I was feeling burned out.

For 3 years, I had been a product manager at an ed-tech company and did everything a product person should do: I researched the market, advocated for the people using the product, emphasized outcomes over outputs, and made the case, over and over, for more focus and fewer distractions.

Stakeholders, team members and management seem to agree.

But in reality, the company struggled to adopt the product mindset.

The company was caught in a perpetual cycle of shiny object syndrome: constant pivoting and costly experiments without data validation. Just when the product team started to build momentum, people with authority would insist that we pursue a new trend that another startup is doing.

Everybody’s got their own ideas for how the product should look like.

We - the product team, felt lost and demoralized because we’re unsure whether the features we’re building are bringing any meaningful impact to the business and our customers.

Can I get another round of restructure please?

Execs decided to do a drastic restructure for the entire tech division.

This restructure is not just about moving people and changing team topologies, but also about changing processes so that the product teams will be empowered. To be empowered, we need a way to combat biases from everyone (including ourselves).

This was the 3rd restructuring that I’ve experienced in this company, but hey maybe third time’s the charm?

There’s a lot of moving parts of the restructure (which will give me a near endless supply of content ideas 😛), but one of the first things we focused on is applying the North Star Framework.

You must be thinking: “North Star sounds fluffy”.

I had my doubts too.

But when we started our workshops, I was convinced this is one the most important things that any company that aspires to be more product-led should do.

What is the North Star Framework?

As the name suggests, the North Star Framework is a model for identifying the most crucial metric (the North Star Metric) that best captures the core value that the product delivers to its customers.

The framework also maps out other input metrics that the product team can directly influence, which ultimately impacts the North Star Metric.

When done well, the North Star Framework empowers the product team to:

• Focus on impact rather than outputs
• Decentralized decision-making
• Easily align and communicate

This framework was popularized by Sean Ellis and the growth hacking movement back in 2010s.

When put together, the framework acts like a simple formula that your team can visualize, validate and optimize:

The components of the North Star Framework

The framework should be read from right to left, since the product team influence increases in that direction.

Let's dive deeper into each part of the framework.

1. Long-term results and value

It starts with identifying the mid/long-term business results and customer value. This is usually a lagging indicator, which is a metric that's very difficult to change. It also reflects the results that have happened in the past, rather than predicting the future.

Example of lagging indicators:

• Monthly Active Users (MAUs)
• Net Promoter Score (NPS)
• Lifetime Value (LTV)
• Revenue Growth
• Conversion Rate

Imagine your product is like a car and the lagging indicator is like the rearview mirror: it shows what’s behind you (reflects the past).

2. North Star Metric

Now we move the star attraction (sorry I couldn’t resist 😛), the North Star Metric!

The North Star Metric (NSM) is the main leading indicator that the product team believes they should focus on in order to bridge the gap between the product and the mid/long term business results and customer value.

Leading indicators are metrics that the product team can directly influence.

Going back to the car analogy, imagine leading indicators are the steering wheel and controls of the car. The product team is the driver that can steer the car directly towards the destination. The product team shouldn’t be completely reliant on other departments (e.g. marketing) to improve these metrics.

Yes, the product team should collaborate with the other departments, but there are other metrics that each department will own that will synergize nicely with NSM.

For example, back in 2019, Burger King defined Digital Transactions Per User as their NSM:

They realized that everyone in the organization was aligned to the same goals: to drive brand love and sales.

But if they set that as their North Star, it’s not specific enough and would lead teams to go in different directions without focus. Digital Transactions Per User is easy to understand and can be broken down into smaller inputs for the product teams or squads to tackle.

Speaking of inputs...

3. Inputs (leading indicators)

The NSM is supported by smaller input metrics.

Conceptually, think of it like a formula or equation (though North Stars aren’t necessarily a math function).

Each of the input metrics should lead to an improvement to the North Star Metric itself. If along the way you find some input metrics are not moving the needle, you can either remove, modify or replace them. The same goes with the NSM, the team should revisit it after 6 months if it’s not impactful.

Sticking to the Burger King example, to improve their NSM of Digital Transactions Per User, their inputs were:

• # of new installs who convert from install to tap coupon
• # of times people open the app
• % of users who come back to app after making one order

From there, Burger King created smaller squads to focus on improving each one of these inputs.

With these inputs clearly defined, this makes identification and prioritization of work much easier:

Check out the full presentation of Burger King’s North Star here.

4. The work

With the other components of the North Star Framework in place, it’s time to review all the work the product team have in the backlog.

It doesn’t really matter how your team operates or which methodologies and team compositions you adopt, everything you do should align with the strategy that’s guided by your North Star. If the numbers don’t change in a positive manner, the product team needs to understand why.

This will guide your discussion with people outside the product team as well.

There’s a lot of memes about how product managers love to say “No”. Well with NSM, product managers can steer stakeholders to the right conversations now. Stakeholders who have strong suggestions to prioritize certain initiatives should reconsider whether it aligns with the North Star or not.

Conclusion

The North Star Framework consists of these components:

• Long-term results and value
• North Star Metric
• Input
• The work

In my experience going through the North Star workshops the past few weeks, product teams tend to go into various rabbit-holes and overcomplicate the definitions and metrics to be tracked.

If you’re planning to implement this framework for the first time, it’s best to keep things simple and adjust along the way. You need to give some time for data and feedback collection, so your team can reflect on the impact of the changes being delivered. A good guideline is to check-in every 3-6 months.

The North Star Framework sounds simple, but it can be difficult to define. It can also be quite challenging to communicate, especially if your organization has not used it before.

In future issues, I’ll share my experience and tips on communicating and refining our North Star.

See you 😁

P.S. I’m in the middle of rebranding this newsletter to better reflect the value it brings to you. I’ll be sharing more in the coming weeks but feel free to reply and give some name suggestions 😊.