Lessons Learned Implementing Metric Trees
How this data leader empowered her team and got operational clarity with metric trees
I recently had an in-depth conversation with a data leader (whom I’ll call Emma) about her experience implementing metric trees at a startup. She’s currently director of data and she runs a small team of analysts and engineers.
I reached out to her after she graciously pledged $8/mo to support this newsletter. I still don’t accept payments by the way but it was surprising to me that I had provided enough value to warrant a subscription. In our first call, Emma mentioned how my post on metric trees motivated her to build her own and the results had been incredible.
Metric trees helped her:
Drastically reduce requests on the data team
Easily prioritize data questions from stakeholders
Increase the company’s operational clarity
Empower the data team to own outcomes
Increase data team’s impact on the business
Shift data team’s role from order takers to internal consultants
Dramatically boost data team’s impact and morale
Not bad for a simple tool, right? The only problem was that we didn’t record that call, so I was very keen on having another call where we dove into the specifics. This post focuses on the Growth Model and Leadership & Influence legs of the triad I introduced last time.
The Interview
Me: Hi Emma, last time we talked you shared your experience with building a metrics tree at your company and how it basically transformed the data culture there. Would you mind sharing your experience?
Emma: Absolutely! It all started when I realized that despite being immersed in data, I was struggling to understand the levers we could pull to improve our business. The data team was bogged down with too many questions and requests most of which seemed ad-hoc. We were acting more like a service function reacting to others' needs. I realized we needed to be more proactive and prescriptive. We couldn't help the business if we didn't help ourselves first by gaining clarity.
Me: So that's when you decided to implement metric trees?
Emma: Yes. I came across a post you made about metric trees and it struck me as a powerful tool to gain visibility into our operations. Given the typical chaos in a startup—everyone chasing shiny new things without a clear sense of priority—we needed a structured approach.
Me: So how did you go about building it?
Emma: I started by identifying our goal metric, which was straightforward—it’s revenue. From there, I broke revenue down into components that directly impact it, like Monthly Transacting Users (MTUs) and Average Revenue Per User (ARPU). I then broke down MTUs by new and returning users because their behaviors impact revenue differently.
Me: That’s interesting. I would have thought that splitting a metric along a dimension like that would make the tree more dense and complicated. Why did you choose to split MTU into new and returning users?
Emma: Historically, we've focused heavily on acquiring new users, like many startups. But we realized that retaining existing users is equally important for sustainable growth. By explicitly highlighting both segments in the tree it ensured that strategies for retention received as much attention as acquisition.
Me: Ah that makes sense. What about other dimensions like user segments or channels?
Emma: I considered adding dimensions like channels directly into the tree, but it quickly became complex. So I limited the levels of the tree to keep it simple—no more than four levels, including the goal metric. We only use those dimensions when doing something like root cause analysis where you would drill down into specific metrics. This way, the tree remained relatively high level rather than an exhaustive map.
Me: Did you involve other departments in building the tree?
Emma: Not at first. We built the initial version for ourselves to avoid getting bogged down by too many opinions. Were obviously open to feedback but it’s much more impactful from the power dynamics point of view when you present something first.
Me: That’s pretty cool. Now if I recall correctly, you then assigned different portions of the tree to each member of your team to own and be responsible for right?
Emma: That’s right! Each color-coded section of the tree represented a team member's area of ownership. I told each one that they alone were responsible for driving those metrics. This helped them become experts in their areas giving them much needed agency and a crystal clear way to assess impact. I think that alone had a huge impact on improving the team’s morale.
Me: Once the tree was built, how did you introduce it to the rest of the company? The recommended advice is to start at the top with executive leadership and let them impose policies top down.
Emma: We did something different. I built the tree first for my own personal use because I wanted to get more clarity on what we could do to make an impact on the business with data. Then I shared it with my team and assigned specific sections to each individual. As they started to work with stakeholders, they started evangelizing the tree throughout the organization. Surprisingly, the response was very positive. Stakeholders were quite happy to have a clear direction. It also positioned the data team as leaders rather than just service providers, which elevated our role within the company.
Me: Now that’s something I love to see! Can you share more specifics on what happened?
Emma: For instance, if someone proposed improving the KYC (Know Your Customer) pass rates, we'd assess how that would affect MTU and, subsequently, revenue. By quantifying the expected impact, we could prioritize projects that offered the most significant return on effort. The tree became a central point for prioritizing projects and allocating resources. We then started using the RICE framework—Reach, Impact, Confidence, Effort—to evaluate initiatives, always tying them back to the metrics on the tree.
Me: Oh so you combined the metrics tree with another framework? How did that change things?
Emma: It improved collaboration. Other teams began to see us as strategic partners. We weren't just delivering reports; we were providing insights that directly influenced business decisions. This shift also helped in aligning objectives across departments, ensuring everyone was working towards a common goal.
Me: Did the metric tree help in finding any opportunities you hadn't seen before?
Emma: Yes. By visualizing how different metrics connected to revenue, we identified areas where small improvements could have substantial impact. Specifically it helped us spot bottlenecks in user conversion paths and remove or improve them.
Me: How did you handle the balance between being prescriptive and collaborative?
Emma: We trusted our knowledge of the data and the business. While we were open to feedback, we also recognized that as data professionals, we had a unique, holistic view so we could actually provide input while collaborating on a project. Once you have the tree, it’s very easy to see how a project or an initiative directly impacts the goal.
Me: Anything else you’d like to add?
Emma: Don't be afraid to take ownership. Build the initial tree internally if you have to. You already know most of the business needs. Make sure you understand the overall objective of the company—the goal metric—like Revenue, break that down into its components and keep the tree as simple as possible. I think in many cases the other stakeholders will welcome the clarity and focus. This way we as data professionals can finally show our value to the business and avoid those pesky “what’s the ROI of the data team” questions.
Me: Thank you for sharing your insights, Emma. This has been incredibly enlightening.
Emma: My pleasure! I'm glad to share our journey and hope it helps others navigate their own.
Final Thoughts
The journey of implementing metric trees is not just about creating a visual representation of metrics; it's about transforming how a team operates within an organization. It's about empowerment, clarity, and strategic alignment. Emma's experience underscores the importance of being proactive, maintaining focus, and leading with confidence.
Whether you're a data leader or part of a team seeking to make a substantial impact, these lessons offer valuable guidance on leveraging metric trees to drive success.
Until next time.