Managers use a lot of tools and ways to gather data about everything that happens with their business, from lead generation through to customer satisfaction.
How to focus on the key challenges? The answer is connected with OMTM - a single metric that is most important for the stage of a company’s development.
What is OMTM?
OMTM is the One Metric That Matters.
OMTM should be the one and only metric that you care about at a given point in time, for the stage of your startup. It’s not a single number that matters throughout your startup’s existence.
Why do managers need the One Metric That Matters in the first place?
OMTM answers your most important question. The most important question is about the identification the riskiest areas of your business. OMTM is necessary for measuring and answering that question.
OMTM forces you to have clear goals. After you’ve identified the key problem you want to focus on, you need to set goals. Try to be honest with yourself about why you’re doing it and don’t set high bars. OMTM is a forcing factor for encouraging you to set targets and analyze your results honestly and transparently.
OMTM focuses the entire company. It's better to run the risk of over-focusing than it is to throw metrics at the wall and hope one stick. Put the OMTM front and center, physically visible to everyone all the time.
OMTM inspires a culture of experimentation. The Lean Startup movement has shown us the importance of experimentation. If you want to instill and inspire a culture of experimentation throughout your organization – the One Metric That Matters can help.
3 criteria to choose OMTM
There are 3 criteria you can use to help choose your OMTM:
the business you’re in
the stage of your startup’s growth
There are also some rules for what makes a good metric.
1. What business are you in?
There are a few business KPIs that companies track, and they’re dictated largely by the main goal of the company. For online businesses, most of them are transactional, collaborative, SaaS-based, media, game, or app-centric. Actually, no company belongs in just one bucket.
2. What stage are you at?
A second way to split up the OMTM is to consider the stage that your startup is at.
Right away, you need attention generation to get people to sign up for your mailing list, MVP, or whatever. This is usually a “long funnel” that tracks which proponents, campaigns, and media drive traffic to you; and which of those are best for your goals (for example, mailing list enrollment).
3. Who is your audience?
Thinking about OMTM, you should also consider the person you’re measuring it for and to tailor your message to your audience. Some things you share internally will not help you in a board meeting; some metrics the media will talk about are just vanity content that will not help you grow the business or find product/market fit.
How to put OMTM to work? Easy. As your business gets bigger, it's possible to assign responsibility for particular metrics to different team members.
GIST Planning - the multi-tiered and iterative planning system
Word-of-Mouth - the effective method for customer acquisition
Product/Market Fit - the specific metric of product conformity to the market