what might be coming up next—whether it's smooth sailing or stormy weather ahead. Think about metrics like customer engagement, website traffic, or the number of new leads you're generating. These forward-looking indicators give you a glimpse into how well your strategy might perform in the future.

Now, let’s talk about lagging KPIs. These are more like your ship's logbook—they tell you how well you've navigated after the fact. They’re the hard numbers that reflect the results of your efforts: revenue growth, customer satisfaction scores, market share. They confirm whether your strategies hit the mark or missed it entirely.

Here’s where things get really interesting: when your leading KPIs line up with your lagging ones, it’s like hitting a bullseye. It’s that moment when you realize that all those early signals were right on point, and now you have the proof in hand. This alignment doesn’t just give you a pat on the back—it gives you confidence that you're steering in the right direction.

Why does this matter?

When this alignment happens:

• You can confidently say that what you're doing is working.
• You know exactly where to invest more resources and where to scale back.
• Over time, you’ll fine-tune your forecasting skills, making future planning even more reliable.

I’ve seen this happen firsthand in product teams I’ve worked with. When we noticed our leading and lagging KPIs were in sync, we knew it was time to sit down and have some important conversations:

1. Are these KPIs truly reflecting reality? If they are—fantastic! If not, what adjustments can we make to improve them? Sometimes it’s just a small tweak that makes all the difference.
2. Look for patterns in the data Are there consistent indicators of success? These insights are gold for shaping future decisions.
3. Are resources being used effectively? Maybe it's time to double down on areas showing promise or cut back on those that aren’t performing as expected.
4. How often do our predictions come true? If there’s room for improvement (and let’s be honest—there always is), we tweak our models for better precision next time.
5. Consider external factors What could throw off our predictions? And how do we mitigate those risks?
6. Focus on continuous improvement What lessons have we learned from this process? How can we apply them moving forward?

At the end of the day, the interplay between leading and lagging KPIs is crucial for any product team aiming for long-term success. When these two types of indicators align, they provide a clear roadmap for decision-making and resource allocation. Regular discussions around KPI alignment ensure strategies remain effective while fostering continuous improvement.

So here’s my advice: keep an eye on those KPIs! Make sure you're having meaningful conversations about how they align with each other—and with your broader goals. This approach will help you navigate the complexities of product development with confidence and achieve lasting success.

I would love to hear about your experiences.

#ProductStrategy #KPIs #GrowthHacking #BusinessSuccess