Your ‘North Star’ metric is the single measurement that best guides your company's long-term performance. It’s the metric that matters the most. A traditional north star metric does three things: bring in revenue, reflect customer value, and measure your progress, but in the world of regeneration, we believe it has a better purpose; to correlate with and realign you to your social/environmental impact – your company’s reason for existence.
Businesses are made up of many moving parts, which means each department, team, and even individual contributors can end up working towards their own metric. This often leads to each team setting and defining its own goals, sometimes leaving internal members working against each other or duplicating efforts.
One of the biggest risks a company faces when attempting to measure performance is ‘KPI overflow’. This is when measuring too much blurs the line, overwhelms, and creates confusion on what areas need to be improved upon and optimised. Startups especially need to be clear on one metric.
Regenerative businesses have a unique opportunity when it comes to setting their North Star metric because they can directly link it to their social or environmental impact. Even though different teams will have their own sub-goals and metrics to focus on, having a north star metric means the entire company will be working toward, and able to connect their goals to, the business’ shared impact goal.
The north star metric is essential for any regenerative business. You can still use secondary metrics to help you track other areas or help you make a point, but be aware if your team isn’t crystal clear on the metric that matters the most–the one that directly correlates with impact and profitability–you can end up risking your entire business.
