The Product Strategy-Metrics Sandwich: How North Star Metrics influence OKRs through Product Strategy

In this article, you’ll learn how to move from long-term, value-driven strategic metrics to actionable quarterly Key Results, with Product Strategy bridging the two:

• Where to Begin?
• The Difference between North Star Metrics (NSMs) and OKRs
• The Anatomy of a North Star Metric
• The Levels of North Star Metrics
• The Timelines of NSMs, Strategy, and OKRs
• How to Move from Product Strategy to Quarterly OKRs
• Turning Lagging Strategy Proxies into Leading Indicators

Where to Begin?

As a Product Manager, you may be experiencing one of these common situations right now when it comes to the relationship between Metrics and Product Strategy:

• Your Product Strategy feels uninspired or misguided because it lacks a Product Vision.
• Your Product Strategy is hard to implement because your OKRs represent generic priorities.
• Your OKRs feel random because they are not connected to clear Product Strategy Choices.

How to address these problems depends on where you stand in your process and what you should revisit: Should you redefine your North Star Metrics (NSMs) or Product Vision? Clarify your Product Strategy? Reconnect your OKRs to your Strategy? It all depends on the relationship between metrics like NSMs, Product Strategy, and OKRs. I like to call these connections the Product Strategy-Metrics Sandwich.

A Product Strategy-Metrics Sandwich can come in a variety of “flavors”:

Without enough focus on the NSM, you won’t have an inspiring narrative “on top.”

Without enough attention to Product Strategy, you won’t know what you are doing and what you are explicitly not doing. 

Without enough structure from OKRs, you will struggle with implementation when connecting Strategy to tactics. 

The Difference between North Star Metrics (NSMs) and OKRs

In brief, NSMs are persistent goals that influence Product Strategy, whereas OKRs are point-in-time goals that implement that Strategy.

NSMs are persistent goals that influence Product Strategy, whereas OKRs are point-in-time goals that implement that Strategy.

Use these questions to understand if you're looking at a NSM or an OKR:

1. Is there a specific timeline attached to a given figure of this metric? Then it's probably an OKR.
2. Does it require more than one cross-functional product team to significantly influence and move this metric? Then it's probably a NSM.
3. Is it “only” directly linked to your long-term Product Vision or to a more specific strategy choice? If Vision, then it’s a NSM. If initiative and strategy choice, then it’s an OKR.

Let’s walk through each of these elements and look more closely at how they relate to each other.

The Anatomy of a North Star Metric

To ensure OKRs can be loosely aligned with the overarching Product Vision, product teams first need to differentiate which NSMs influence their Product Strategy, before choosing how to implement them through OKRs.

NSMs are widely discussed, but how do you identify them for your specific product? I believe your NSMs shouldn’t be set backwards from a KPI dashboard but develop forwards from your Product Vision. If you have a genuinely user-centered Product Vision, your NSM should almost "automagically" flow from it.

Let’s consider an example from a hypothetical digital fitness company focused on parents:

At the highest level, this is how a North Star Metric could tie in with their users’ experienced value and help quantify their experienced success. Just like the overall vision statement, the NSM can feel fairly fluffy. And, by design, it relies on multiple driving metrics, which represent the value experienced by users or customers through individual product functions. That is why there are also different levels of NSMs, and a company NSM can guide the product-level NSMs.

The Levels of North Star Metrics

Many organizations differentiate Company Vision and Product Vision. Similarly, it makes sense to develop a persistent metric like the NSM for each product area or team.

Here’s how this might look in the example of the aforementioned digital fitness company:

Understanding that Product-level NSMs are true drivers of the company NSM requires a fair amount of work. Tools like KPI trees can be helpful visual aids, but the process requires actual quantitative insights through Product Discovery into which actions lead to which changed behaviors. It would have been easy to slap a business-first metric like “No. of purchased personal trainer engagements” or “Rehabilitation patients registration growth” onto each of the product areas.

But, independent of their level, Product Vision and NSMs serve an inspirational purpose in describing the future: not the future of how your product might look but the value created for and experienced by your audience. The focus on value unites these two, making them act as the qualitative AND quantitative side of this aspirational future. In other words, the North Star Metric is the Quantified Sibling of the Product Vision, which both sit within the Strategic Narrative Pattern as inputs for defining your Product Strategy.

The North Star Metric is the Quantified Sibling of the Product Vision.

The Timelines of NSMs, Strategy, and OKRs

It’s difficult to define an exact timeline, but Vision and NSM are about the (potentially) infinite product development journey, whereas Strategy has a (varying) time horizon. In a recent conversation, Stephanie Leue, Chief Product Officer at Doodle, told me that “finding that balance in your Product Strategy is challenging. I think you need to clearly articulate what's the risk of that bet, what's the evidence behind it, and how big are the risky bets over the next 12 to 18 months.” OKRs, in contrast, typically have a quarterly (sometimes even annual) horizon, to implement Strategy.

So to shape Product Strategy you want to rely on the NSM as a key influence. Or, as Daniel Schmidt has summarized:

“By modeling a strategy that’s independent of time-based goals, you get a lot of the same benefits as OKRs. You clearly articulate the “why?” behind your work.”

And though the word “sequence” can have a bad ring to it in Product Management, it is what differentiates metrics from goals as product teams measure real progress toward meaningful destinations in their never-ending journey toward their Product Vision.

How to Move from Product Strategy to Quarterly OKRs

Your Product Strategy should not just emerge from a 2-hour workshop; it needs messy, deep dive work.  Still, there comes a time where you have to synthesize it for easier communication, whether that’s through the canvas of your choice or concise statements. Depending on the company-/product-/feature-level, you need to consider different levels of granularity. Make sure these are real choices and not just repeating business as usual.

To inform company-level or annual team-level OKRs, you can turn the specific choices into proxy metrics. These aim to answer the question of how you would know that you have “won” (or that your choices were successful).

By design, these proxy metrics are lagging indicators: they move rather slowly, their results can only be detected in hindsight, and they can’t be influenced by one cross-functional product team alone. This is pretty much the opposite of what you want an actionable and useful Key Result to look like.

Turning Lagging Proxies into Leading Indicators

To identify more leading indicators, you need to reverse-engineer the customer journeys from the segments your Product Strategy prioritizes. Ultimately, you’re looking for the common denominators among the „successful“ users. What patterns do they have in common?

Since leading indicators are about trading certainty for responsiveness, consider two criteria in particular: How autonomously can you influence these metrics, and at what pace will you be able to detect changes?

The lagging proxy metric representing success for the Mental Fitness Product area of our example might be useful for an annual OKR Set, but not for the week-over-week prioritization throughout a quarter. Based on the qualitative and quantitative insights available to them, their reverse-engineering of leading indicators might look like this:

The connection between a quarterly OKR and a NSM might not always come in the form of straight lines and clear KPI trees– and that’s ok. As long as the team owning the Product Strategy did the work to ensure their strategy choices are influenced by a NSM and can loosely connect to it, they are headed in the right direction.

Bringing the digital fitness company full circle, here’s what a Product Strategy-Metrics sandwich could look like for the Mental Fitness Product area for the digital fitness company example: