Link Strategy to Execution with KPI Trees

I talk a lot about how teams should focus on aligning development efforts with strategic goals. The reason is simple: a ton of time and effort gets spent on developing features or initiatives that bring little to no value to users, and often, they don't even align with the company's strategic goals. That’s a real problem, and it happens more often than you might think.

Strategic goals, when they're properly put together, define the path to success for your company. They provide focus, clarity, and alignment across different teams. And that, in a nutshell, is what effective cross-functional work is all about.

Today, I want to talk about one of the most powerful frameworks aiming to bridge this gap between strategy and execution: KPI Trees.

What Exactly Are KPI Trees?

KPI trees, in a nutshell, aim to link every opportunity and development to a strategic goal and measure the success of their implementation. Think of it as a roadmap, but one where every single step is clearly connected to your ultimate destination and you have a way to check if you're still on track.

The way of working is really quite simple, and it breaks down your company's big picture into actionable, measurable steps:

1. Your Company's Goal and Vision

Every company starts with a core purpose – a goal and a vision for the problem it aims to solve for a specific type of customer. This is your "North Star." Of course, financial results are often attached to this. Profitability and growth are common ones, and they’re definitely important. But it all starts with that fundamental problem you're trying to solve for your users.

2. Define Your Strategies

To achieve that big vision, you need to define your strategies. These are the specific steps you’re going to take to get there. The trick here is to focus. You’ll typically want to focus on just a few strategic goals at a time. Why? Because if you try to do everything, you end up diluting your efforts, and nothing really gets the attention it deserves. Focusing helps you prioritize and put your energy where it will make the biggest impact.

3. Link Development to Strategy

This is where the rubber meets the road. All the development work you do should serve one of your defined strategies. Now, realistically, some work will always need to go into maintenance – keeping the lights on, fixing bugs, that kind of thing. But the majority of your features or opportunities need to be directly linked to your strategies. This means they are designed to provide clear, measurable business impact. If a feature isn't serving a strategy, you have to ask yourself why you're building it.

4. Attach KPIs to Every Development Item

This is the measurement piece, and it’s critical. Every single development item needs to be attached to one or several Key Performance Indicators (KPIs). These KPIs aren't just arbitrary numbers; they are specifically chosen to measure the success of that particular implementation.

• If your KPIs are achieved: Great! You're on the right track. This tells you your efforts are working, and you can potentially scale or build on that success.

• If your KPIs are not achieved: This is where you learn. You need to figure out whether you're on the right path. Do you need to iterate and improve the development? Or, in the worst case, do you need to stop and remove that development altogether? It's about being data-driven and agile, not just blindly pushing forward.

Why KPI Trees Matter

This framework offers a clear, structured way to ensure that all your development efforts are directly contributing to your company's strategic goals. It helps you avoid wasted effort, keeps your teams aligned, and provides a clear system for measuring impact and making informed decisions.

Ready to Drive Real Change?

So this is a framework that can benefit you if you are helping your teams find alignment between your strategy and execution. If you want a proven system that I’ve used in different companies to align your strategy with your development, with detailed information on how to implement it, check out my Product Operations Playbook.